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MELJUN CORTES Economics Lecture


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MELJUN CORTES Economics Lecture

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MELJUN CORTES Economics Lecture

  1. 1. Principles of MELJUNEconomics CORTESECONOMICS Meljun - defined as the science which deals with the activities of man in obtaining wealth for the satisfaction of his wants. All these activities that are concerned with the production & use of wealth. Economics – is a science & its method are scientific; it is a classified and systematized Body of Knowledge. - deals primarily with the Activities of MAN in obtaining Wealth for the satisfaction of his WANTS.
  2. 2. Principles ofEconomicsWhat are the relationships ofEconomics to the SocialSciences: Meljun1.) Economics and History2.) Economics and Sociology3.) Economics and LAW4.) Economics and Ethics5.) Economics and Political Science6.) Economics and Psychology
  3. 3. Principles ofEconomicsWhat are the relationships ofEconomics to the Natural MeljunSciences:1.) Economics and Chemistry2.) Economics and Geology3.) Economics and Physics4.) Economics and Biology
  4. 4. Principles ofEconomicsFundamentals Institutions ofThe Present Economics MeljunSystems:1.) Private Property2.) Competition3.) FREE Enterprise4.) Cooperative
  5. 5. Principles ofEconomicsDivisions of theField of Economics: Meljun1.)PRODUCTION2.)EXCHANGE3.)DISTRIBUTION4.)CONSUMPTION
  6. 6. Principles ofRelationshipsEconomics ofEconomics to thatSocial Sciences: Meljun Is a social sciences & deals with Economics Life of MAN living in Society. Every industry is dependent upon other industries in one way or another. The relationship of MAN to Wealth either as a Producer or as Consumer is a SOCIAL ACTIVITY. ACTIVITY
  7. 7. Principles ofEconomicsECONOMICS and History MeljunA knowledge of industrial andEconomics History is indispensableto the Economist who desires tounderstand present’s Institutions andProblems in the Society.
  8. 8. Principles ofEconomicsECONOMICS and Sociology MeljunThe problems of LABOR, the costlystrikes, unemployment, long hours ofWork, child labor and social insuranceAre the concern of both Sociology and Economics
  9. 9. Principles ofEconomicsECONOMICS and LAW MeljunLAW are nothing but the crystallizationof long-continued social usages and customs.LAW may direct the forces ofeconomics life for a while, they cannotcontinue for a long time if they run oneconomics practices.
  10. 10. Principles ofEconomicsECONOMICSECONOMICS and Ethics Meljun Ethics – science of Moral, like the other social sciences is related to economics. All individual CODES of Morals are the out growth the of the social code of morals. The conception of right or wrong exists only in society in the conduct of MAN as a Social Being.
  11. 11. Principles ofEconomicsECONOMICS and Political Science Meljun Political Science – the study of STATE organization has its Economics Aspects. The problems of Taxation are both Economic & Political. With the present tendency all over the world for government to regulate or go to into between political science & economics becomes more Evident.
  12. 12. Principles ofEconomicsECONOMICS and Psychology MeljunEconomics is a study both of man and ofWealth. The human side of economics isapproached chiefly through Psychology.Psychology – teaches that Man is abundle of INSTINCTS.Ex. Sex Instinct or instinct of curiosity Business Psychology Employment Psychology
  13. 13. Principles ofEconomicsECONOMICS and Chemistry today make Meljun -Most business concerns use of Chemical Tests to ascertain & determine the quality of materials which enter into the productive process. -Chemistry has given Mankind many industries.
  14. 14. Principles ofEconomicsECONOMICS and Geology Meljun-The exploitation of our mineral Wealthdepends to a large extent upon thediscoveries & investigations of theGeologist.-Geology – furnishes the information asto the location probable quantity andestimated value of our Wealth hiddenbeneath the surface of the earth.
  15. 15. Principles ofEconomicsECONOMICS and Physics Meljun -Physics the science that treats if Matter & energy especially of Mechanics, Heat, Sound, Light & Electricity. -Physics, the Engineer who directs our industrial Production must rely on the Information furnished by Physics. -Electrical Engineering has reshaped many of our methods of production.
  16. 16. Principles ofEconomicsECONOMICS and Biology Meljun -Biology –science that deals with the origin, structure & function of plans & animal has revolutionized our agriculture -and animal industry. -Biology – furnished the necessary information to veterinarians to fight the -Enemies of our animal resources.
  17. 17. Principles ofEconomicsInstitutions Meljun Defined as widely prevalent & highly standard social habits of Man.
  18. 18. Principles ofPrivateEconomicsProperty MeljunOwnershipsEconomics progress is closely bound upwith the institutions of Private Property.Takes many forms and include not onlyFood, Clothing and Land but also all formsof Real Estate and Exclusive Privileges.
  19. 19. Principles ofCompetitionEconomics Meljun-Progress is intimately bound up with competition and economics society From the very beginning has been influenced by this fundamental institution.Competition , among producers of economics goods results in more efficientmethods of production in an endeavor to reduce costs.Competition – exists not only among sellers but also among buyersCompetition – exists among nations of the same stage of economics development as well as in different stages of progress.
  20. 20. Principles ofFREEEconomicsEnterprise Meljun freedom to engage in all sorts of enterprise has been responsible for economic progress. the era of free enterprise known by the characteristics phrase LAISSEZ-FAIRE
  21. 21. Principles ofCooperation Economics-Competition among sellers has led to the formation of associations among them. Cooperation among buyers of Meljun consumers also exists in many advanced countries today.Cooperation – Cooperative stores are manifestation of the Cooperative movement among consumers.Collective Buying – is always much cheaper then when consumers buy separately.Competition & Cooperation exist side by side. Competitionand Cooperation are the cause for the great economic activity.Cooperation may be the result of competition. Both competitionand cooperation progress in the world today.
  22. 22. Principles ofEconomicsPRODUCTION Meljun Production – deals with the factors necessary in the creation of wealth. These FACTORS: 1.) LAND 2.) LABOR 3.) CAPITAL 4.) ENTERPRISE
  23. 23. Principles ofEXCHANGEEconomics Meljun -is chiefly devoted to the consideration of value & price, principles of money, credit & Banking & their relation to price and the exchange of goods are subjects included in this division.
  24. 24. Principles ofDistributionEconomics - is that Meljun division of economics that deals with the apportionment of the social income or national dividend among the different factors That cooperation in production. - used in economics theory should not be confused with marketing or the processing of goods from the producer to the buyers or consumers
  25. 25. Principles of EconomicsConsumption Meljun-Deals with the utilization of goods and services in thesatisfaction of human wants.PRODUCERS is also a CONSUMER but consumption as adivision of economics refers specifically to the utilization.CONSUMPTION - a Producer is also a consumer butconsumption as division of economics refers specifically to the utilization of finished goods by the ultimate consumer. consumer
  26. 26. Principles ofEconomicsEconomics andBusiness MeljunThe business man especially is concerned in his Work with theSubject-matter of economics.A man may be successful in business, but it does not necessary follow that he is a Good ECONOMISTS.Economists – defined as the science of business.Economics principles have been formulated from facts provided by business & the subject-matter of Economics consists to a large extent of the problems of business.
  27. 27. Principles ofEconomicsEconomics andCitizen MeljunEither as a WAGE-EARNER or as an Employer, the Filipino Citizen is deeply concerned with the production & distribution of wealth.Every person is a part of the economic system & everyone is in contact with economic phenomena in one way or another, so that it inevitable that we are all students of economics.
  28. 28. Principles ofEconomicsEconomics andState man Meljun-The state man is confronted with a variety of economics, upon the solution of which often depends his PRESTIGE and success in public life. Peace time problems for the state man include those for Financing the normal activities of Government.
  29. 29. Principles ofEconomicsFundamental MeljunEconomicConcepts
  30. 30. Principles ofEconomicsFundamental Economic Concepts:Goods & Utility MeljunGoods - anything that satisfies HUMAN WANTS .
  31. 31. Principles ofEconomicsGoods - Meljun anything that satisfies HUMAN WANTS . GOOD – has a broad meaning. Ex. Material thing – commodities Im-materials thing – services - common terms of Economics. - It is an all-inclusive term and embraces all kinds of commodities as well as services. - the SERVICES of physician, a lawyer or a teacher satisfy HUMAN WANTS just as much as concrete and tangible objects such as Cell phone, Laptop, GF. - Services are immaterials GOODS while the Commodities are materials GOODS example Sardines, Corn Beef
  32. 32. Principles of Utility - Economics the quality of a thing that satisfies DESIRE. All goods possess some qualities or attributes that are capable of satisfying some one or other of Meljun our numerous DESIRES or WANTS.Utility – is an Abstract concept; itis not attached to the thing like a Physical Quality. - It is subjective not objective. - is not inherent in the objectwhich it makes Desirable. It comes into existenceonly because DESIRES appear & it passes out ofexistence when the DESIRES disappear or die out.A thing not wanted by Man has no Utility.
  33. 33. Principles of Utility & Economics Human WANTS Meljun-- It has been observed that Utility comes into existence because of the presence of WANTS. Now WANTS are not always inborn in MAN; there are certain wants that appear because of the relation of MAN with his fellowmen. The individual aspect of UTILITY is not only due to the difference in the DESIRES, tastes and feeling of MEN but also to the differences in the MONEY incomes or the ability of individuals to satisfy their DESIRES. Utility is a quality not only of material things but also of immatrials goods like SERVICES, DEEDS, BEHAVIOR.
  34. 34. Principles ofUtility & EconomicsHuman WANTS MeljunUTILITY depends upon the individual inasmuch as MEN differ intheir TASTES and DESIRES. Things have different appeals todifferent individuals.The mere recognition that a thing is useful does not infuse the thingthat WANT-GRATIFYING quality called UTILITY. The thingrecognized as being useful must also be capable of being used.All thing that no increase in MAN’s WELL-BEING, but if found outthat are undiscovered and unused, also danger to the MAN thenthese thing have no UTILITY.
  35. 35. Principles of EconomicsFREE GOODS Meljun Free Goods exist only in certain placesand not everywhere. Example of these are air; water;sunlight; these things are gifts of natureand any body can enjoy them in almostany quantity. Man enjoy these FREELYthen this is FREE GOODS.
  36. 36. Principles ofECONOMIC EconomicsGOODS Meljun If goods are scare, they must be paid for; they command a price. Few of the things that satisfy HUMAN WANTS are FREE. Most of the things we need are SCARCE and can be obtained only by the exertion of effort. Goods that are SCARCE are calledECONOMICGOODS. The ability to command a price is the mark of Economic Goods. If goods are scarce we must ECONOMIZE in their use; Generally, Nobody ever Economize in the use of sunshine or air or water in the open spaces.
  37. 37. Principles of EconomicsFundamental Economic Concepts:Economic Terms for Scientific Meljun Analysis:Good WealthUtility MoneyHuman Wants Public WealthFree Goods Private WealthEconomics Goods Capital Income Scarce
  38. 38. Principles of EconomicsFundamental Economic Concepts: INCOME = Consists of Meljun the goods & services resulting from the productive activities of the people.
  39. 39. Principles of EconomicsFundamental Economic Concepts: MeljunMaterials Goods/Income of a person – include all those things such as clothing, foods, houses, machinery, boats, ca, rice, other forms of property. - finals forms ready to be used up or consumed immediately.
  40. 40. Principles of EconomicsFundamental Economic Concepts: MeljunImmaterials Goods/Income of a person – consists of such diverse things as the services of servants example: teacher’s instruction physician’s consultation nurse’s care taking
  41. 41. Principles of EconomicsFundamental Economic Concepts: MeljunMoney Income – enables a man to procure both material & immaterial goods. - is a free & it could be used to any form of income desired at any time. Ex. Automobile 2 Specialized Forms of Income: 1.) Materials Income 2.) Immaterials Income
  42. 42. Principles of EconomicsFundamental Economic Concepts:Fluidity of INCOME: Meljun INCOME -Income is often defined as an INFLOW of satisfaction from Economics Goods. Ex. Nation’s Wealth – utilized in many ways & out of this Utilization. MONEY INCOME – person who received income & if the income is saved. Example: Buying stocks/bonds; invested in a mortgage Money Deposited in a Bank.
  43. 43. Principles of EconomicsFundamental Economic Concepts:Different Kinds of Meljun INCOME: -Income from CAPITAL comes in many forms: 1.) Money Income - Income is usually 2.) Real Income reckoned in terms of 3.) Psychic Income MONEY. 4.) Gross Income 5.) Net Income 6.) Individual Income 7.) National Income
  44. 44. Principles of EconomicsFundamental Economic Concepts: Meljun1.) Nominal Income – income is expressed in terms of money. - it is a Money Income.2.) Real Income – these are materials goods in the forms of clothing ; rice; meat; vegetables & other concrete objects. Ex. Standard of Living
  45. 45. Principles of EconomicsFundamental Economic Concepts: Meljun3.) Psychic Income – desirable results produced in the realm of feeling by valuable objects or by 1.) Salary of Man public esteem valuable changes in the job satisfaction environment which 2.) Men invest money on a beautiful home. Accrue to or affect an economic within given period.
  46. 46. Principles of EconomicsFundamental Economic Concepts: Meljun ** A large money income does not always mean a large measure of Well-being on the part of the receives for if prices are high relatively small quantities of goods can be bought with even a large money income. ** Money is only a means to an end; it is used to purchase those desirables objects that are essentials to well-being. well-being
  47. 47. Principles of EconomicsFundamental Economic Concepts: Meljun4.) Gross Income – means the total receipts that he receives within a certain period of time. example: acquisition of INCOME expenses are incurred Profits – cannot be ex. Sari-Sari Store – TOTAL RECEIPTS determined by looking at the gross keeping books of income alone. Expenses must be deducted. transactions
  48. 48. Principles of EconomicsFundamental Economic Concepts: Meljun 5.) NET Income – is an income after deducting all operating & administrativ expenses; taxes. Net Income of Wage Earner - is the thing that counts & jus as in the case of the individua it is not the amount that he earns but the amount that he saves that determines his real worth.
  49. 49. Principles of EconomicsFundamental Economic Concepts: Meljun6.) Individual Income – the aggregate monetary income of the individual is larger than the value of the National Product. ex. Profit of the Seller/Wholeseller Employee Net Take Home Pay7.) National Income – is not always equal to the sum of individual income. ex. Philippines Income
  50. 50. Principles of EconomicsFundamental Economic Concepts: MeljunINCOME OF THE PHILIPPINES: - What constitute the Total Wealth of the Philippines. It is desirable also to know what is the TOTAL NATIONAL INCOME from year to year to determine whether the country is growing Richer or Poorer.