economics in a nutshell.pdf

property of max toribio economics but simple 👍 plato - division of labor aristotle - private ownership lesson 1: welcome to mercantilist - owning and controllli...

property of max toribio economics but simple 👍 plato - division of labor aristotle - private ownership lesson 1: welcome to mercantilist - owning and controllling of resources f. quesnay (quenaysian) - importance and wise use of economics resources tableu economique - circular flow of economy (goods and concepts for decision making services) individual choice - individual making decisions to meet their needs due to limited resources social choice (kenneth arrow) - government making always remember!!1 decisions to meet the needs of society the wants and needs of people are endless economic choice - decisions related to wise use of limited BUT the things that satisfy the wants and needs of resources people are endless for a person to meet his needs and wants with limited resources, he need to make wise decisions but what IS economics?? BUT making unwise decisions will lead to scarcity according to: so dont cram ur assingments or youll hvae a scarcity of PPT - wise use of limited resources to meet endless grades!!!1 needs and wants > satisfaction :) helps us think carefully abt how we handle things Mankiw - planning how to divide limited resources to meet economics can be considered as: many needs and wants social science - studies human behavior and interactions Gerardo Sicat - study of how a person/society makes with the environment decisions political science - studies how laws and government Paul Samuelson - study of how to use limited resources to decisions affect production and trade and how economic make things for people for the present and onwards theories and methods affect economic systems (e.g. Fajardo - study that deals with how we consume, share, capitalism) and create resources/goods. explains abt the needs of political economy - looks at how public policies ppl to satisfy their needs are made Villegas B - literally the same thing fajardo said important concepts of economics economic perspective trade-off - sacrificing one thing in exchange for another means looking at things based on money (e.g how we make opportunity cost - the value of the thing that was or use resources, and also wealth creation) sacrificed the basic elements of economic perspective are: incentives - additional benefit gained from a thing (e.g. scarcity - insufficiency of resources to meet endless discounts, free item) needs and wants marginal thinking - analyzing the cost and benefit of a supply - amount of something thats available decision demand - amount of that something that people want to efficiency - using minimum effort/wise use of limited buy resources to meet needs and wants equilibrium - when supply = demand sustainability - using resources in a way so that future generations can still meet their needs no free lunch - everything costs something (e.g. good sambayanan at sambahayan grades costs time put into studying) household (sambahayan) - decisions focused on ability to sunk cost - money spent that can’t be recovered (e.g. meet endless needs and wants non-refundable items) should not affect later decisions society (sambayanan) - decisions focused on what, how, for whom, and how much goods to produce equality - everyone benefits from the same support, same treatment spread of economic thought equity - everyone gets the supports they need, same oikonomos - management of houeshold (oiko = outcome management, nomos = household) justice - everyone benefits by removing the cause of xenophon (oicnominus) - good management and leadership inequity property of max toribio john meynard keyness yes ap turned into esp general theory of employment, interest, and money – free markets does not ensure full employment and stable positive vs normative economics prices, so the government needs to step in to stabilize positive economics - explains economic events the economy normative economics - analyzes economic events based on animal spirit - the psychological and emotional factors what should be done, where decision-making is involved that affect decision-making which can lead to random changes in investments and stuff scientific study (yes ap turned into rs karl marx as well) this dude made communism (ideology abt a classless 1. presenting the problem society with collective ownership) 2. preparing data communist manifesto and das kapital - capitalism 👎 and 3. developing an inference it will die naturally 4. actual verification/testing the historical materialism vs. the dialectical materialism - 5. giving a conclusion his analysis on capitalism. i think. maybe. honestly idk the 6. applying and developing a theory ppt is confusing "to lay bare the economic law of motion of modern society” - to explain how economy works in today’s world divisions of economics microeconomics - looks at the decisions of each individual relationship of economics and other unit: household, business, and industry. macroeconomics - looks at the overall economics of a stuides country (e.g. national production, general price levels, too lazy just look at the ppt national income) economists yapping abt stuff lesson 2: scarcity and adam smith shortage this dude is the father of modern economics (kakapusan at kakulangan) free market - a system where people’s self-interest helps themselves and society (called the invisible hand) so whats scarcity? WITHOUT any government stuff economics focuses on decision making in response to smith believed that a country’s wealth came from the scarcity products it creates, and to make the country as wealthy unlimited needs and wants + limited resources > as possible, it should be able to produce freely without SCARCITY > choices in response any restrictions. we dont have enough resources to meet endless needs and david ricardo wants, thats why it is believed that all economies law of diminishing marginal return - after reaching an experience scarcity optimal level of production, adding more resources/factors will lead to smaller increases in output scarcity can happen because of: comparative advantage - an economy’s ability to produce -wasteful use of resources stuff at a lower opportunity cost -non–renewability of some resources -never ending human needs thomas robert malthus the malthusian theory of population - population grows types of scarcity according to… exponentially (constant acceleration) but food supply the situation grows arithmetically (constant rate). population and food physical situation - refers to where resources are supply balance using preventive measures (e.g. birth insufficient to meet endless needs and wants control and positive checks) property of max toribio mental situation - refers to a persons unwillingness to meet a need even if its possible to lesson 3: needs and wants (pangangailangan at kagustuhan) the solution theyre self-explanatory absolute scarcity - when nature and humans cant address needs - things that are very important for people to live, the cause of scarcity we’ll prob die without them relative scarcity - when resources are insufficient to wants - things that people can live without meet human needs needs + wants = satisfaction then whats a shortage TEMPORARY insufficiency of resources but can still maslows hierarchy of needs meet needs and wants abraham harold maslow made this thing because yeah scarcity is PERMANENT, shortage is TEMPORARY so for the rest of this section pretend that its a triangle where were going up the triangle other important things physiological needs - includes biological needs like food malthus made a theory - (see theory of population) if and water. without them wed be ill or weak and things food production is slow and cant keep up with the rapidly safety needs - safety and security of oneself, family, growing population, there will be a scarcity of food property, health, etc mankiw said that - in a community with limited resources, social needs - we need to be in different families and always consider the opportunity cost. careful planning and groups. we would be depressed without people to socialize studying is needed in every decision so more benefits are with gained esteem - need to achieve respect for oneself and others. Production Possibility Frontier (PPF) - sets the highest people want to contribute to society and be recognized. opportunity cost that can be sacrificed no self-esteem = no self-confidence self-actualization - the ability of someone to reach their full potential. as the highest level in the pyramid, the other four needs must be met for self-actualization to be achieved maslow says that as people continue to meet their basic needs, they seek higher needs according to the hierarchy the desire for a higher level is a growth force the desire for a lower level is a regressive force factors affecting needs (+examples) age - when ur young you can eat whatever tastes good, but when youre old you have to choose whats healthy for you level of education - a highly educated person prob is more critical abt his needs and wants social status - a highly-positioned person might want a car to make him more productive at work preference - isnt a “preference” and a “want” like the same thing property of max toribio lesson 4-1: allocation what do we produce? how much will we produce? how will we produce it? for whom do we produce? (lesson 4a: alokasyon) what is the what is the what? lesson 4b: traditional economy determining the value of resources to meet needs and economic system based on customs, beliefs, and wants traditions (or well, culture) this is how people respond to scarcity traditions determine occupation and not much new tech customs/habits of the area hold the power developing countries use traditional economies the t r i a n g l e of s o c i e t y before: pros tiny upper class ^ barely any conflict between people because the culture middle class ^ decides distribution of resources majority working and lower classes ^ everyone knows their contribution because reason stated above now: more sustainable than tech-based economy: these econs upper ^ are smol so they arent that destructive to the upper middle ^ environment + they cant produce beyond their needs middle middle ^ lower middle ^ cons working class = affected by nature and weather like low harvest, limiting upper lower class v population growth poverty class v market and command econs use up the natural resources trad-econs need to survive, making trad-econs vulnerable filipino families categorized by income to other economic systems per year (as of 2013) lesson 4c: market economy economic system where production is based on supply and upper class: 703k pesos (0.1%, 21.7k families) demand middle class: 57k (25.2%, 4.7M) -supply include natural resources, capital, and labor lower class: 12k (74.3%, 14M) -demand includes purchases, businesses, and the income poor: 11k (12.6%, 2.5M) government food poor (7.9%, 1.5M) production takes place in the free market and each person acts according to his self-interest lesson 4-2: economic free market (again): economic market/system where prices are based on competition among private businesses systems and no government involved (lesson 4b-4e: traditional, market, command, -where people can make the deals they want to make with the only interference being demand and supply and mixed economy) ?system economic a is what the six characteristics of a markecon a way to organize method of production, ownership, private property getting resources, and management of economic stuff most goods and services are privately-owned there are different types of economic systems: the owners can make contracts to buy, sell, or lease their traditional, market, and command, and mixed is what the property lessons gonna focus on their assets let them profit from ownership the difference between these systems is based on basic economic questions: who will make the decisions? how will you make the decisions? who will benefit? property of max toribio freedom of choice owners are free to produce, sell, and purchase with the laissez-faire economics restrictions of the price that they are willing to buy/sell a theory that doesnt allow the government doing economy and the amt of capital that they have stuff. the economy is strongest when all the government does is protect people’s rights motive of self-interest laissez-faire is french for “let do”, as in “let the market in an auction, people try to buy with the best price. even do its own thing” if its kinda selfish, it helps in: -setting prices: it shows (what people think is) the worth free enterprise of something letting businesses do their stuff freely and having the -supply and demand: helps show the supply and demand at government step in only when needed any given moment lesson 4e: command economy competition were doing 4e before 4d because 4d needs the force of competitive pressure keeps prices low ensures that society provides products most efficiently knowledge of 4e the price of an item will increase as soon as demand -government is in control and has complete power over increases everything (as in everything, not even supply and demand when companies see that they can profit from a specific can stop it) product, they start making more of it. the extra supply lowers prices, so only the best competitors remain. characteristics of a command economy the competitive pressure applies to workers and -government makes a central economic plan consumers too -government allocates all resources according to the plan -workers compete for the highest-paying jobs (tries to use stuff most efficiently) -the plan sets the properties for production of all goods system of markets and prices and services (e.g. quotas, price controls) with the goal of in a market economy, buying and selling work best when supplying enough products to meet the needs of everyone everyone can see the same information about prices and in the country products -government owns monopoly businesses (important prices go up or down based on supply and demand industries for the economy) there are five factors of demand… and the ppt doesnt -govenrment creates laws, rules, and instructions to say anything about it. great. enforce the plan limited government pros the only role of the government is to make sure that the can quickly take action to gather resources and start big markets are working projects can create big industries economic principles no delays/disruptions (e.g. lawsuits, environmental impact statements) price system has complete control and can transform societies to fit a part of any economic system that uses prices expressed with its goals in any form of money for valuation, distribution of products, and factors of production prices are left to kinda go with the flow and is cons determined by supply and demand focus on big projects can ignore other important needs often develops a black market (selling what government economic decentralization doesnt produce) they dont measure demand so rationing exists can be done through making public stuff private, or discourages innovation an d only rewards leaders for through: following orders deregulation: removing restrictions on businesses struggles to know what people need competing with government services. (e.g. school, garbage collection, postal services) property of max toribio lesson 4d: mixed economy /main equality among equality among i have a mark idea members of members of i have comecon society and society promoting uhH classless society commarkecon wealth is according to according to tradicon distribute needs contribution commarkecon d… uhHHh productio equally owned by owned by the contradicommarkecon n is… the people citizens +market economy manageme lies on a small are done by the nt of group in a people -protects privatep roperty resources powerful party -allows free market and supply and demand to determine … prices -driven by motivation of self-interest can own nah yea property? +command economy capitalism goes bye bye can still exist -allows government to safeguard people and its market -government has large role in stuff lesson 5: consumption and +traditional economy somewhere here idk consumers pros (pagkonsumo at ang mamimili) a mixedecon has all advantages of a markecon wauht ehs a cuhnsoom?? lesson 4-3: communism and consumption - purchase and use of products to meet needs and wants socialism gives meaning to production or process of creating products (lesson 4f: komunismo at sosyalismo) consumer - the people who buy and use products lets make it simple. heres a table when consumers consume they be satisfied yay factors of consumption COMMUNISM SOCIALISM association - consumers are influenced by brand association or symbolism it is a… social theory of social bandwagon - effect where people buy what other people organization organization are buying to fit in system that where there is demonstration effect - effect of behaviors of people on focuses on public or shared behaviors of others shared ownership of debt - owing money ownership and the means of no class, state, production expectations on future price changes or income can and money change a consumer’s decisions income - money earned from work or another source ideology political and just economic price changes - stuff like sales, discounts, and inflation economic proposed karl marx and robert owen by friedrich engels objective to achieve to achieve property of max toribio types of consumption rules that give protection to direct - gives immediate satisfaction and benefit consumers productive - product makes new product that provides ra 7394: consumer act of the philippines - consumer greater satsifaction rights and safety wasteful - doesnt give satisfaction revised penal code - prohibiting the copying of a brand harmful - negative effect to consumer or society and appearance of a product civil code of the philippines - responsibility of the rules of consumption producer to maintain the safety of the consumer law of variety - consumers get more satisfaction from price tag law - products require a price tag attached buying various products law of harmony - consumers want products that rights of a consumer complement each other (e.g. 21° angle and 69° angle) a consumer has the right to: law of imitation - consumers get satisfaction when they -basic needs consume products copied from others -safety law of economic order - consumers prioritize spending on -advertising basic needs (like food) and get satisfaction -choose law of diminishing (marginal) utility - the satisfaction -be heard gained from a product decreases with continuous -compensation for damages consumption as the product reaches its “saturation point” -be educated -utility - satisfaction a consumer gets from consumption -a healthy environment of a product (measured in util) -marginal utility - additional satisfaction gained (change in util) the responsibilities of a consumer -total utility - total satisfaction obtained (util) critical awareness - be observant regarding the use, -e.g. every time you drink a water bottle, ur total utility quality, and value of products would go from 10, then 18, 24, 28, 30, 31, 31, and 31 action - take action and give concerns to ensure fair again, you can see that ur marginal utility is decreasing treatment every time (10, 8, 6, 4, 2, 1, 0) social concern - know the effect of our consumption to other people environmental awareness - recognize the environmental consumer vs producer effects of improper consumption consumer - low price, saves and buys a lot producer - high price, does a lot to get them p r o f i t national consumers affairs foundation made to improve the management, coordination, and characteristics of a big brain effectiveness of programs and policies of government consumer agencies and private orgs regarding consumer rights critical - checks options carefully (ingredients, price, quality, etc) le people of the ncaf are dti, doa, deped, and the doh always checks alternatives - knows how to find a replacement that also meets his needs catches cheaters - alert and always ready to correct the sellers mistakes reasonable - considers price, quality, and satisfaction gained from a product. follows his budget - doesnt care if its popular and still checks if its needed doesnt respond to ads - doesnt care aobut how good the ads look like and doesnt panic-buy remember!! consumers: (panic-buying - a consumer buying a lot of stuff because -have rights to be known and defended of an upcoming or after a disaster) -must understand and follow consumer rools -have duties to complete property of max toribio free capital - used according to the preference of the lesson 6: production entrepreneur special capital - has a specific use that other capitals (produksyon) cant do ok then what about production (not factored) labor vs capital intensive products - goods (things we buy or use) and services (jobs people do to help people) used to achieve satisfaction of labor intensive people in their endless waves of needs and wants -job production and teritary sector (teritary sector - production - process of combining factors of production focuses on services) to create a product -personalized or customized - from latin word “productio” meaning bring forth -lower fixed costs every process has an input (ppt and google docs), process -higher average costs (typing this), and output (this ap reviewer) wow ap became esp, research, and ict capital intensive -batch and mass production -standardized project factors of production -higher fixed costs -the stuff needed to make a product. we cannot do so -lower average costs without just one of these factors entrepreneur natural resources a person who manages other factors of production to everything that is useful for people came from nature create products which is why it is the most useful and most important also known as a businessman, producer, or capitalist type of resource fixed and immobile, there is a limit, multi-purpose the questions one shall ask as an entrepreneur -what do we do? labor -for whom will it be done? people who put in physical and mental energy to the -how much will be produced? creation of products -where will we get our factors? they rae the ones who use and develop resources to gain -until when will the product be produced? benefit -what will be the benefit? types of work-force the abilities one shall obtain as an entrepreneur professional (mental labor/white collar job) (in creating products) college graduates -new product reasoning and analysis work -new replacement product -complementary product worker (physical labor/blue collar job) -innovation skilled - has high level of knowledge, skill, and experience -novelty semi-skilled - knowledge, skill, and experience is lower -economical than skilled workers capital the man–made materials used in creating production type of capital according to change of form circulating capital - quickly changes form and is quickly consumed (e.g. oil, electricity, sugar) fixed capital - does not quickly change form and has long-term use (e.g. buildings, machinery, vehicles) property of max toribio stages of production primary stage - gathering of raw materials secondary stage - processing of raw materials (refining process) final stage - arrangement of finished products (packaging, labeling, distribution) for people to use value of production amount spent by the producer to make products value of production serves as a basis for setting the price of a product natural resources > rent labor > salary capital > interest entrepreneur > profit natres + labor + capital + entrepreneur = factors of production rent + salary + interest + profit = value of product types of production values fixed cost - costs that never change variable cost - costs that change as production increases total cost - sum of fc and vc, serves as a basis for the price of products PERIODICAL CUT-OFF the rest of the powerpoint will NOT be part of the perio. 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