Introduction to Economics PDF

Introduction to ECONOMICS Presentation by Gil M. Mallen, Jr. with the assistance of Mr. Joshua Villarico with templates and content from Canva  Defining Economics Scarcity and Opportunity Cost Outline Resources and Methods Macroeconomics and Microecon...

Introduction to ECONOMICS Presentation by Gil M. Mallen, Jr. with the assistance of Mr. Joshua Villarico with templates and content from Canva  Defining Economics Scarcity and Opportunity Cost Outline Resources and Methods Macroeconomics and Microeconomics Supply and Demand  Learning Outcomes Defining the study of economics and its Understanding our limited resources and social implications how that affects our choices Awareness of economic scale, trade, and Applying knowledge to real-word issues supply and demand and educational assignments DEFINING ECONOMICS Economics is often associated with wealth and finance, but it is not all about money. Economics is a social science. In basic terms, it is the study of people and their choices. It considers how things are made (produced), how things are moved around (distributed), and how things are used (consumed).  What does an Why is economics economist do? important? An economist evaluates programs, studies Economics helps us understand historical human behavior, and explains social phenomena. trends, predict future outcomes, inform our They can be teachers, advisors, and decisions, and become more efficient in our consultants. Their contributions affect resource consumption. everything from household decisions to It influences the price of your shoes to the jobs government policy. that will be available in the future. Macroeconomics and Microeconomics There are two major fields of economics: macroeconomics and microeconomics. Macroeconomics: the study of production, employment, prices, and policies on a national scale. It looks at the economy as a whole, including a nation’s output, unemployment, inflation, interest rates, government spending, and growth. An example would be international trade. Microeconomics: the study of how consumers, workers, and firms interact to generate outcomes at the individual and business levels. Examples include a local bakery deciding what goods to sell or you choosing to buy one product over another.  TOPIC MACROECONOMICS MICROECONOMICS Prices of all goods taken as a Prices of specific goods PRICES whole as measured by price indices Relative prices of factors Income in terms of wages of INCOME National income laborers of a company Number of employed and Number of employees in a EMPLOYMENT unemployed persons in the company labor force in the country production rate of a certain PRODUCTION GNI and GDP good in a place  Descriptive - gathering of relevant data Methods Theoretical - analysis of data Applied - Formulation of policies  Inductive Deductive Also empirical Also hypothetical Starts with facts or observations based Starts with generalization, usually a on empirical data hypothesis Ends with theories, generalized Ends with facts to support or refute the explanations, conclusions about general statement observed irregularities  Scarcity & Opportunity Cost A key concept in economics is scarcity. We all need and want things. Those things require resources, such as raw materials, workers, and time, to make them. Scarcity is the idea that the demand for a good or service is higher than what is available. We have unlimited wants but limited resources. Scarcity forces us to make choices by deciding what we really need or what would be most beneficial. This leads to another key concept: opportunity cost. What happens when you choose to buy one product over another? Or, when you make the decision to go to one event instead of another? We can’t have everything we want, so we are always making choices by weighing the benefits and costs. Opportunity costs are the things we give up or don’t do because we choose something else. When you choose to go to a sporting event instead of a movie, the movie is the opportunity cost because it is an opportunity you are missing due to your choice. Supply and Demand Supply is the amount of goods available, and demand is how much the public wants/needs it. The cost of a good is driven by demand. If demand is high, the price will increase. If demand is low, the price will decrease. Businesses aim to find the highest price they can charge for a product without negatively affecting the demand for it. A real-word example would be a store that discounts its winter clothing once the season is over. Demand is no longer high, so they lower the cost as an incentive to buyers.  Specialization Specialization is another factor to consider when studying economics. Think of your favorite clothing brand. They most likely specialize in a particular area, such as athletic apparel. When an organization concentrates its labor and resources on a particular good or service, that is specialization. The reason organizations specialize is often because they have expertise in that area, and it is most efficient for them to concentrate their resources on that good or service. Specialization increases productivity and is conducive to our next concept: trade. Trade Trade occurs between individuals, businesses, and governments because we cannot efficiently produce everything we need by ourselves. Often this is because certain resources are more readily available in particular areas. Economies are made up of businesses and organizations that produce a good or service that they are best suited for and then trade for the goods and services they cannot efficiently produce. Trade is mutually beneficial as it leads to better productivity.  h o d l Met hic a G r a p  We have covered some of the basics of economics, from beginner principles to key Final concepts. Thoughts We will move on to the economic implications of our choices and how to meet our social goals in a mutually beneficial and sustainable way. Economics is a complex field, but it affects us all and we, in turn, influence it.