The essence of

Economics
Julsar T. Calonia
Why do we need
to study
economics?

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Click
me

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 Man’s activity, since time immemorial, has been
devoted to work for his survival – In primitive times,
this effort was spent primarily for the protection of their
lives – Consciously or unconsciously, they have been
working for basic needs commensurate to their
lifestyle

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Rationale of Study
Education is an ongoing process to
keep its pace with modern times •
Researches have been conducted
that have led to technological
advancement • Man is no longer
contented to live a simple lifestyle
but he still has to cope with the
demands of the time • To respond to
this need, man should become
economically oriented with his
ways.

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 • Stresses that Economics is the:
– Study of wealth
– Study of how to go about the
Cristobal M. Pagoso business of organizing
consumption and production
Philippine activities
Economics, 1989 • – Study on how to improve
Stresses that society and make human
civilization possible
Economics is the: – Study of ordinary life, earning
and enjoying a living – Study of
how people choose to use scarce
resources or limited productive
resources to produce various
commodities and how to
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 Stressed that economics:
– Asks what goods are produced, how
these goods are produced and for
Paul A. whom they are produced
– Analyses movement in the overall
Samuelson economy
Economics – Studies commerce among nations. It
help explain why nations export and
1993 import goods as well as the effects of
putting barriers at national frontiers
– Is the science of choice and it helps
people choose. It also explains hot to
use scarce or limited productive
resources and distribute theses goods
for consumption
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Economics
“How societies use scarce resources to
produce commodities and distribute them
among different people.”

“the efficient allocation of

scarce
resources.

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GROUP ACTIVITY
DEBATE
SCARCITY
RESOURCE
S VS NO
SCARCITY
(ABUNDAN 9
Vital points
b. Scarcity
-if everything is abundant, the price is zero
and there is no need for allocation and no
such a thing as Economic Goods (i.e.
Economics becomes useless!)
b. Efficiency
-when resources are used in such a way that
people can get as much as they can get
(specific to their wants and needs)

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Resources
This resources are called the
factors of production
Generally classified
1. Land-cover all natural resources that
exist without man’s intervention
2. Labor- refer to human inputs such as
manpower and skills that are in
transforming resources into different
products
3. Capital- man made factor of production
to use to create another product
4. Entrepreneurship- integrates land, labor
and capital to create a product 11
 Make the existence of Scarcity is the unlimited wants and
needs
Needs Wants

• Are things we cannot live • Are the non-essential thing

without that can live without.
• Water, foods, and shelter which
is essential for man’s survival

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 Factors that affecting Human
wants

1.Increase in population

2.Changing taste and

preference

3.Income

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 Scope of Economics
Microeconomics deals with the
economics of the firms.

Macroeconomics deals with

aggregates. its scope is wider
studies the entirely of an
economy, weather national or
international, and attempts
economic changes
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The Methods of Economics

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Positive
economic Simply
analysis
describes what
exists and how
things work.

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Normative
Economic Which looks at
analysis the outcome of
economic
behavior
through
judgments and
prescription
for course of
action. 17
 Theories and
Models

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Theories are proposition
about certain related
variables that scientifically
explain a certain
phenomena.
Ex. PopulationTheory of
Thomas Malthus
scrutinizing food and
population
Models are use to illustrate,
demonstrate, and present a
theory or parts of it
(Baumol, 2009).
 Fallacies in
making Models
andTheories
It is fallacy related two
events as if the first event
causes the second one to
happened. It is commonly The post hoc
constructed in form: ergo propter hoc
fallacy
A occurred immediately
before B. therefore A cause
be.
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When you generalizing
events as if they were all
the same and all the Failure to hold
results were predictable other things
Ceteris paribus meaning constant under
all things being equal or the ceteris
held constant. paribus
assumption
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What is that
what is true for
a component is
also true for the The fallacy of
entire thing.
composition

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The economic
systems and the
Economic
ThankYou
April Hansson
+1 23 987 6554
april@www.proseware.com
www.proseware.com
Economic
System and the
Basic economic
questions
Scarcity necessitates the proper
allocation of resources to meet
people’s unlimited wants.
This process of allocation answers
three economic questions
1. What to produce?
2. How to produce?
3. For whom to produce?
What to produce?
“A society determines the kind
and quantity of products it will
produce depending on what the
consumers want to buy or willing
to buy.”
How to Produce?
“a society who decide who will produce
goods and what process of production
will be use.

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For whom to produce?
“revolves around the issues of
who will benefit from the
goods and service produce.

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Society’s
Economic
System

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Economic System is characterized by the
type of institutions responsible for the
management and allocation of resources
used in the production of goods and
services.

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Kind of economic system
1. Market economic system
2. Command Economic system
3. Mixed economic system

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Market Economic system where these
three questions are respectively
answered by:
1. Producing at constant returns to
scale with minimum costs
2. Distributing the goods to those who
can afford to by them.

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Command Economic System is
where all resources are owned
by the government
What to produce- producing
more public goods like schools,
roads, health center
How to produce- employing all
possible labors and using
available
To whom to produce- producing
for the public 36
Mixed economic system is where all
three question are answered by both
the government and private entities in
consideration of their mutual benefits.

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OPPURTUNITY
COST AND
TRADE OFF
Opportunity cost – refer the
cost of giving up an
alternative by selecting the
next best choice.
Trade –off when we have to
give up in order to get
another.
Production
Possibility Frontier
and Opportunity
cost.
 Production possibility
frontier or PPF – is a
graph shows the greatest
sum of output given the
accessible inputs, or
factors of production, in
an economy.
 Group Activity
Think a market place (likeValencia,
Maramag, Malaybalay or even anywhere)
that you think you can build your own
businesses.
Insert or Drag & Drop Photo

Try to the approached using the three

economic questions.

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THANKYOU….