basics of economics helps learners to understand the definition of economics, concepts of economics, division of economics and relationship of economics to other sciences.

1. Module 1
Lesson 1
Basic Concepts of Economics

2. Pre-test
I. True or False: Carefully read each sentence
and determine if the sentence is true or if the
sentence is false.
1. Economics comes from the Greek word oikonomia
which means household chores.
2. Economics is considered a field of social science.
3. Economics is relevant because it is part of
everybody’s life.
4. There are three (3) divisions of Economics, the
microeconomics, the macroeconomics and the home
economics.
5. As a science, Economics is related to other sciences.

3. II. Essay. Answer the following using five (5)
sentences and above.
a. As an individual, what do you think is the
essence of studying economics?
b. How do you apply economics in your
household?

4. In front of you are candies that
you could get and eat. Come
on, everybody is invited to get
candies. Do not be shy… 

5. Analyses of the activity
 What happened when you were invited to get
candies? State your observation.

6. Definition of Economics
 Using the words I have written on the
board, how would you define Economics?
?

7. Economics as defined
ECONOMICS
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 needs of the people

8. 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 situations 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”

9.  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 desires.”
 Gerardo Sicat (Economics)
“a scientific study which deals with how individuals and society
make choices,”

10. 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

11. 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.

12. Concerns of Economics
 Economics is concerned with PRODUCTION
Production is the use of inputs to produce outputs.
Inputs are commodities or services that are used to produce goods
and services.
Outputs are the different goods and services which come out of
production process.
Society have to decide what outputs will be produced and in
what quantity

13.  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 concerned with government
expenditures and revenues. Economics studies how the
government raises money through taxation and
borrowing.

14. DIVISIONS OF ECONOMICS
ECONOMICS
MICROECONOMICS
Specific
Deals with the economic
behavior of the individual
units such as
consumers, firms, the owners
of factors of productions
MACROECONOMICS
General, economy as a whole
Deals with the economic behavior of
the whole economy or its aggregate
such as
government, business, unemployment,
inflation and the like.
Refers to management of
income, expenditures, wealth or
resources of a nation.

15. Types of Economics
1. Household Economics – most common use of economics is
for the family. At this level, anyone who knows the economic
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.

16. Is Economics a science?
Explain why if “yes” or why not if “no”
?

17. 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, 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 behavior, unpredictable in nature.

18. Relations of Economics to
other Sciences
ECONOMICS
MATHEMATICS
NATURAL
SCIENCE
SOCIOLOGY
GEOGRAPHYHISTORY
ETHICS/
RELIGION
POLITICS

19. Essence of Studying
Economics
 To understand the world better
Applying the tools of economics can help you understand global
and cataclysmic events 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”

20.  To achieve social change and contirbute to
National Development
Economics can help us understand the origins of serious social
problems such as: unemployment, hunger, poverty, disease, child
abuse, drug addiction, violent crime. It will also explain why previous
efforts to solve these problems have failed, and help us to design
new, more effective solutions.
 To help prepare for other careers
Economics has long been a popular college major for individuals
who are intending to work in business. But it has also been popular
among those planning careers in politics, international
relations, law, medicines, engineering, etc. This is for good reason
because practitioners in each of these fields often find themselves
confronting economic issues.

21. Developments of Economics
 Historical
INDUSTRIAL STAGE
HANDICRAFT STAGE
AGRICULTURAL STAGE
PASTORAL STAGE
HUNTING AND FISHING

22. ROWTOW’S 5 STAGAES OF
ECONOMIC DEVELOPMENT
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23. The Development of Philippine
Economics
Pre-
Hispanic
PNOY
Gov’t
Fill in the economic development of the Philippines and the
significant policies in each stage.