Here are two examples of applying economic concepts: 1. A family's monthly budget includes expenses for food, housing, utilities, transportation, education, and savings. The budget amounts reflect the scarcity of resources and opportunity costs of choices made. 2. A news article discussed rising inflation rates. This real-world issue can be analyzed using economic models and data to understand impacts and potential policy responses.

2. WORK PLAN
 Introduction to Economics
 Choice and Decision Making
 Economic Resource
 Economics as a Social Science
 Macro and Microeconomics
 Basic Economic Problems of Society

4. Everybody goes
through a day
faced with
constraints or
limitations.

6. •It is the social science that involves the use of
scarce resources to satisfy unlimited wants.
•Humans want to have as many goods and
services as he can. However, his ability to buy
goods and services is limited by his income and
purchasing power.

7. Scarcity can
be RELATIVE
or
ABSOLUTE:
• RELATIVE SCARCITY – The good is scarce
compared to its demand.
Examples:
1. There is an abundant number of coconuts in
the country since the plant easily grows in
our soil and climate. However it become
scarce when the supply is not sufficient to
meet the needs of the people.
2. Bananas are abundant in the Philippines and
are being grown in a lot of regions around
the country. But when a typhoon destroys
banana plants and the farmer has no
bananas to harvest, then it become
relatively scarce.

8. Scarcity can
be RELATIVE
or
ABSOLUTE:
• ABSOLUTE SCARCITY – it is the event where the
supply is limited.
EXAMPLES:
1. Oil – we don’t have oil wells which we can
source our petroleum needs, so we rely
heavily on imports from oil-producing
countries like Iran and other Middle Eastern
countries.
2. Cherries – the country has no tight climate to
grow cherries and we have to rely on imports
for our supply of cherries.

9. CHOICE
DECISION
MAKING

10. Because of the presence of scarcity, there is a
need for a man to make decisions in choosing how
to maximize the use of the scarce resources to
satisfy as many wants as possible.
EXAMPLE:
A homemaker who has a monthly budget needs to decide on how to utilize it to pay
the rent, to buy food, to pay the children’s tuition fees, and to buy new clothes and
shoes.
If the budget is not enough, then the homemaker has to give up some of these
things. She needs to make a choice. If she decides not to buy new shoes for her
children at the start of the school year, then this is the choice she gave up.

11. It refers to the
value of the best
foregone
alternative.

12. EXAMPLES:
• When land is devoted exclusively to the cultivation of
rice, we give up an output of bananas or mangoes
that we could have planted on that area.
• A producer who decides to transform all his leather
into shoes, gives up the chance to produce bags with
that leather.
• A school teacher who could have worked in a bank,
gives up the salary that she would have earned as a
bank employee.

13. The opportunity cost of watching a
movie in a cinema is the value of
other things that you could have
bought with that money such as a
pint of ice cream, a combo meal in
a fast food, or a simple t-shirt to be
used in a PE class.

14. Giving up work in favor of a
recreational activity, say you go on
a week’s stay in Boracay on a leave
without pay.

15. A business proprietor that
withdraws P10,000 from his
savings account so he can buy
materials to be used in his
business.

17. SOCIAL SCIENCE
• Is the study of
society and how
people behave and
influence the world
around them.

18. ECONOMICS AS
SOCIAL SCIENCE
• In economics, it
studies how
individuals make
choices in allocating
scarce resources to
satisfy their
unlimited wants.

22. ECONOMIC SYSTEMS
•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.
•Exist in primitive and backward civilizations.

23. ECONOMIC SYSTEMS
•COMMAND ECONOMY
•Authoritative system wherein decision-making is
centralized in the government or planning
committee.
•Decisions are imposed on the people who do not
have a say in what goods are to be produced.
•This economy holds true in dictatorial, socialist,
and communist nations.

24. ECONOMIC SYSTEMS
•MARKET ECONOMY
•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’s preferences are reflected in the prices they
are willing to pay in the market and are therefore
the basis of the producer’s decisions on what goods
to produce.

26. ECONOMICS AS APPLIED SCIENCE
Applied Economics is the application of
economic theory and econometrics in
specific settings with the goal of
analyzing potential outcomes.

27. AGREEMENT:
•Search for a news item that is related to any
economic issue.
•Talk to the person who prepares the household
budget for the family. Make a list of all the basic
expenses for one month. Then ask the budget
for each of these expenses.