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Lesson 2 - Economics As Social Science

The document provides an overview of economics as a subject. It defines economics as the study of how individuals and societies make decisions about using scarce resources to fulfill wants and needs. It discusses key concepts in economics like scarcity, opportunity cost, economic resources, and different economic systems. The document also summarizes different definitions of economics provided by prominent economists like Adam Smith, Alfred Marshall, Lionel Robbins, and Paul Samuelson. It describes the branches of economics as microeconomics and macroeconomics.

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Charles Corporal Reyes
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179 views27 pages

Lesson 2 - Economics As Social Science

The document provides an overview of economics as a subject. It defines economics as the study of how individuals and societies make decisions about using scarce resources to fulfill wants and needs. It discusses key concepts in economics like scarcity, opportunity cost, economic resources, and different economic systems. The document also summarizes different definitions of economics provided by prominent economists like Adam Smith, Alfred Marshall, Lionel Robbins, and Paul Samuelson. It describes the branches of economics as microeconomics and macroeconomics.

Uploaded by

Charles Corporal Reyes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 27

ECONOMICS

Prepared by:
Charles darell c. reyes, lpt
What is economics?

➜ Economics is derived
Economics – the study of
from two Greek words
how individuals and
➜ Oikos- a house
societies make decisions
➜ Nemein- to manage
about ways to use scarce
➜ Means “managing an
resources to fulfill wants
household”
and needs.
Economics as defined by authors of Economics books

Paul Samuelson (Economics)


➜ “the study of how people and society end up
choosing, with or without use of money, to
employ scarce resources that could have
alternative uses to produce various
commodities among various persons and
groups in society.”
Roger Le Roy Miller
(Economics, Today and Tomorrow)
➜ “Economics concerns situations in which
choices must be made about how to use
limited resources, when to use them and for
what purposes. Resources can be defined as
the things people use to make the
commodities they want.”
Hall and Loeberman (Macroeconomics:
Principles and Applications)

➜ “The study of choice under the condition of


scarcity”
Bernardo Villegas
(Guide to Economics for Filipinos)

➜ “A social science that studies and seeks to


allocate scarce human and non-human
resources among alternatives in order to
satisfy unlimited human wants and desires.”
Gerardo Sicat (Economics)

➜ “a scientific study which deals with how


individuals and society make choices.”
Economics as social science
➜ is a different science from biology and
chemistry as these are physical sciences.
Economics is a social science because it
studies human behavior just like psychology
and sociology.
Answer the following using
three (3) sentences and above.

1. As an individual, what do you think


is the essence of studying economics?
2. How do you apply economics in your
household?
Emphasis Significant
Wealth Adam Smith
Welfare Alfred Marshall
Scarcity Lionel Robbins
Growth Paul Samuelson
Adam smith (1723 - 1790), Father of
Economics
➜ Book “An Inquiry into Nature and Causes of
Wealth of Nations” (1776)
➜ defined economics as the practical science of
production and distribution of wealth.
Alfred Marshall (1842 - 1924) wrote
a book “Principles of Economics”
(1890)
➜ Welfare definition
➜ defined “Political Economy” or Economics is a study of
mankind in the ordinary business of life;
➜ it examines that part of individual and social action
which is most closely connected with the attainment and
with the use of the material requisites of well being”.
13

Lionel Robbins
(Scarcity definition)
➜ book “An Essay on the Nature and Significance of
Economic Science” in 1932.
➜ According to him, “economics is a science which
studies human behaviour as a relationship between
ends and scarce means which have alternative uses”
➜ Ends – human wants
➜ Means – resources with which wants are fulfilled
Paul Samuelson
(Growth definition)
➜ defined economics as “the study of how men and
society choose, with or without the use of money, to
employ scarce productive resources which could have
alternative uses, to produce various commodities over
time, and distribute them for consumption, now and in
the future among various people and groups of society”
“
Commerce is a game of skill
which everyone cannot play
and few can play well.
scarcity
is a condition where there are insufficient resources to satisfy all needs and
wants of a population. Scarcity may be relative or absolute.

relative scarcity
is when a good is scarce compared to its demand.
absolute scarcity
Is when supply is limited.
choice and decision-making
Because of the presence of scarcity, there is a need for man to make decisions
in choosing how to maximize the use of the scarce resources to satisfy as
many as possible.
Opportunity cost
it refers to the value of the best forgone alternative/s.
For example, when land is devoted exclusively to the cultivation of rice, we
give an output of bananas or corn that we could have planted on that land
area.
Economic resources
Also known as factors of production, are the resources used to
produce goods and services.

1. Land – soil and natural resources that are found in nature and
are not man-made.
2. Labor – physical and human effort exerted in production.
3. Capital – man-made resources used in the production of goods
which include machineries and equipment.
branches of economics
There are two branches of economics, these are the
macroeconomics and the microeconomics.

MACROECONOMICS – is a division of economics that is


concerned with the overall performance of the entire economy.
he big picture: growth, employment, etc.– Choices made by large
groups (like countries).
MICROECONOMICS – is concerned with the behavior of individual
entities such as consumer, the producer and the resource owner.
How do individuals make economic decisions.
Basic economic problems of society
All societies are faced with basic questions in the economy that
have to be answered in order to cope with constraints and
limitations. These are:

1. What to produce and how much


2. How to produce
3. For whom to produce
ECONOMIC SYSTEMS
The economic system means through which society determines
the answers to the basic economic problems mentioned. A
country may be under any of the following types or even a
combination of three economic system.

1. Traditional Economy
2. Command Economy
3. Market Economy
23

traditional economy
Decisions are based on traditions and practices upheld over the
years and passed on from generation to generation. Methods are
stagnant and therefore not progressive.
command economy
This is the authoritative system wherein decision-making is
centralized in the government or a planning committee.
market economy
The most democratic form of economic system.
Summative questions
➜ Why economics is important?
➜ Why do we need to study economics?
27

A picture is
worth a thousand
words

Thank you for listening!

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