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A Review of 10 Principles of Economics

The document outlines 10 principles of economics relating to how people and businesses make decisions, how people interact in markets, and how the overall economy works. It discusses topics like tradeoffs, costs, incentives, markets, government intervention, productivity, inflation, and unemployment. The principles are explained through examples and questions about concepts like opportunity costs, marginal changes, central planning, and the relationship between inflation and unemployment. Readers are asked to discuss what the article is about, identify the economic principles, and share their learnings.

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Esteria Santos
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22 views16 pages

A Review of 10 Principles of Economics

The document outlines 10 principles of economics relating to how people and businesses make decisions, how people interact in markets, and how the overall economy works. It discusses topics like tradeoffs, costs, incentives, markets, government intervention, productivity, inflation, and unemployment. The principles are explained through examples and questions about concepts like opportunity costs, marginal changes, central planning, and the relationship between inflation and unemployment. Readers are asked to discuss what the article is about, identify the economic principles, and share their learnings.

Uploaded by

Esteria Santos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 16

TEN PRINCIPLES OF

ECONOMICS: A
Review
Relating Business to Economics
• Both business and economics face many decisions.
• Business like economics, must allocate scarce resources among competing uses,
taking into account a range of stakeholder wants and needs. What are the
decisions face by businesses?
• A society faces many decisions as well. What are the decisions being made by
and for the society?
• Why is it important for society to manage its resources?
• What is economics?
How people and businesses make decisions
Principle 1: Decision Making Involves Trade Offs
• “There is no such thing as a free lunch”
• What are the trade-offs usually faced by a business manager/executive?
• Explain the trade-off between guns and butter
• Trade-off between clean environment and high level of income
• Efficiency vs. Equity
• Acknowledging life’s trade-offs is important because people and businesses
are likely to make good decisions only if they understand the options they
have available and can quantify them in some way to enable them to make
informed decisions
How people and businesses make decisions
Principle 2: The Cost of Something Is What You Give Up To Get It

• Are costs only be measured in monetary


value?
• Opportunity Cost: whatever must be
given up to obtain some item– the value
of the benefits foregone or sacrificed
How people and businesses make decisions
Principle 3: Rational People and Businesses Think at the Margin

• Decisions in life are rarely


black and white but usually
involve shades of grey
• Marginal Change
How people and businesses make decisions
Principle 4: People and Businesses Respond to Incentives

• What are examples of


incentives?
• Incentives alter behavior,
both directly and
indirectly
How People Interact
Principle 5: Trade Can Make Everyone Better Off

• Why does trade makes everyone better off?


How People Interact
Principle 5: Trade Can Make Everyone Better Off
How People Interact
Principle 6: Markets are Usually a Good Way to Organize Economic
Activity

• What is Central Planning?

• What is Market Economy?

• Invisible Hand
How People Interact
Principle 7: Government Can Sometimes Improve Market Outcomes

• If the market is amazing at its job, why do we the


government and its intervention?
How the Economy As A Whole Works
Principle 8: An Economy’s Standard of Living Depends
on Its Ability to Produce Goods and Services

• If the market is amazing at its job,


why do we the government and its
intervention?

• Relate productivity with standard of


living

• Policy-Productivity nexus
How the Economy As A Whole Works
Principle 9: Prices Rise When the Government Prints
Too Much Money

• Is there an inflation
in the Philippines?
What could be its
causes?
How the Economy As A Whole Works
Principle 10: Society Faces a Short-Run Trade-Off
Between Inflation and Unemployment

• Explain the
relationship between
Inflation and
Unemployment
ACTIVITY
• READ THOROUGHLY AS A GROUP THE ASSIGNED TEXT IN 30 MINUTES
• DISCUSS IN THE CLASS THE FOLLOWING:

• What is the article all about?


• What is/are the economic principle/s present in the article?
• What are your learnings from the text?
ASSIGNMENT
• Read the in-text article entitled “Cotton Ban Imposed by
Egypt” and answer the five (5) questions at the end of the
reading. Write your answers in a half-page of a yellow
paper.

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