MANAGERIAL

ECONOMICS
E C O N 1 2 4
E D P C O D E 1 0 5 7 9
6 : 3 1 - 8 : 3 1 M W
R O O M 2 3 3

PREPARED BY: Agnes D. Ysulan, MBA, LPT

Agnes D. Ysulan, MBA,LPT
Instructor
Index

01 The Economic Way 06 Market Structures

of Thinking
02 Demand & Supply 07 Measuring National
Income
03 Elasticity & Its Applications 08 Money & Monetary
Policy
04 Consumer Behavior 09 Basic Finance

05 Revenue & the Cost of 10 Fiscal Policy & Public

Production Expenditures
The Economic Way of
Thinking
When you heard about
economics what comes
into your mind?

What is your own

definition of an
economy?
Economy

an organizational mechanism by
which goods and services are
produced, sold, and bought in a
county or region.
study of how society manages its
scarce resources.
concerned with the efficient or
effective allocation of scarce
resources to achieve maximum
satisfaction or wants.
To have intuitive knowledge in economics, we have to answer
four basic questions:
Is economics a
science?
How do economics
allocate resources?

What is scarcity?
Is it possible to achieve
maximum satisfaction or
wants
Learning Objectives
At the end of this chapter, the
student should be able to:

explain the concepts of

economics and the economy
identify the way economists
think
differentiate the branches
and methodologies of
economics and
identify the components of
the basic circular flow in an
economy.
Is Economics a Science?

Natural Social
Robust black
Science Science
markets
HOW DO ECONOMIST ALLOCATE RESOURCES?

EFFICIENCY
attaining maximum
output with least
possible input.

EFFECTIVENESS

can be attained by
getting the desired
outcome.
What is Scarcity?
the condition where
wants and needs of
people are not satisfied
because of limited
resources.
one of the main reasons
why economists exist
Examples:
After poor weather, corn
crops did not grow
resulting in a scarcity of
food for people and
animals and ethanol for
fuel.
Fewer local farmers
raising cattle can result
in a scarcity of milk and
cheese.
Overfishing can result in
a scarcity of a type of
fish.
Examples:

A wildfire temporarily causes

pollution in a city, leading to a
scarcity of clean air.
A day has an absolute scarcity of
time, as you cannot add more
than 24 hours to its supply.
Those without access to clean
water experience a scarcity of
water.
An avian flu wipes out millions of
chickens, creating a scarcity of
eggs.
Is it possible to achieve maximum
satisfaction or wants?

If all things are

managed well,
we can achieve
maximum
satisfaction or
want.
The Economic Way of Thinking

There are many ways to depict

how economists think, but this
textbook work to describe it in
three applicable ways:

1. Decision-making during
scarcity
2. Rational behavior
3. Marginal analysis
1. In a world of scarcity, most of
the things we do would
require us to make choices.

Because resources are

limited, decision-makers
should decide what to have or
what to forgo.
Example

There is no such thing as

free lunch
The clamor for a hike in
train fare in Metro Manila
OPPORTUNITY COST

Cost we forego to getting

something else.
1. the cost of that which you get is the
value of which is sacrificed to
contain it.
2. RATIONAL BEHAVIOR

in economics, one of the assumptions

we always acknowledge is that human
behavior reflects " rational self-
interest".

Individuals would always find a way to

increase their utiltiy.
3. Marginal Analysis

Before we choose a certain

alternative, we often ask
ourselves if this will be
"beneficial or not" or should
we pursue this action or not."