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Questions and Answers
Which economic area focuses on small-scale interactions and households as firms interacting in the market for consumption of goods?
Which economic area focuses on small-scale interactions and households as firms interacting in the market for consumption of goods?
What does positive economics focus on?
What does positive economics focus on?
In which type of economic system does individual or consumer behavior drive production?
In which type of economic system does individual or consumer behavior drive production?
Which category of economics is concerned with the study of how things ought to be?
Which category of economics is concerned with the study of how things ought to be?
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What is the primary reason for the existence of economics, according to the text?
What is the primary reason for the existence of economics, according to the text?
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Which type of economics focuses on the relationship between positive and normative economics?
Which type of economics focuses on the relationship between positive and normative economics?
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What is the main cause of the economic problem of unemployment in the Philippines?
What is the main cause of the economic problem of unemployment in the Philippines?
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Which of the following is NOT a characteristic of perfect competition in a market structure?
Which of the following is NOT a characteristic of perfect competition in a market structure?
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Which of the following is the best way to address the problem of poor infrastructure in the Philippines?
Which of the following is the best way to address the problem of poor infrastructure in the Philippines?
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What is the primary factor that determines the quantity demanded of a product or service?
What is the primary factor that determines the quantity demanded of a product or service?
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Which of the following is the most effective way to address the problem of heavy dependence on remittances in the Philippines?
Which of the following is the most effective way to address the problem of heavy dependence on remittances in the Philippines?
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Which of the following is a key characteristic of the law of supply?
Which of the following is a key characteristic of the law of supply?
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Study Notes
Economics Definition and Scope
- Economics is a social science that analyzes the production, distribution, and consumption of goods and services.
- The Greek word for economics is Oikonomia.
- Adam Smith is considered the Father of Economics.
Types of Economics
- 5 areas of economics:
- Microeconomics: small-scale interaction, referring to households and firms interacting in the market for consumption of goods.
- Macroeconomics: examines the economy as a whole.
- International economics: analyzes the flow of goods and services between nations.
- Theory: models derived and applied to current problems.
- History: focuses on economic theory.
Categories of Economics
- 3 basic categories of economics:
- Positive economics: studies criteria of what is (facts).
- Normative economics: studies how things ought to be (opinions).
- Applied economics: studies the relationship between positive and normative economics.
Economic System
- Refers to the way decisions about producing goods and services are made within a given society and the rules that govern distributions.
- 3 major types of economic systems:
- Market economy: individual or consumer behavior drives production.
- Command economy (planned economy): government drives production.
- Mixed economy: combines elements of market and command economies.
Economic Problems
- 3 basic economic problems:
- What to produce: allocation of resources.
- How to produce: selection of appropriate production techniques.
- For whom to produce: distribution of economic products to society.
Economic Problems in the Philippines
- 4 major economic problems in the Philippines:
- Unemployment: situation where someone of working age is not able to get a job but would like to be fully employed.
- Poverty: closely linked to unemployment.
- Poor infrastructure: poor essential systems and facilities.
- Heavy dependence on remittances: the country heavily relies on money sent from abroad.
Applied Economics
- Applies economic theories to solve economic problems.
- 4 approaches to applied economics:
- Nationalism: building a sense of patriotism and loyalty.
- Tracing history: understanding the background of economic problems.
- Following other footsteps: learning from other countries' experiences.
- Fiscal policy lags: addressing delays in recognizing and solving economic problems.
Supply and Demand
- Supply: total quantity of product or services that the market can offer.
- Quantity supplied: amount of product or services suppliers are willing to supply at a given price.
- Demand: quantity of a good that is desired by buyers.
- Quantity demanded: specific amount of a product buyers are willing to buy at a given price.
- Law of demand: higher price, lower quantity demanded; lower price, higher quantity demanded.
- Law of supply: higher price, higher quantity supplied; lower price, lower quantity supplied.
- Equilibrium: when supply and demand are equal.
- Disequilibrium: when internal and external forces prevent market equilibrium from being reached.
Market Equilibrium
- Excess supply: when price is set too high, excess supply is created, and allocative resources are wasted.
- Excess demand: when price is set below the equilibrium point, excess demand is created.
- Movement: change in both price and quantity demanded.
- Shifts: changes in quantity demanded and supplied, even though price remains the same.
Market Structure
- Refers to the nature and degree of competition in the market for goods and services.
- Forms of market structure:
- Perfect competition: many buyers and sellers, homogenous products, and free entry and exit.
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Description
Learn about the fundamental concepts in economics, including scarcity, microeconomics, macroeconomics, and international economics. Explore how economics analyzes the production, consumption, and distribution of goods and services.
