This document provides an overview of basic economic concepts. It defines economics as the study of how societies manage scarce resources to satisfy unlimited wants. The key concepts discussed include production, consumption, exchange, and distribution. Microeconomics examines individual decision-making while macroeconomics looks at aggregate outcomes for an entire economy. The document also outlines the development of economics as a field and how it relates to other social sciences.

1. Basic Concepts of
Economics
CARL PATRICK SAHAGUN TADEO, BSED SS, LPT, MAED SS CAR
Course Instructor
carlpatricksahaguntadeo@gmail.com
0916-436-0139

2. Why study Economics?
A: Because the resources are
becoming scarce relative to
consumer wants.

3. What is Economics?
A: set of actions by individuals and
societies
: actions that are directed toward
meeting the ends
: means necessary to meet the
ends have alternative uses

4. What is Economics?
A: Efficient uses of scarce
resources to satisfy the needs
and wants of the people

5. What is Economics?
A: Managing the social activities such as;
PRODUCTION, DISTRIBUTION AND CONSUMPTION
Conclusion:Economics analyzes the
actions taken by society towards (1)
satisfying the needs and wants of the
people (2) the management of scarce
resources

6. What is Economics?
Note:It answers the questions;
1. How to produce?
2. When to produce?
3. For whom to produce?
4. Who will produce?

7. What is Economics?
It is coined as the queen of all
social sciences. Because it concerns
with the welfare of human beings
(de Guzman, n.d.)
It aims to meet the end of
SATISFACTION MAXIMIZATION
AND PROFIT MAXIMIZATION.

8. Etymological root word:
OIKONOMIA (G)( household manage-
ment later becomes state management)
It all started from household activities.
It aims to meet the end of
SATISFACTION MAXIMIZATION AND
PROFIT MAXIMIZATION.
DEVELOPMENT OF ECONOMICS
(de Guzman)

9. DEVELOPMENT OF ECONOMICS
Adam Smith- a Scottish born in
Kirkadly , Scotland, responsible for
the development of the study of
economics (de Guzman, n.d.)

10. DEVELOPMENT OF ECONOMICS
(de Guzman)
Adam Smith was coined as the FATHER
OF ECONOMICS
He is known to his book, “Wealth of
Nations” (1776)
This becomes the reference of other
economists and becomes the BIBLE of
economists.
A. Smith was a cynist, he supported the
labor class.

11. David Ricardo “Principles of
Economics and Taxation” and “Labor
Theory of Value”
Karl Marx “Father of Communism”
“Dos Kapital” “Communist
Manifesto”**
“Dialectical Materialism” ***
** with Fredrich Engels
***with George Hegel
DEVELOPMENT OF ECONOMICS
(de Guzman)

12. ECONOMICS & the REAL WORLD
(de Guzman)
Studying Economics is very important
because it provides an insight on issues
concerning human welfare such as;
unemployment, inflation, population
growth and poverty.
POVERTY is not God’s creation. It is a
result of defective man made
institutions (de Guzman, n.d.).

13. According John Maynard Keynes, “We are
slaves of defunct economists”
1930s Economic Depression
Keynes suggested that the government
should spend large amount of money in order
to solve the problem of depression (de
Guzman, n.d.).
Keynes coined as the FATHER OF MODERN
ECONOMICS
ECONOMICS & the REAL WORLD
(de Guzman)

14. ECONOMICS AND OTHER SCIENCES
1. Business Management- operating
techniques, researches, production,
inventory, marketing
2. History-past events used in decision
making
3. Finance- intervention of money as
medium of exchange “Money using
Economy”

15. 4. Physics- intervention of energy ,
transportation and communication
5. Sociology- relationship of actors of
economy
6. Psychology- behaviors of consumer
and producers in terms their needs
and wants
ECONOMICS AND OTHER SCIENCES

16. MICROECONOMICS MACROECONOMICS
MICROeconomics
looks into issues on
the level of the
individual people
and firms within the
economy. It tends to
be more scientific
in its approach, and
studies the parts that
make up the whole
economy (de Guzman,
n.d.).
MACROeconomics
looks at the total
output of a nation
and the way the nation
allocates its limited
resources of land,
labor and capital in an
attempt to maximize
production levels and
promote trade and
growth for future
generations.

17. MICROECONOMICS MACROECONOMICS
MICROeconomics
Analyzing certain
aspects of human
behavior, shows how
individuals and
firms respond to
changes in price and
why they demand what
they do at particular
price levels.
MACROeconomics
After observing the
society as a
whole, Adam Smith
noted that there was
an "invisible hand"
turning the wheels of
the economy: a
market force that
keeps the economy
functioning (de
Guzman, n.d.).

18. CONCEPTS OF ECONOMICS
1. Wealth- anything that has a useful value
(money, stocks, real estates, mineral deposits)
2. Consumption- direct utilization of goods
and services.
3. Production- processing of economic goods
are created.
3.1. Lands 3.2.Labor 3.3. Capital 4.4. Entrepreneur

19. CONCEPTS OF ECONOMICS
4. Exchange- trading of goods and services for
money, goods for goods, goods for services &
services for services
5. Distribution- allocating the scarce
resources to both household business sector.

20. PRODUCTION
(producer)
DISTRIBUTION
WEALTH
CONSUMPTION
(consumer)
Rent, Salary, Interest & Profit
EXCHANGE
(de Guzman, n.d.)

21. METHODOLOGY OF ECONOMICS
(de Guzman, n.d.)
1. Positive Analysis- “as it is”
Ex. The economy is in poverty
because of poor public
administration.
2. Normative Analysis- “as it should be”
Ex. The government should initiate
political reform to alleviate the socio-
economic condition of the people.

22. COMPONENTS OF ECONOMIC THEORIES
(de Guzman, n.d.)
1. Variables- basic elements of
theories (causes)
2. Assumptions- possibilities
(without premise)
3. Hypothesis-conditional statement
of how variables related to one
another. More realistic for there is a
basis)

23. 4. Predictions- statement that follows
assumptions and hypothesis.
ex. Panic buying
Note: Theory- systematic description of reality
COMPONENTS OF ECONOMIC THEORIES
(de Guzman, n.d.)

24. ECONOMIC RESOURCES
1.Natural Resources- includes water,
mineral, forest, land resources.
2.Human Resources- highest creation
- LABOR- capacity of man to work
-mental and physical capacities of man
3. Physical Resources- products
produced by man. Ex. Machineries

25. REFERENCES
de Guzman, J. Principles of Economics. Academic
Publishing Corporation.
De Leon, H. Economics, taxation and agrarian
reform.
 Fajardo, F. (2004). Economic development. Quezon
City: National Bookstore.
Marcelino, R. B., Viray, E., Bato, J., & Bautista, A.C.
(2010). Principles of Economics with taxation and
agrarian reform. Mandaluyong City, Philippines:
National Bookstore.