about economics

1. INTRODUCTION TO ECONOMICS

2. Studies how individual make choices in allocating
scarce resources to satisfy unlimited wants.

3. Two branches of economics
MACROOECONOMICS
it studies the economic system as a whole rather than the individual
economic units that make up the economy.
MICROECONOMICS
it studies the decisions and choices of individual unit such as consumer,
produce and the resource owner and how there decision affects the price of
goods in the market.
it is more concerned with PRICE THEORY
*PRICE THEORY
it is the process of setting prices of goods

4. SCARCITY
this is the insufficiency of resources to
meet the wants of consumers.
this is also the insufficiency of producers
that hamper enough production of
goods and resources.
the reason why people have to practice
economics.

5. TWO KINDS OF SCARCITY
1. RELATIVE SCARCITY
when a good is scarce compared to its demand.
2. ABSOLUTE SCARCITY
when a supply is limited.

6. ECONOMIC RESOURCES
-Also known as FACTOR OF PRODUCTION
-it is refers to the resources that can be used in
production

7. TYPES OF ECONOMIC RESOURCES
• Soil and natural resources that are found in nature. In nature and are not
manmade.
• Rent-payment received by the owner of land
LAND
• Physical and human effort exerted in production. It covers manual worker
like construction workers, machine operator and production workers.
• Wage- income received by labor.
LABOR
• Man-made resources used in the production of goods and services,
e=which include machineries and equipment
• Interest- income that earns by the owner of capital
CAPITAL

8. Economic system is means through
which society determines the answer
to the basic economic problem
mentioned.

9. 1. TRADITIONAL ECONOMY- based on
traditions
2. COMMAND ECONOMY- authoritative
system
3. MARKET ECONOMY- democratic system

10. BASIC ECONOMIC PROBLEMS OF
SOCIETY
1. WHAT TO PRODUCE AND HOW MUCH?
Society must decide what goods and services should
be produced in the economy. Having decided on the
nature of goods that will produced the quantity of these
goods should be decided on.

11. 2. How to produce?
is a question on production method that will be used
to produce the goods and services. This refers to the
resource mix and technology that will be applied in
production.
3. For whom to produce?
is about the market for the goods. For whom will be
goods and services be produced? The young or old, male
and female market, the low income or the high income
group.

12. -MOST FUNDAMENTAL BACKBONE OF THE
MARKET ECONOMY

13. SUPPLY AND DEMAND
DEMAND
-refers to how much (quantity) of a product or service is
designed by buyers.
LAW OF DEMAND
-when price goes up, demand goes down, when price goes
down, demand goes up.
Demand relationship
-relationship between price and quantity

14. SUPPLY AND DEMAND
SUPPLY
-represents how much the market can offer.
PRICE
-reflection of supply and demand.
LAW OF SUPPLY
-when price goes up, supply goes up, when price goes down, supply
goes down.
SUPPLY RELATIONSHIP
-relationship between price and how much of a good or service is
supplied.