APPLIED ECONOMICS WEEK 1 LESSON.pptx

INTRODUCTION TO APPLIED ECONOMICS RUBY JANE V. TAUNAN REARRANG ED ME It is a social science that deals with how people From organize themselves the Greek words OIKOS meaning to and NOMOS household meaning shar...

INTRODUCTION TO APPLIED ECONOMICS RUBY JANE V. TAUNAN REARRANG ED ME It is a social science that deals with how people From organize themselves the Greek words OIKOS meaning to and NOMOS household meaning share scarcemanagement. resources in order to = household produce goods managementand services that satisfy the infinite and multiplying ECONOMICS wants and needs of man. COEONSICM  From the Greek words OIKOS meaning This means that there is and NOMOS household management. = household meaning shortage management of supply or has limited resources. SCARCITY YITSACRC It is a branch of economics From the Greek words OIKOS meaning that studies the behavior and NOMOS household management. = household meaning and performance of an management economy as a whole. ACRMOOCEONSCI MACROECONOMIC MS It is a branch of economics that studies in decision From the Greek words OIKOS meaning and NOMOS household meaning making and allocation of management. = household management resources, the individuals and industry’s behavior. OICRMOCNEOCISM MICROECONOMIC  From the Greek words OIKOS meaning A type of good which and NOMOS household management. = household meaning satisfy the basic needs of management man. LAINTEESS OODGS ESSENTIAL GOODS  LEARNING OBJECTIVES From the Greek words OIKOS meaning and NOMOS household meaning management. = household At the end of the lesson, you are expected to: management a. define the basic concepts of Economics as a Social Science b. explain Economics as a Social Science c. reflect on the importance of economics in daily life as to its nature and scope  "Sweet Start Activity: Grab and and NOMOS meaning management. Enjoy!"ent In front of you are candies that you could get and eat. Come on, everybody is invited to get candies. Do not be shy.   Analyses of the and NOMOS meaning activity management. What happened when you were invited to get candies? State your observation.  NATURE AND SCOPE OF ECONOMICS  ECONOMICS AS DEFINED From the Greek words OIKOS meaning and NOMOS household meaning management. = household management ECONOMIC S The wise production and use of wealth to meet demands or needs of the people.  Economics as defined by authors of Economics From the Greek words OIKOS meaning and NOMOS household meaning books management.  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 Roger Leand groups Roy in (Economics, Miller society.” 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 Hall and Loeberman they want.” (Macroeconomics: Principles and Applications) “The study of choice under the condition of scarcity”  Economics as defined by authors of Economics From the Greek words OIKOS meaning and NOMOS household meaning books management.  Bernardo Villegas (Guide to Economics for “A social science that studies and seeks to allocate scarce human Filipinos) 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,”  Common Words amongand NOMOSDefinitions From the Greek words OIKOS meaning household meaning management. Scarcity- a situation wherein the amount of something available is insufficient to satisfy the desire for it. Resources-The labor, capital, land and natural resources and entrepreneurship that are used to produce goods and services Unlimited – without limits, infinite Wants– desires Scarcity and the Study of Economics From the Greek words OIKOS meaning and NOMOS household meaning How does ECONOMICS management. = household relate to SCARCITY? management Scarcity is the reason why people have to practice economics. Economics, as a study, is the social science that involves the use of scarce resources to satisfy unlimited wants.  ChoiceFrom and Opportunity the Greek words OIKOS meaning Cost household and NOMOS meaning management. = household What is OPPORTUNITY management COST?  It refers to the value of the best foregone alternative. It holds true for individuals, businesses, and even a society.  Economics From theas Greeka Social words Science OIKOS meaning and NOMOShousehold meaning management. = household Why is ECONOMICS considered management as a SOCIAL SCIENCE?  It is considered a social science in that it studies human behavior. It studies how individuals make choices in allocating scarce resources to satisfy their unlimited wants.  SCOPE OF ECONOMICS From the Greek words OIKOS meaning ECONOMIC and NOMOS household meaning S management. = household management MICROECONOMIC MACROECONOMIC AGGREGAT S Specific S General ES Deals with Deals with economic economic problem Busine Governme behaviour of as a whole such ss nt individual as aggregate consume household, firms prices, production rs firms and industries. and income. landown Microeconomics vs. Household ers Macroeconomics  Microeconomics vs. Macroeconomics MACROECONOMICS MICROECONOMICS Gross National Price of rice Level Productof Number of workers in a Employment National Income Income of a certain individual certain firm General Level of Expenditures of certain Prices business “Employment and “Price Theory” Income Analysis”  Types of Economics 1.Household Economics – most common use of economics is for the family. At this level, anyone who knows the economic principles will be able to improve the 2.running of the Business household. Economics – when a person or group of persons begins to work, they come under the system of business economics in their workplace. In this type, you deal with 3. the rent, National salary, profits Economics and others. – Economic factors of problems affecting the whole nation. Deals with the management of income, expenditures, wealth or resources of a nation. 4. International Economics – The highest stage of economic activities involving the business of one country with other countries like trade, tourism, exchange rates. From the Greek words OIKOS meaning and NOMOS household meaning management. PRODUCTIO = household N management PUBLIC FINANCE Divisions DISTRIBUTIO Of N Economics CONSUMPTIO EXCHANGE N  Divisions of Economics 1. PRODUCTION - refers to the process of producing or creating goods needed by the households to satisfy their needs. Factors of inputs production Goods and - outputs services- Factors of production  Goods vs. Services GOODS SERVICES What is GOODS? What is a SERVICE? -it is something that -it is something done for can be used or someone else. Sometimes consumed. people are paid for their service, sometimes they are not.  Producer vs. Consumer PRODUCER - a person or business that makes goods or provides services. CONSUMER - a person or business that buys or uses goods or services.  Divisions of Economics 2. DISTRIBUTION - refers to the marketing of goods and services to different economic outlets. 3. EXCHANGE - refers to the process of transferring goods and services to a person in return for something present medium of exchange - money 4. CONSUMPTION - refers to the proper utilization of economic goods. However, goods and services could not be utilized unless you pay for it. Hence, consumption could also be spending money for - pertains 5. PUBLIC FINANCEgoods to the activities of the government and services. regarding taxation, borrowings and expenditures. It deals with efficient use and fair distribution of public resources. Economic Resources Factors of production or inputs  Economic Resources Factors of production or 1. LAND - is considered inputs an economic resource because it has a price attached to it. 2. LABOR - refers to all human efforts, be it mental or physical, that help to produce satisfying - canand 3. CAPITALgoods represent the monetary resources used to services. purchase natural resources. Ex. Companies use capital to buy land and other - represents the major physical assets goods. individuals and companies use when producing goods and services. Ex. Building, vehicle, equipment  Economic Resources Factors of production or inputs 4. ENTREPRENEURS - The organizer and coordinator of other factors of production such as land, labor, and capital. 2. FOREIGN EXCHANGE - refers to the dollar and dollar reserves that the economy has. International - Medium DOLLAR Tangible Macroeconomi Scarcity cs Household Capital Consumption Public Finance Microeconom Consumers ics Labor 1. From the Greek word mikros, meaning “small”. 2. A physical object or product that can be 3. The family is most popular use of economics. 4. Are individuals or companies purchasing goods or services. 5. Physical human involvement in production. 6. Man-made commodities that are used to manufacture products and services. 7. Is concerned with government spending and revenue. 8. It is the use of products or services. 9. Insufficient amount of what is accessible to fulfill the demand for it. 10. Deals with the problem of the economy as a whole.