Why Study

Microeconomics?
Module 1, Session 1
JAIRUS JOHN M. GOCHUCO
Part-time Instructor, XU-SBM

December 15, 2020

 Session
Objectives:

After attending this session, you will

be able to:

Get familiar with the course Grading System;

Contrast the two main branches of economics –
microeconomics and macroeconomics;
Enumerate the questions that must be answered by every society of
any market system before allocating scarce resources.
 Final Grade Computation:
📚 Final Exam --------------------------------- 30%
👨💻 Class Participation/Activities ---------- 14%
GRADING SYSTEM 🗂 Projects ------------------------------------- 14%
📝 Quizzes -------------------------------------- 10.50%
📚 Midterm Exam ----------------------------- 10.50%
📘 Prelim Exam/Output ----------------------- 7%
📗 Semi Final Exam/Output ------------------ 7%
📨 Assignment/Seatwork ---------------- 7% _
TOTAL ----------------------------------------- 100%

4
 HUMAN BEINGS HAVE
UNLIMITED WANTS
If you agree with this statement,
pop-up a thumbs-up reaction
👍

THE WORLD HAS

LIMITED RESOURCES
-------------
⚠⚠
Economics is the
science that deals
with the allocation of
limited resources to
satisfy unlimited
human wants.
The scarcity of
resources means
that we are
constrained in the
choices we can
make about the
goods and services
Which is why
economics is often
described as the
science of
constrained choice
What is Constrained
Choice?

Constrained choice occurs

when an economic agent must
determine the optimal
combination of choice variables
(given some relationship
between combinations of those
variables and payoffs) in the
face of a constraint limiting the
set of feasible combinations for
those variables available to the
agent.
THE TWO BRANCHES
OF ECONOMICS

Prefix Greek Word Meaning

Micro Mikros Small

Macro Makros Large
MICROECONOMICS
• studies the economic behavior of
individual economic decision makers,
such as a consumer, a worker, a firm,
or a manager. It also analyzes the
behavior of individual households,
industries, markets, labor unions, or
trade associations

11
MACROECONOMICS
• Analyzes how an entire national
economy performs. A course in
macroeconomics would examine
aggregate levels of income and
employment, the levels of interest
rates and prices, the rate of inflation,
and the nature of business cycles in a
national economy

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Activity No. 1:

Identify whether the

following statement is
more related to
Microeconomics or
Macroeconomics.

13
 Britain has suffered brain
“ drain in recent years
14
“ When I was a college student, my
daily allowance was 20 pesos
15
 Among all the burgers, I
“ like Yumburger.
16
 The opportunity cost of taking a
“ vacation instead of spending the money
on a new car, is not getting a new car.
17
“ A levy is a legal seizure of your
property to satisfy a tax debt.
18
“ Cagayan de Oro City recently
shortened its curfew hours
19
“ The president has proposed a
25% tariff on all imported automobiles
20
“ Ms. Lee received her 13-month pay
bonus. She is deciding whether she
should buy a pet cat or dog. 21
“ Today is a Holiday. Arthur is
contemplating if he should make his
project or play Mobile Legends. 22
“ Today is a Holiday. Arthur is
contemplating if he should make his
project or play Mobile Legends. 23
 A sunk cost is an irretrievable cost,

“ something we cannot get back. Tuition fees

are sunk cost, after a certain amount of
time.
24
Regardless of its market
system, every society must
answer these questions:
• What goods and services will
be produced, and in what
quantities?

• Who will produce the goods

and services, and how?

• Who will receive the goods

and services?
25
 Microeconomic analysis
attempts to answer these
questions by studying the
“ behavior of individual
economic units. By answering
questions about how
consumers and producers
behave, microeconomics
helps us understand the pieces
that collectively make up a
model of an entire economy.
26
THANK YOU!
JAIRUS JOHN M. GOCHUCO

09177713338

jgochuco@xu.edu.ph

elearn.xu.edu.ph