Applied Economics Mid Term 2 Review (PDF)

APPLIED ECONOMICS MID TERM 2 REVIEWER ===================================== I. Nature and Scope of Economics A. Definition of Economics B. Types of Resources C. Most Important Aspects of Economics D. Economic Decisions E. Economic Investigation II. Research in Applie...

APPLIED ECONOMICS MID TERM 2 REVIEWER ===================================== I. Nature and Scope of Economics A. Definition of Economics B. Types of Resources C. Most Important Aspects of Economics D. Economic Decisions E. Economic Investigation II. Research in Applied Economics F. Characteristics of a Research G. Classifications of Research H. Variables I. Research Designs J. Guides in Writing Research K. Elements of Research CHAPTER I: NATURE AND SCOPE OF ECONOMICS ======================================== - It is the study of how individuals and nations make choices about how to use scarce resources to fill their needs and wants. - RESOURCE - Is anything that people can use to make or obtain what they need or want. LESSON I: DEFINITION OF ECONOMICS ================================= - A social science concerned with using scarce resources to obtain the maximum satisfaction of the unlimited material wants of society. SAMUELSON AND NORDHAUS ====================== - The study of how societies use scarce resources to produce valuable commodities and distribute them among different people. COLLIN ====== - The study of production, distribution, selling, and use of goods and services. PARKIN AND BADE =============== - Study of how people use their limited resources to try to satisfy unlimited wants. LESSON II: TYPES OF RESOURCES ============================= A. Land - Refers to natural resources, not just to surface land. NATURAL RESOURCES ================= - Are all the things found in nature, in water and earth. Such as fish, animals, forests, and minerals as well as land and water. B. LABOR ===== - Refers to the work that people do. It includes all kinds of jobs; bus driver, doctor, teacher, business executive and so on. Anyone who works is a part of the labor resource. C. CAPITAL ======= - Is all the property like machines, buildings, and tools that people use to make other goods and services. PRODUCTIVITY ============ - Is the ability to produce greater quantities of goods and services in better and fastest ways. D. ENTREPRENEURSHIP ================ - Refers to individuals' ability to start new businesses, to introduce new products and techniques, and to improve management techniques in existing businesses. FACTORS OF PRODUCTION ===================== - Things that people used to produce goods and services. - GOODS - Are the things that people buy. - SERVICES - Are the activities done for others for a fee. E. TECHNOLOGY ========== - The use of science to develop new products and new methods for producing and distributing goods and services. - BENEFITS OF MODERN TECHNOLOGY AS A RESOURCE =========================================== i. Leisure Time ii. Highly Skilled Workers iii. Efficient Use of Resources iv. Lower Prices v. High Quality Goods and Services LESSON III: MOST IMPORTANT ASPECTS OF ECONOMICS =============================================== 1. SCARCE RESOURCES - Resources are just not enough to satisfy people since wants are unlimited and resources are limited. - WANTS - Everything other than the basic needs. - NEEDS - Basic things needed by man to survive. - ECONOMIC CHOICE - The - SCARCITY - Imbalance between our desires and the means of satisfying those desires since most things that people want are available only in limited supply. 2. UNLIMITED WANTS =============== - Wants also refer to "a person's desires or preferences for specific ways of satisfying a basic need." - Thus, to satisfy an unsatisfied need, a person wants a particular product or services. 3. MAXIMUM SATISFACTION ==================== - How these resources (limited as they are) will be used to satisfy wants to the highest degree possible. OPPORTUNITY COST. LESSON IV: ECONOMIC DECISIONS ECONOMIC GOOD =========================================== - Is anything, either physical commodity or a service, yields utility and which could command a price if bought or sold in the market. ECONOMIC PROBLEM ================ - Since resources are not sufficient to satisfy the unlimited wants of people, decisions must be made with the said constraints in mind. - THE FUNDAMENTAL ECONOMIC PROBLEM ================================ - What goods and services must be produced and in what quantities? - How shall these goods and services be produced? - For whom shall these goods and services be produced? ECONOMIC ACTIVITIES =================== - Any human action related to production, distribution, exchange and consumptions of goods and services. - BASIC ECONOMIC ACTIVITIES ========================= - Production - Consumption - Capital Formation - LEVELS OF ECONOMIC ACTIVITIES ============================= - PRIMARY - Raw Materials, Natural Resources - SECONDARY ========= - Manufacturing - TERTIARY ======== - Distribution - QUATERNARY ========== - Capital and Profit Exchange - TYPES OF ECONOMIC ACTIVITIES ============================ - PROFESSION - An occupation wherein a person/individual provides a "specialized service" with a professional qualification and knowledge expertise. - EMPLOYMENT ========== - An occupation wherein a person/individual provides a "service through physical or mental skills" for a compensation, wage or salary. - BUSINESS ======== - Production and distribution and selling of goods and services to earn profit. ECONOMIC SYSTEMS ================ - The distribution of goods and services will depend partly on the availability of resources, the laws, customs and traditions prevalent in a given society. LESSON V: ECONOMIC INVESTIGATION ECONOMIC INVESTIGATION ======================================================= - Refers to a systematic inquiry into economic - It typically involves "collecting and analyzing data to understand various aspects of the economy", such as production, distribution, consumption, and the behavior of different economic agents (like consumers and firms). - INVESTIGATIONS ============== - Can be both qualitative or quantitative using various methods like surveys, experiments, case studies, or statistical analysis.