Introduction To Economics

INTRODUCTION TO
ECONOMICS
GINO G. LACANDULA
SHS TEACHER
LEARNING OBJECTIVES
• Identify basic economics problems of the country

• Discuss the economic problems affecting the economic stability of the
country
• Analyze and explain the root cause of the economic problems of the
country
• ABM_AE12-Ia-d-1
WHAT IS ECONOMICS?
• Is a social science concerned with using scarce resources to obtain the maximum
of the unlimited wants of society.
• Is the study of how societies use scarce resources to produce commodities and
distribute them among different people.
• Is the study of production, distribution, selling and use of goods and services
• Is the study of how people use their limited resources to try to satisfy unlimited
wants.
• Scarcity – the limited nature of resources, which underlies the basic
economic problem.
• Economic Resources – the problem of having unlimited wants, but limited
resources to satisfy them.
• Natural Resources – came from nature that are used in production,
including land, raw materials, and natural process.
• Capital Resources – the processed materials, equipment, and buildings
used in production
• Human Resources – the efforts of people involved in production,
including labour and entrepreneurship.
• Needs – the essentials of life, such food and shelter.
• Wants – desires for non-essential items.
SCARCITY
• Is a condition where there are insufficient

resources to satisfy all the needs and want of
a population.
• Scarcity – is the reason why people have to practice
economics.
• Economics, as a study, is the social science that involves
the use of scarce resources to satisfy unlimited wants.
• Relative Scarcity – Is when a good is scarce
compared to its demand.
• Absolute Scarcity – is when supply is limited.
CHOICE AND DECISION MAKING
• Because of the presence of scarcity, there is a need for

man to make decisions in choosing how to maximize
the use of the scarce resources to satisfy as many wants
as possible.
OPPORTUNITY COST
• Refers to the value of the foregone

alternative.
ECONOMIC RESOURCES
• Land
• Labor
• Capital
• Entrepreneur
ECONOMIC AS SOCIAL SCIENCE
• As a social science, economics studies how

individuals make choices in allocating
scarce resources to satisfy their unlimited
wants.
2 BRANCHES OF ECONOMICS
• Macroeconomics
• Microeconoics
MACROECONOMICS
• Is a division of economics that is concerned

with the overall performance of the entire
economy.
MICROECONOMICS
• Studies the decision and choices of the individual

units and how these decisions affect the prices of
goods in the market.
• It also concerned with the process of setting prices
of goods that is also known as Price Theory.
BASIC ECONOMIC PROBLEMS OF
SOCIETY
• What to produce and how much

• How to produce
• For whom to produce
WHAT TO PRODUCE AND HOW MUCH
• Society must have to decide what goods and

services should be produced in the economy.
Having decided on the nature of goods that will
be produces, the quantity of these goods should
also decided on
HOW TO PRODUCE
• Is a question on the production method that

will be used to produced the goods and
services, this refers to the resource mix and
technology that will be applied in production
FOR WHOM TO PRODUCE
• Is about the market for goods. For whom will

the goods and services be produced? The
young or old, the male or female market, the
low income or the high income groups.
ECONOMIC SYSTEMS
• Traditional Economy
• Command Economy
• Market Economy
TRADITIONAL ECONOMY
• Decisions are based on traditions and

practices upheld over the years and passed
on from generation to generation. Methods
are stagnant and therefore not progressive.
COMMAND ECONOMY
• This is the authoritative system wherein decision-making

is centralized in the government or a planning
committee. Decision are imposed on the people who do
not have a say in what goods are to be produced. This
economy holds true dictatorial, socialist, and communist
nations.
MARKET ECONOMY
• This is the most democratic form of economic system.

Based on the workings of demand and supply, decisions
are made on what goods and services to produce. People
preferences are reflected in the prices they are willing to
pay in the market and therefore the basis of the producers'
decisions on what goods to produce.

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INTRODUCTION TO

• Identify basic economics problems of the country

• Is a condition where there are insufficient

• Because of the presence of scarcity, there is a need for

• Refers to the value of the foregone

• As a social science, economics studies how

• Is a division of economics that is concerned

• Studies the decision and choices of the individual

• What to produce and how much

• Society must have to decide what goods and

• Is a question on the production method that

• Is about the market for goods. For whom will

• Decisions are based on traditions and

• This is the authoritative system wherein decision-making

• This is the most democratic form of economic system.

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