Economics

1. APPLIEDECONOMICS ABM 12 : 2:00PM-3:00PM

2. LEARNING OBJECTIVES:
-Define Economics
-Identify economics as an applied and social
science
-Answer basic economic questions
-Identify the factors of production
-Understand the importance of the production
possibilities frontier

3. ECONOMICS
- Allocation of the scare
means of production
toward the satisfaction of
human needs and wants.

4. ECONOMICS
-Comes from the Greek words: OIKOS
which means “household” and NOMUS,
means “system or management”.
OIKONOMIA OR OIKONOMUS, therefore,
means the “management of household.

5. ECONOMICS
- It is a considered the queen of all
social sciences. Because it covers
almost every activity of an individual
in relation to society.

6. RELATIONSHIP OF ECONOMICS TO
OTHER SCIENCES
1. Business management
2. History
3. Finance
4. Physics
5. Sociology
6. Psychology

7. BUSINESS MANAGEMENT
- Provides employment opportunities to
member of the society.
- Balance of economic activity.

8. HISTORY
- Provides information regarding
theories that can be revisited in
order to evaluate present and
future economics issues.

9. FINANCE
- Defined as the management of money,
credit, banking, and investment.
- It is the system that includes the circulation
of money, credit and investment decisions
and provision of banking facilities.

10. PHYSICS
- Innovations and output brought
about by physics greatly affect
the study of economics.

11. SOCIOLOGY
- The study of the behavior of
societies.
- Economics, in relation to sociology,
essentially deals with the behavior of
society.

12. PSYCHOLOGY
- Is the study of human behavior.
- It is primarily useful in the study of
MICROECONOMICS focuses in the smallest
unit of the economy.

13. EN
D

14. SCARCITY: The Central Problem
of Economics

15. SCARCITY
- Is the basic and central
economic problem confronting
every person and society.

16. SCARCITY
- It is at the heart of the
study of economics and
the reason why you are
studying it now.

17. SCARCITY
- Dictionary of Economics
defines scarcity as a
commodity or service being in
short supply, relative to its
demand.

18. PROBLEM OF SCARCITY
LIMITED
RESOURCES
UNLIMITED
WANTS
SCARCITY

19. NOTE!!!
- If the scarcity does not exist, there is no
need for us to economize.
- But since we know that our resources are
limited and we cannot produce all the goods
and services we want to have, then there is a
need for us to properly allocate resources so
that we can produce goods and services that
will maximize our satisfaction.

20. EN
D

21. ECONOMICS
LIMITED
RESOURCES
UNLIMITED
WANTS
ALLOCATION

22. ECONOMICS
MICROECONOMICS
- is the branch of
economics that deals
with individual
decisions of the units
of the economy
MACROECONOMICS
- Is the branch of economics
that studies the relationship
among broad economic
aggregates like national
income, national output,
money supply, bank deposits,
total volume of savings,and
investments.

23. MICROECONOMICS
- Operates on the level
of the individual business
firm, as well as that of
the individual consumer.

24. MACROECONOMI
CS
- It is focuses on the four sectors of the economy.
- The behavior of the aggregate household
(consumption)
- The decision-making of the aggregate business
( investment)
- The policies and projects of the government
(government spending)

25. MACROECONOMICS
- discusses the measurement of the Gross
National Product –NGP and Gross Domestic
Product –GDP
- the business cycle

26. THE FIVE (5) MACROECONOMIC
GOALS
General Price Level
Economic Growth and
Development
Money and Financial
Markets
Monetary and Fiscal
Policies
Employment

27. BASIC ECONOMIC
QUESTIONS

28. What to Produce?
How to Produce?

29. How Much to
Produce?
For Whom to
Produce?

30. FACTORS OF
PRODUCTION
Four Economic
resources serve as
input in the
production
process.

31. FACTORS OF PRODUCTION
CAPITAL ENTREPRENEURS
HIP
LAND LABOR