AP Notes Q1📈📈 PDF

Q1 AP Notes =========== GRADE 9 DLC (math sadly no history now) By: Franco Gonzalez 9A Antonio Delarmente 9D Jago Gonzaga 9E Lesson 1: Introduction to economics ----------------------------------- ### **S.A.R.S.** - - - - Franco picking up from here cuz anton is lazy (cheese) Franc...

Q1 AP Notes =========== GRADE 9 DLC (math sadly no history now) By: Franco Gonzalez 9A Antonio Delarmente 9D Jago Gonzaga 9E Lesson 1: Introduction to economics ----------------------------------- ### **S.A.R.S.** - - - - Franco picking up from here cuz anton is lazy (cheese) Franco is deleting my texts help me i live in connection terminated. Economy comes from *oikonomia* in Greek, and it means management of the household, such as allocation, scarcity, production, needs and wants. Scarce means limited, so limited resources with unlimited needs and wants. Allocation is something like budgeting, you spend some, you keep some money. Scarcity does not mean shortage, as scarcity is permanent, while a shortage is temporary. Microeconomics and Macroeconomics are the 2 branches of economics. Microeconomics talks about the individuals and business decisions, while Macroeconomics talks about the economy as a whole, or as a country. ### **Economic Resources** #### **Human Resources (HR):** Human resources are the people who do the work to produce goods and services to satisfy our wants and needs. There are many different types of jobs, teachers, carpenters, nurses, pilots, chefs, and many more. All these are human resources, and they belong to what is known as the ##### **Labor Force.** The labor force refers to members of the population 15 years old and above who are either employed, unemployed or actively seeking work. Retired persons, housewives and students who are not actively seeking work are not part of the labor force. Underemployed persons include all those employed persons who express a desire to have additional hours of work in their present job or to have a new job with longer work hours. They are available for work, actively looking for work. Computation: Labor Force = employed + unemployed.  #### **Natural Resources (NR):** Natural resources can be classified into land resources, fisheries and aquatic resources, and mineral resources. These natural resources are needed in economic activities. They are the source of food, fuel, medicine, construction materials and other materials used in production. It is important to conserve natural resources so that they can benefit both present and future generations. Like other countries, the Philippines is gifted with natural resources. How rich is the Philippines in natural resources? What benefits do Filipinos get from them? How can they contribute to economic development? **Natural Resources can be either non-metallic (oil, molave tree, round scad, etc.), or metallic (like copper, iron, gold, stone, etc.).** #### **Capital Resources (CR):** Capital resources are classified into physical capital, and human capital. All together, capital resources are used to create goods and services for us to consume. ##### **Physical Capital** Physical capital are the structures, equipment, and inventory that are used to produce goods and services. Structures Equipment Inventory ------------------------ ------------------------ ------------------------    Structures are the buildings for factories, offices, restaurants, grocery stores, shopping malls, and warehouses, just to name a few. These are the places where production takes place. Equipment are the tools and machineries that are used to produce goods. These are the things such as tractors, harvesters, ovens, stoves, and many more that make our work easier, and help transform resources into finished goods. Inventory refers to the raw materials used in production as well as the goods produced that are available for sale. These can be the ingredients that a restaurant uses to make food to serve its customers, or the dry goods that you find in your local grocery. ##### **Human Capital** Human capital refers to the human resources that we have talked about earlier. These are the people that are being employed by businesses based on their skills. They are the ones who operate the machines, use the computers, cook food, provide health care and many other things. Without people or human capital, physical capital such as structures, equipment, and inventory will become useless because there will be no one to operate and use these physical capital to create goods and services. So, when we say human capital, we are talking about the people being hired by businesses because of their skills.  (alotta this was copy pasted sorry) Lesson 2: Scarcity and Choice ----------------------------- ### **What is Scarcity?** Scarcity means that there are not enough resources to produce as many goods and services that could satisfy man\'s unlimited wants of mankind. Scarcity affects both individuals and as society. As individuals, having limited time hinders us from doing all of the things we want to do. As a society, our limited natural resources keep us from producing as much as we would want to. The economy cannot produce all that we need and want. The resources needed to produce goods and services are limited. Meanwhile, human needs and wants are unlimited. There is therefore a need to make wise decisions about how to use the available resources, and to choose the allocation system best suited for the society\'s needs. Copy pasted section over, anyway You can never escape Scarcity, as resources are not infinite, but limited, while human wants are unlimited. Therefore when limited resources face unlimited wants and needs there is scarcity. ### **Scarcity vs Shortage** Scarcity is a universal economic fact. It does not choose who it affects. Rich or poor people or countries are affected by it. To solve the problem, they may choose from a number of steps, among them using better technology which could improve production and reclaiming land from the sea. A shortage, on the other hand, happens when the supply of a good or service is low, and the demand for such is high, so buyers cannot purchase the quantities they desire. This [temporary] imbalance could be corrected by adjustments in the market. Basically shortage is temporary, scarcity is permanent.  *Read the image, wyd reading this?* ### **Dealing With Scarcity** All of us face scarcity. We as individuals and our economy as a whole try to deal with scarcity as we try to satisfy our wants and needs. The three concepts related to scarcity are efficiency, choice, and opportunity cost. #### **Efficiency** Because we have limited resources, we strive to make the best use of such resources. A society characterized by efficiency is one that gets the most it can from its scarce resources. When this happens, as many of our needs and wants as possible will be satisfied. Why do we need to use our economic resources efficiently? We aim for efficiency in order to make everyone as satisfied as possible. When efficiency is achieved, the size of the economic pie is as large as possible. Basically you gotta aim for efficiency so that you aren't wasting resources and wasting money on those resources. Efficiency must not be confused with equity. Equity means that the benefits of the use of resources are distributed fairly among the members of society. Economic efficiency, therefore, does not necessarily lead to economic equity. For example, it is possible that all of society\'s resources may be used efficiently but only a few benefit from such. ### **Choice** Scarcity forces us to make choices. Since we cannot have everything we want, we have to choose which of our wants we will satisfy, and which to leave unsatisfied as yet. In short, we choose among the available alternatives. Basically, you have to make a choice as you cannot have both choices due to scarcity. Next, #### **Opportunity Cost** Making choices entails costs. If resources are scarce, when you decide to produce a particular good, you would have to pass up on the opportunity to produce other goods. The opportunity cost of a good is the value of what you give up in order to have that good. In short, opportunity cost is the foregone alternative's value. Consider our first example under Choice. If the student chooses to review for his exam, he will have to forego watching the concert. The benefit of watching the concert is the opportunity cost of his decision to review. On the other hand, if he chooses to watch the concert, the opportunity cost of such a decision would be the benefit of reviewing for his exam. For example, you have to choose between bread or cake. If you choose cake, the opportunity cost is bread.  Okay, let's get to the fun part now: ### **Product-Possibility Frontier** An important graph that illustrates the ideas of scarcity, efficiency, choice, and opportunity cost is the production-possibility frontier (PPF). The PPF shows the possible combinations of output an economy could produce given the available factors of production (resources used to produce goods and services) and technology. Basically a graph that shows most of the ideas of economics if the possible combinations of output (i.e cake and bread) an economy could produce given the factors of production and technology. Example: Consider Country X which produces only books and bread (In reality, no country produces only books and bread, or any two goods alone. The books-and-bread example is given to simplify the situation. Books could be made to denote non-food goods while bread could stand for food.) With its available production and technology factors, the country could choose from a number of possible combinations of books and bread production. Table 1.1 below shows some possible combinations. **TABLE 1.1 ALTERNATIVE PRODUCTION POSSIBILITIES OF BOOKS AND BREAD** ----------------- ---------------------------- ---------------------------- **POSSIBILITY** **BOOKS (million copies)** **BREAD (million loaves)** ----------------- ---------------------------- ---------------------------- +-----------------------+-----------------------+-----------------------+ | A | 0 | 50 | | | | | | B | 10 | 37.5 | | | | | | C | 18 | 25 | | | | | | D | 24 | 12.5 | | | | | | E | 28 | 0 | +-----------------------+-----------------------+-----------------------+ **FIGURE 1.1 THE PRODUCTION-POSSIBILITY FRONTIER OF COUNTRY X** From the above PPF, we could see that if all factors of production were used to produce bread, 50 million loaves would be produced (point A). On the other hand, if all factors of production were used to produce books, 28 million copies would be produced (point E). If the country wishes to divide its factors of production and produce both books and bread, it could produce any of the combinations denoted by points B,C,D, and any other point on the PPF. (more copy-pasted sections ahead) ### **PPF and Efficiency**  Points along the PPF represent the combinations of output which can be produced by the economy if all available factors of production are used efficiently, given the state of technology. Point F and all other points within the PPF represent books-and-bread combinations which, although achievable, do not make full use of the available factors of production and technology. The objective of efficiency is thus not met. Basically, Point F is also known as an **Inefficient** use of resources for the production of goods. ### **PPF and Scarcity** Point G and all other points within the PPF represent the books-and-bread combinations which could be achieved given the available factors of production and technology. With its scarce resources, the best that the economy could achieve are combinations along the PPF. Additional factors of production or improved technology, or both, are needed to attain point G and all other combinations beyond the PPF. Basically, Point G is also known as an Unattainable point. It can only be reached if there is a change of resources or technology. ### **PPF and Choice + Opportunity Cost** The PPF in Figure 1.1 represents the possible combinations of books and bread that Country X would attain. Given the possibilities, the country could choose which point along the PPF would best satisfy the people\'s wants and needs. In relation to choice, the PPF in Figure 1.1 shows the schedule along which Country X can substitute books for bread. As Country X chooses which point along the PPF in Figure 1.1 to attain, it would become clear that there are opportunity costs. For instance, moving from point B to point C would mean giving up production of 12.5 million loaves of bread in order to produce eight million more books. Moving from point D to point C would mean having to give up production of six million books in order to produce 12.5 million more loaves of bread. Basically, a country may choose to move from Point A to Point B. Bread production would go from 50 million loaves to 37.5 million loaves, while Book production would go from 0 to 10 million loaves. The opportunity cost to this would be bread, while the benefit would be books.  *Filler image, content is on next page.* ### **Shift in the PPF** **FIGURE 7.2 SHIFT IN THE PRODUCTION-POSSIBILITY FRONTIER OF COUNTRY X** As has been mentioned earlier, point G could only be achieved through additional factors of production or improved technology, or both. Figure 1.2 shows the possible shape of Country X\'s PPF if it gets more factors of production or has better technology to turn such into output. Point G or any point along the PPF1 corresponds to higher production possibilities compared to points along the PPF0 (original PPF). The change from PPF0 to PPF1 is called a rightward shift in the PPF. Basically, it is only possible for the PPF to shift if there is a change in the amount of resources (scarcity reference), or a change in technology that can create a surplus in production.  Lesson 3: Needs and Wants ------------------------- Whats good its franco writing this cuz anton got lazy af ### **Needs and Wants** **Needs** - necessary for us to survive, such as food, shelter, clothing and healthcare (looking at you America). **Wants** - things, even when unmet, will not threaten our survival, such as luxury clothes, expensive food, etc etc. Needs are needed by everyone (wow), while wants vary from person to person. ### **Maslow's hierarchy of needs** **Self-actualization**: Desire to become the most/best that one can be. **Esteem**: When people desire that others have a high regard for them. **Love and belonging**: People want relationships with others and a sense of community. **Safety and Security**: Things we need to have a smoothly running society. **Physiological**: Needed for our bodies to achieve a stable state of equilibrium. ### **Needs and Wants the Government Should Address** Shocker, Scarcity affects our ability to satisfy Needs and Wants. Factors that change our needs and wants: Education, Income, Age, Tastes and Preferences and Profession. We **[must]** prioritize needs over wants. There are three human needs the government should address. Material Things, Freedom and Dignity in Life. This varies between developed and underdeveloped/developing countries. Abundance in material things is not enough for people to attain happiness and contentment in life. It cannot be used also as the basis of progress in a society. Each individual needs freedom. Aside from material things, freedom is the next thing we want to enjoy. The advantage of a developed country is that freedom can be easily given to the members of the society. Freedom gives us the chance to enjoy the things around us. We have the freedom to decide what we want to do. It gives us inspiration and opportunities. Sometimes, it compensates for our needs for material things. Nowadays, the reason for agitation and domestic hostility can be attributed to the absence of liberty of each member of humanity or family to decide for themselves. It also transpires even in wealthy families. And because of this, we can declare that lavish material things alone are not an assurance of an orderly surrounding. We can conclude that freedom to enjoy a quality life is an important element of development.  The government and economic system of a country affects the people's freedom. Planned economies control goods and services, limiting freedom (huh flashback to 1950 soviet union) Scarcity of Natural Resources causes limitations of one's freedom of choice. Abundance in material things and true freedom are two important characteristics of a developed country that could lead to economic prosperity. We can proudly state that a high level of economic prosperity gives us a sense of responsibility and values. Even the poor families in underdeveloped countries aim for decency and dignity in life though they lack material things. In general, the three characteristics of the needs of developed countries can serve as a challenge to underdeveloped ones to do their best in providing the said needs to their people.  Lesson 4.1: Theory of Consumption --------------------------------- ### **Consumption:** -the act of using goods and services to satisfy wants. -in macroeconomics, total spending by individuals or a nation on consumer goods during a given period. Utility is the sense of satisfaction, aka Util. \# of Servings (oreo) Marginal Utility Total Utility ----------------------- ------------------ --------------- 1 7 7 2 6 13 3 5 18 4 4 22 If you keep eating the same thing, at some point, you'll get tired of it. **Law of diminishing marginal utility** - The more any good is consumed in a given period, the less satisfaction is generated by consuming each additional unit of the same good. Variety can help with this. If they introduce new flavors of something, sales will go up because we want to try it, especially if we keep on consuming something over and over again. That's why plenty of places (like buffets) have variety so that you won't get tired of eating it. (TLDR: thing gets boring if its consumed over and over again) #### **Different types of Consumption:** Direct - **Buying to satisfy one's needs and wants.** If you buy for anyone else, it's still direct consumption. Productive - **buying to produce more goods**. For example, buying ingredients to cook. Wasteful - **consumption that does not provide any use or satisfaction. For example, buying a computer game and not playing it. It can also be a waste of resources due to inefficient use. I.e using more for less.** We are the consumers, as we buy the products. We purchase and use consumer products to satisfy our personal needs through consumption Consumer products - g**oods and services used by consumers for their personal and other needs**. (like food and clothing) Consumer services - services rendered by different business firms to repair and improve the consumer products. (netflix, restaurant food and any other thing you need to pay for that you dont own) #### **Factors affecting our consumption:** **-Income** **-Occasion** **-seasons** **-prices** **-trends/bandwagon effect** ### **Consumption in Philippine culture:** **-pakikisama** - Filipinos purchase goods sold by relatives and friends even if they are not needed. -**colonial mentalit**y - prefer foreign goods over locally produced ones. -**regionalism** - tendency to buy goods produced in their place of origin -**tradition** - consumption is influenced by beliefs and tradition. Advertisement's effects Provides consumers with information about certain goods and services. It is part of a sales strategy that aims to raise demand for certain products or services. Ads - posters, billboards, newspaper, tv, radio, internet, magazines ### **Types of Ads** Brand - refers to a class of goods identified by name as the product of a single firm or manufacturer. Reputation of the manufacturer is emphasized in this type of ad. If the manufacturer has a good record of making high-quality goods advertised as the product of the same manufacturer would be attractive to consumers. Testimonial - using celebrities to endorse. Companies can pay anything for the celebrity to endorse their products. Scare - makes it appear that consumers can suffer a rejection or missed opportunities if you dont get it. Bandwagon - trends basically like current popular stuff gets other people to buy the other products. Lesson 4.2: Rights and Responsibilities of a Consumer ----------------------------------------------------- ### **Consumer Rights:** ###  **1st Consumer Right is "The Right to Basic Needs"** which is just basic stuff like food, clothing, shelter, healthcare, education, and sanitation **2nd Consumer Right is "Right to Safety"** which is basically the right to be against the marketing of goods and services that are harmful to health and life **3rd Consumer Right is "Right to Proper Information"** which basically means that the customers receive sufficient and accurate information about goods and services. Details like the product\'s contents, usage instructions, expiry dates, cautions, and possible threats are all mentioned. **4th Consumer Right is "Right to Choose"** This is self-explanatory **5th Consumer right is "Right to Representation"** it just guarantees that citizens may share their complaints, concerns, and interests in shaping laws and rules related to consumer protection. **6th Consumer Right is "Right to Redress"** It is basically your right to pursue compensation for losses resulting from fraud, poor or faulty products purchased. This covers your right to replacements, repairs, or refunds. **7th Consumer Right is "Consumer Education"** Which means that customers are given power by their right to consumer education, that means that they are aware of their rights, obligations, and the safeguards in place to protect them. **8th Consumer Right is "Right to Healthy Environment" i**t means that consumers are entitled to live and work in an environment that is safe, clean, and sustainable. ### **Consumer Responsibilities:** Anyway I am back from a 1 to 2 hour break cuz I got lazy(real) anyway here are the 5 responsibilities - no one asked 1. 2. 3. 4. 5.  Lesson 5: Essence of Production ------------------------------- Whats good makin notes again jus like grade 8 -franco **The Allocation Problem(s)** - 4 basic economic questions: - - - - **(Extra: How to distribute it?)** **Starting a business:** 1. 2. 3. 4. 5. Once done, you can move on to, **What is production?** Refers to the process of using resources to produce goods and services to satisfy needs and wants. For example, pizzeria uses flour, water, tomato, meat, and other ingredients to make a pizza. ### **Factors of Production (Inputs)** It refers to the resources or inputs used to produce goods and services. In short, materials or ingredients. - #### **Land** - #### **Labor** - #### **Capital** - #### **Entrepreneurship** *Businesses: Sole proprietor (Just 1 owner), Partnership (2-5, 5 was a random number lmao), Incorporation (plenty of owners)* *The diagram presented here shows the results of using factors of production.*  *RENT- payment for the use of land and other natural resources received by the landlords.* *WAGES- amount of money received by workers as payment for their services.* *INTEREST- payment received for the productive services of capital* *PROFIT- entrepreneur received this payment after deducting all his/her expenses in the operation of the business.* ### **Types of input:** - #### **Fixed Inputs** - #### **Variable inputs** - #### **Production Function** - #### **Key Concepts:** 1. 2. 3. ### **Law of Diminishing Marginal Returns:** Number of Workers (input) Pizzas Made (output) Marginal Product (MP) --------------------------- ---------------------- ----------------------- 0 0 \- 1 5 5 2 15 10 3 20 5 4 22 2 5 22 0 6 18 -4 Labor Total Product Marginal Product Average Product ------- --------------- ------------------ ----------------- 1 10 10 10 2 22 12 11 3 37 15 12.33 4 49 12 12.25 5 58 9 11.6 6 64 6 10.66 7 64 0 9.14 8 61 -3 7.62 ### **Cost** - #### **Key ideas of cost:** - ##### **Fixed Cost** Rent, wages of regular employees, interest payments - ##### **Variable Cost** Materials, wages of contractual workers - ##### **Total Cost** - ##### **Marginal Cost** - #### **Formulas:** *Total Cost (TC) = Total Fixed Cost (TFC)+Total Variable Cost (TVC)\ Average variable cost (AVC): Variable Cost/quantity\ Average fixed cost (AFC): Fixed Cost/quantity\ Average total cost (ATC): Total Cost/quantity\ Average Cost (AC) = TC/TP.0\ Marginal Cost (MC) =*[*ΔTC*/*Δ*TP]{.math.inline} *(change in cost/change in quantity)\ Total Product (TP) is the quantity/output* ### **Table Example:** Quantity/Output Fixed Cost Variable Cost Total Cost Marginal Cost AVC AFC ATC ----------------- ------------ --------------- ------------ --------------- ------ ------ ------- 0 10 0 10 \- \- \- \- 1 10 10 20 10 10 10 20 2 10 17 27 7 8.5 5 13.5 3 10 25 35 8 8.33 3.33 11.66 4 10 35 45 10 8.75 2.5 11.25 5 10 60 70 25 12 2 14 6 10 120 130 60 20 1.66 21.66 *(also you might notice a pattern where AVC + AFC = ATC)* Explanation for people who don't get it: Fixed cost doesn't change at all. Variable cost changes when volume changes. Total cost is Variable Cost + Fixed Cost. Marginal Cost is uh basically for example 20 - 10 is 10, and 1 - 0 is 1, divide the 2 and you get 10. 27 - 20 = 7, 2 - 1 = 1, 7/1 = 7. AVC, AFC and ATC have formulas and are shown, just scroll up. **Economies of scale** -- If you are mechanized, the more you produce, the cheaper it becomes, but you have to look into how many inputs you put into fixed inputs. SMART -- Specific, Measurable, Attainable/Achievable, Realistic, Timely **End of Q1 Notes.** ==================== **Schizo corner** ================= **Q2 DLC** **Supply and Demand** **Market Equilibrium** **Elasticity** **Also bring a scientific calculator for AP** ============================================= **Connection terminated.**