The document provides an overview of economics, defining it as the study of scarcity, resource utilization, and societal wealth, with Adam Smith's definition highlighting the focus on wealth production and distribution. It distinguishes between positive economics, which analyzes economic conditions objectively, and normative economics, which involves ethical judgments and policy implications. Additionally, it outlines the branches of microeconomics and macroeconomics, emphasizing their respective focuses on individual economic units and the economy as a whole.

1. ECONOMICS
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2. Economics
Economics is the study of scarcity and
how it affects the use of resources, the
production of goods and services, the
growth of production and well-being
over time, and many other important
and complicated issues that affect
society.

3. DEFINITION
“Economics is the science of wealth” This definition
was given by Adam Smith. He is also known as the
'father of economics. According to this definition,
economics is a science of the study of wealth only. It
deals with production, distribution, and consumption.

4. ECONOMICS
SYSTEM
1
2
3
Capitalism
Communism
Socialism
4 Traditional economy

5. ELEMENTS OF ECONOMICS
Goods
Services

6. POSITIVE ECONOMICS
•is an economic analysis that considers economic
conditions "as they are" or economics "as it is".
•Uses objective or scientific explanations in analyzing
the different transactions in the economy.
•It simply answers the question "what it is. Example of
positive statements:
•The economy is now experiencing a slowdown
because of too much politicking and corruption in
the government.

7. NORMATIVE ECONOMICS
•economic analysis which judges economic conditions
"as it should be'. Concerned with human welfare.
•Deals with ethics, personal value judgments and
obligations analyzing economic phenomena.
•It answers the question 'what should be'.
•referred to as policy economics because it deals with
the formulation of policies to regulate economic
activities.
•Examples of normative statements: The Philippine
government should initiate political reforms in order
to regain investor confidence, and consequently

8. MICRO MACRO
•Branch of economics which deals with the
individual decisions of units of the
economy- firms, households, and how
their choices determine relative prices of
goods and factors of production. The
market is its central concept. It focuses in
two main players- the buyer and the seller,
and their interaction with one another.
•Microeconomics discussed the theories of
demand and supply, individual decision
making, theories of production, output,
and cost of firm's profit maximization
objective, different types of business
organizations and kinds of market
structure.
•It is a branch of economics that study the
relationship among the broad economic
aggregates like national income, national
output, money supply, bank deposits, total
volume of savings, investment,
consumption, expenditure, general price
level of commodities, government
spending, inflation, recession,
employment, and money supply (Kapur
1997).
•Macro implies that it seeks to understand
the behavior of the economy as whole.
ECONOMICS TYPES

9. IMPORTANCE OF ECONOMICS

10. “A nation is not made wealthy by the
childish accumulation of shiny metals,
but it is enriched by the economic
prosperity of its people.”
Adam smith

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