Economics is a social science concerned with explaining and predicting phenomena in society. It studies how societies reconcile unlimited desires with scarce resources. Economics uses the scientific method to formulate theories and models to solve societal issues and problems. It has two main fields: microeconomics focuses on individual units and markets, while macroeconomics looks at the whole economy and goals like production and living standards. The key economic agents are consumers, producers, and the public sector, and they interact in markets determined by territorial, social, and cultural frameworks.

1. APPLIED ECONOMICS

2. Economics is a SOCIAL SCIENCE concerned with the
explanation and prediction of observed phenomena in
the society.
Economics studies the way in the societies solve the
fundamental problems of reconciling the unlimited
desires of individuals with scarcity of resources,
susceptible to numerous alternative uses.

3. Economics is also an APPLIED SCIENCE because it
uses the scientific method in its explanations, which
consists of observing reality and presenting questions
and problems to arrive at the formulation of theories and
models.
As an applied science, it follows a systematic procedure
to solve issues and problems of the society.

4. THE FIELDS OF ECONOMICS:
1. Microeconomics: focuses on the behavior of individual economic
units and the functioning of markets. Its perspective focuses on parts
of the economy: individuals, firms, and industries.
2. Macroeconomics: studies the functioning of economics as an
aggregate (production, employment). Its perspective looks at the
economy as a whole, focusing on goals like production, the standard of
living, unemployment and inflation.
Macroeconomics has two types of policies for pursuing these goals:
monetary policy and fiscal policy.

6. The Economic Agents/Stakeholders:
1. Consumers
• Consume goods and services /offer production factors
• Maximize utility
2. Producers
• Produce goods / demand productive factors
• Maximize profit
3. The public sectors
• Attempt to maximize the well-being of society

7. The agents interact among themselves in a specific
territorial, social, natural and/or cultural framework that
determines their relationships → Market
Agents Interactions Market

8. GOODS
Satisfaction
It is anything used to satisfy your wants and needs.

9. TANGIBLE GOODS
material
goods or commodities.
INTANGIBLE GOODS
when they are
in the form of services. Those
rendered by doctors, engineers,
doctors and other professionals

10. Goods may also be classified according to use.

12. ECONOMIC RESOURCES OR FACTORS
economic resources
factors of production for goods and services.
The factors of production are inputs combinations in the
production of goods and services to make an economic profit
for the firms.
These factors of production are land,labor, capital, and
entrepreneurship.

15. Scarce resources and unlimited desires → Scarcity
Scarcity and alternative uses → Choice
Choice → Opportunity cost
Characteristics of Resources: