Introduction to Economics

1. INTRODUCTION TO ECONOMICS
- Is the social science that involves
the use of scare resources to
satisfy unlimited wants.
- Scarcity is a condition where
there are insufficient resources to
satisfy all the needs and wants of
a population.

2. - AS A SOCIAL SCIENCE, ECONOMICS
STUDIES HOW INDIVIDUALS MAKE
CHOICES IN ALLOCATING SCARE
RESOURCES TO SATISFY THEIR
UNLIMITED WANTS.

3. SCARCITY
 Relative scarcity – is when a good is
scare compared to its demand.
example: coconuts are abundant in the
Philippines since the plant easily grows in
our soil and climate. However, coconuts
become scare when the supply is not
sufficient to meet the needs of the people.
-Because of circumstances

4. ABSOLUTE SCARCITY – IS WHEN SUPPLY
IS LIMITED.
OIL IS ABSOLUTELY SCARE IN THE
COUNTRY SINCE WE HAVE NO OIL WELLS
FROM WHICH WE CAN SOURCE OUR
PETROLEUM NEEDS, SO WE RELY
HEAVILY ON IMPORTS FROM OIL-
PRODUCING COUNTRIES LIKE IRAN AND
OTHER MIDDLE EASTERN COUNTRIES.

5. ECONOMIC RESOURCES –
known as factors of
production, are the
resources used to
produce goods and
services.

6. Land – soil and natural resources
that are found in nature and are
made. Receive a payment known
as rent.
Labor – physical and human effort
exerted in production.
Capital – man-made resources
used in the production of goods and
services, which include machineries
and equipment.

7. TWO BRANCHES OF ECONOMICS
 Macroeconomics is a division of
economics that is concerned with the
overall performance of the entire
economy.
- Overflow of goods and resources
- Flow of money
- Economic growth
- National income

8. MICROECONOMICS
Concerned with the
behaviour of individuals
entities such as the
consumer, the producer,
and the resource owner.

9. BASIC ECONOMIC PROBLEMS OF SOCIETY
What to produce and how much
How to produce
For whom to produce

10. WHY ECONOMICS IS IMPORTANT
 Will help the students understand why there
is a need for everybody, including the
government, to budget and properly allocate
the use of whatever resources are available.
 It will help one understand how to make
rational decisions in spending money, saving
part of it, and even investing some of it.

11. Enable to take a look on how the
economy operates and to decide
for themselves if the government
officials and leaders are effective
in trying to shape up the
economy and formulate policies
for the good of the nation.