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    Basic Concept of Economics

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    Sarah Joy Vidallon
    Economics is defined as the study of how people and societies choose to employ scarce resources to produce and distribute goods and services to satisfy unlimited wants. It involves making choices due to limited resources and allocating them between alternative uses. Economics can be divided into microeconomics, which studies individual units like consumers and firms, and macroeconomics, which studies aggregates like unemployment and inflation at the national level. The study of economics helps understand global events and social problems, gain decision making skills, and contribute to national development.

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    Basic Concept of Economics

    Uploaded by

    Sarah Joy Vidallon
    48 views17 pages
    Economics is defined as the study of how people and societies choose to employ scarce resources to produce and distribute goods and services to satisfy unlimited wants. It involves making choices due to limited resources and allocating them between alternative uses. Economics can be divided into microeconomics, which studies individual units like consumers and firms, and macroeconomics, which studies aggregates like unemployment and inflation at the national level. The study of economics helps understand global events and social problems, gain decision making skills, and contribute to national development.

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    Economics is defined as the study of how people and societies choose to employ scarce resources to produce and distribute goods and services to satisfy unlimited wants. It involves making choices due to limited resources and allocating them between alternative uses. Economics can be divided into microeconomics, which studies individual units like consumers and firms, and macroeconomics, which studies aggregates like unemployment and inflation at the national level. The study of economics helps understand global events and social problems, gain decision making skills, and contribute to national development.

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    © All Rights Reserved
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    48 views17 pages

    Basic Concept of Economics

    Uploaded by

    Sarah Joy Vidallon
    Economics is defined as the study of how people and societies choose to employ scarce resources to produce and distribute goods and services to satisfy unlimited wants. It involves making choices due to limited resources and allocating them between alternative uses. Economics can be divided into microeconomics, which studies individual units like consumers and firms, and macroeconomics, which studies aggregates like unemployment and inflation at the national level. The study of economics helps understand global events and social problems, gain decision making skills, and contribute to national development.

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    of 17

    Basic Concept of

    Economics
    LESSON 2: BASIC MICROECONOMICS
    Economics as Defined
    From the Greek words OIKOS meaning household and NOMOS meaning management

    = household management

    The wise production and use of wealth to meet the demands or


    need or the people
    Economics as defined by authors of
    Economics Books
    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 and groups in society.”
    Roger Le Roy Miller (Economics, Today and Tomorrow)
    “Economics concerns situation 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 they want.”
    Hall and Loeberman (Macroeconomics: Principles and Applications)
    “The Study of choice under the condition of scarcity.”
    Economics as defined by authors of
    Economics Books
    Bernardo Villegas (Guide to Economics for Filipinos)
    “A social science that studies and seeks to allocate scarce human and non-human resources
    among alternatives in order to satisfy unlimited human wants and desire.”

    Gerardo Sicat (Economics)


    “a scientific study which deals with how individuals and society make choices”.
    Common words among definitions
    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
    Finally
    ECONOMICS – is a social science that deals with how people
    organize themselves in order to allocate scarce resources in order to
    produce goods and services that will satisfy the unlimited and
    multiplying wants and needs of man
    Concerns of Economics
    Economics is concerned with PRODUCTION
    Production is the use of inputs to produce outputs.
    Inputs are commodities or service that are used to produce goods and service.
    Outputs are the different goods and services which come out of productions
    process.

    Society have to decides what outputs will be produced and in what quality.
    Economics is concerned with DISTRIBUTION
    Distribution is the allocation of the total product among members of society. It
    is related to the problem of for whom goods and services are to be produced.
    Economics is concerned with CONSUMPTION
    Consumption is the use of a good or service. Consumption is the ultimate end of
    economic activity. When there is no consumption, there will be no need for
    production and distribution.
    Economics deals with PUBLIC FINANCE
    Public Finance is a concerned with government expenditures and revenues.
    Economics studies how the government raise money through taxation and
    borrowing.
    DIVISION OF ECONOMICS
    ECONOMICS

    MACROECONOMICS
    MICROECONOMICS
    General, Economy as a whole
    Specific
    Deals with the economic
    Deals with the economic
    behaviour of the whole economy
    behaviour of the individual units
    or its aggregate such as
    such as consumers, firms, the
    Government, Business,
    owners of factors of productions.
    Unemployment, Inflation and etc.
    Types of Economics
    1. Household Economics – most common use of economics is for the family. At this level anyone
    who knows the economics principles will be able to improve the running of the household.
    2. Business 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 the rent, salary,
    profits and others.
    3. National Economics – 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.
    Economics as a Science
    Is a science because it is an organized body of truth, coordinated, arranged and systematized
    with reference to certain general laws and principles (observation, formulation of theories,
    gathering of data, experimentation, conclusion, and Generalization)
    Economic analysis seeks to explain economic events using some kind of logic based on a set of
    systematic relations.
    It is a social science because the subject matter of economics is people or societies and their
    behaviour, and unpredictable in nature.
    Relations of Economics to the Sciences
    Mathematics

    Politics Natural Science

    Economics
    Ethics/Religion Sociology

    History Geography
    Essence of Studying Economics
    To understand the world better
    Applying the tools of economics can help you understand global and cataclysmic event such as
    wars, famines, epidemics, and depressions. Economics has the power to help us understand
    these phenomena because they result from the choices we make under the condition of
    scarcity.
    To gain self-confidence and become wise decisions makers
    Mastery of economics will help you to understand how things work in your society thereby
    “feeling Equipped”
    Essence of Studying Economics
    To Achieve Social Change and Contribute to National Development
    Economics can help us understand the origins of serious social problems such as:
    Unemployment, hunger, poverty, disease, child abuse, drug addiction, violet crime.
    To help prepare for the other careers.
    Economics has long been a popular college major for individuals who are intending to work in
    business.
    Developments of Economics
    Hunting and Fishing

    Pastoral Stage

    Agricultural stage

    Handicraft Stage

    Industrial Stage

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