APECO 084
UNIT I : INTRODUCTION TO ECONOMICS
ECONOMICS
● social science that deals w the
efficient and effective allocation of
limited resources of government,
businesses, and individuals
microeconomics - firms (businesses) and
individuals (consumers) (households)
macroeconomics - larger scale
[pandemic, inflation]
ECONOMICS AS:
social science - principles in economics
which analyze how people create and
execute choices in distributing limited
resources for the satisfaction of limitless
wants and needs based on their social
behaviors
applied science - use of economic
concepts and theories snd their
application in real life scenarios &
conditions
● attempt to forecast the results of
utilizing these concepts given
different conditions in the market
● the use of scientific method
applied economics - economic principles,
theories, and its application in real events
and an attempt to forecast whatever the
outcomes
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SCARCITY
state of being short on resources in order
to satisfy the limitless needs and desires
of a citizen
● RELATIVE - resources that are
limited to satisfy infinite demand
● ABSOLUTE - when resources are
short in supply - no solution
needs - something you must have in
order for u to survive
wants - something we desire but
unimportant in daily life
opportunity cost - f​​oregone benefit or
value that would have been obtained by
choosing an alternative over another
ECONOMIC RESOURCES/FACTORS
● land
● labor
● capital
● entrepreneur
ECONOMIC QUESTIONS
● what to produce?
● how much?
● how to produce?
● for whom to produce?
APECO 084
UNIT I : INTRODUCTION TO ECONOMICS
ECONOMIC SYSTEM
● model that a country adapts with
regards to their economic practices
● foundation of their economic
activity
1. traditional economy
● tradition is the model in
executing economic choices
including manners or
methods of producing,
allocating, and distributing
products like goods and
services
● third-world countries adapt
this system
● no money involved
2. command economy
● basic economic problems
are weighted on the
shoulders of the
government
● market will not decide on its
own
● decision will come solely
from the government
● socialist or communist
system
3. market economy “laissez-faire”
● choices on what, how,
whom to produce is weigh
on the shoulders of the
consumers and producers
● no government involved to
decide on their welfare
4. mixed economy
● combination of free market
and the command economy
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10 ECONOMIC PRINCIPLES
1. people face trade-offs
● Dilemma
2. the cost of something is what you
give up to get it
● opportunity cost
3. rational people think at the
marginal
● incremental change
4. people respond to incentives
● for the benefit/s
5. trade can make everyone better
off
● generates economic activity
through exportation and
importation
6. markets are usually a good way
to organize economic activity
● since there is an interaction,
it can help consumers to
choose
7. governments can sometimes
improve economic outcomes
● price freeze (state of
calamity)
● cigarettes (high price =
helps the health of smokers)
● red onion (lack of supply =
imports from foreign
countries)
8. the country’s standard of living
depends on its ability to produce
goods and services
● education
● government should invest
on students for their
economic plan
APECO 084
UNIT I : INTRODUCTION TO ECONOMICS

9. prices rise when government

prints too much money
● more money = more
spending = high price/high
demand = lack of
supply/inflation

10. society faces a short-run

trade-off between inflation and
unemployment
● no matter how much you
increase the prices of your
products, consumers will
still buy it

WHY STUDY ECONOMICS

● to learn a way of thinking

● to understand society
● to understand global affairs
● to be an informed citizen

civically competent - very aware of what is

happening around you and be able to
partake accordingly

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