OOFD

Many people are

not able to eat
enough in a day
because of the
lockdowns during
the pandemic.
 OMNYE

People are having a

problem on saving
money due to Inflation
or increase in the price
level of goods and
services.
ERTAW
Global warming has
caused water
resources in some
areas to run-short
of.
• What decisions have you
made since waking up
this morning?
• Did you choose to get up
as soon as the alarm
went off or to sleep some
more?
• Did you wonder what to
do after school today?
 Everybody goes through a day faced
with constraints or limitations: motorists
complain of high gasoline prices, times
when people suffer due to a shortage of
chicken in the market, or insufficient
allowance for a student who needs to
buy books and school supplies.
• People always complain about not having enough-
not enough food on the table, not enough money to
pay one’s debts, or not enough income to meet all
the family’s needs. This, in effect, is the existence of
what we call scarcity, that is, insufficiency of
resources to meet the wants of consumers and
insufficiency of resources for producers that hamper
enough production of goods and services. Scarcity is
the reason why people have to practice economics
 Because of the presence of
scarcity, there is a need for
man to make decisions in
choosing how to maximize the
use of the scarce resources to
satisfy as many wants as
possible
 WHAT IS
ECONOMICS?
ECONOMICS
• is from the Greek words oikos which means
household or family and nonos meaning
management.
• During the ancient times, family is the most
observed organization.
• Oikonomos includes the management of wealth and
customs of the family which later on form part of the
society.
Adam Smith (1723-90)
• a Scottish economist and father of the classical
economics, economics is concerned on the
production and distribution of wealth.
• The production and distribution of wealth will
happen in a market economy which the ‘invisible
hand’ is taking in-charge. This mechanism is like
there are unseen forces who control the activities
in the market.
Alfred Marshall (1842-1924)
• defines economics as a study of human as they live
and move and think in the ordinary business of life. He
emphasized the importance of human involvement and
interaction.
• He claimed that, “Economics is a study of mankind in
the ordinary business of life; it examines that part of
individual and social action which is most closely
connected with the attainment and with the use of the
material requisites of well-being.”
• For him, wealth is not the end but the human welfare.
Lionel Robbins (1898- 1984
• “Economics is the science which studies human behaviour as a
relationship between ends and scarce means which have alternative
uses”.
• He linked the word “scarcity and human behavior”. Human welfare
would be attained if there are proper usage of resources and
alternatives. In reality we have unlimited wants and unending
satisfaction. It can multiply and most of the time is changing. The means
or resources are limited in nature reason why we are suffering from
scarcity and insufficiency.
• Human choice and activities are the main factors why there is scarcity
so basically the main focus of economics is making choices. Thus,
economics deals with the efficient use of scarce resources to satisfy the
unlimited wants of the society.
Economics as a Social Science
Economics is a social
science because it studies
human behavior just like
psychology and sociology.
 As a Social Science,
economics studies how
individuals make choices in
allocating scarce resources
to satisfy their unlimited
wants.
 Economics as a Social
Science, it concerned with
using scarce resources to
obtain the maximum of the
unlimited wants of society.
Economics as a Social Science
- is a social science that focuses on
the production, distribution, and
consumption of goods and services,
and analyzes the choices that
individuals, businesses,
governments, and nations make to
allocate resources.
• Economics is a social science. This
means that economics has two important
attributes. Economics studies human
activities and constructions in
environments with scarce resources
and uses the scientific method and
empirical evidence to build its base of
knowledge.
Economics as Applied Science
The use of this term is believed
to have started nearly 200 years
ago, in the writings of Jean-
Baptiste Say (1767-1832) and John
Stuart Mill (1806-1873).
Economics as Applied Science
It is the application of economic
theories and models in real life. It
consists of learning how choices affect
individual decision-making and how the
availability of factors aid decision
makers craft sound judgement.
• Applied economics is the application of core theoretical
economics and econometrics to answer questions in a wide
range of fields (Reynold, 2020). Meaning to say, applied
economics is a tool to help solve a certain real world problem
based on the economic theories. Applied economists can apply
core economic models to make predictions.
• For example, there will be a price drop in petroleum products in
the succeeding months, according to the law of demand—as
price decreases, quantity demanded increases, and people will
tend to buy more cars in the future. Policy makers must further
analyze this situation because it may worsen the traffic or
additional transportation crime incident related will be recorded.
 Applied Economics is the study
of observing how theories work in
practice. The discipline may be
practiced at the two branches of
economics in terms of scope -
macroeconomic or microeconomic
levels.
Microeconomics - examines the
behavior of individual entities such
as the consumer, the producer, and
the resource owner or firms within
the market. It studies how
individual consumers and firms
make decisions to allocate
resources.
Macroeconomics - is the branch of economics
that studies the behavior and performance of an
economy as a whole. Its primary focus is the
recurrent economic cycles and broad economic
growth and development. It focuses on foreign
trade, government fiscal and monetary policy,
unemployment rates, the level of inflation,
interest rates, the growth of total production
output, and business cycles that result in
expansions, booms, recessions, and
depressions.
 If there is a central economic problem that is
present across all countries, without any exception,
then it is the problem of scarcity. This problem arises
because the resources of all types are limited and
have alternative uses. If the resources were unlimited
or if a resource only had one single use, then the
economic problem would probably not arise. However,
be it natural productive resources or man-made
capital/consumer goods or money or time, scarcity of
resources is the central problem.
ECONOMIC
RESOURCES
What are Economic Resources?
Economic resources, also known as
factors of production, are the resources
used to produce goods and services.
These resources are, by nature, limited and
therefore,command a payment that
becomes the income of the resource
owner.
Land -These resources consist of free gifts of
nature which includes all natural resources
above, on, and below the ground such as soil,
rivers, lakes, oceans, forests, mountains, and
mineral resources. Land is considered economic
resources because it has a price attached to it.
One cannot utilize this natural resource without
paying for it usually in the form of rent or lease.
Labor -This is also termed as human resources.
Labor refers to all human efforts, be it mental or
physical, that help to produce want satisfying
goods and services. This applies not only to
workers, farmers or laborers, but also to
professionals like accountants, economists or
scientists. Labor is an indispensable factor in the
production of goods and services. In return, he
earns an income in the form of wages and/or
salaries.
Capital - this represents physical
assets such as production facilities,
warehouses, equipment, and
technology used in the production of
goods and services. The term may
also refer to investment capital used
in production. The factor income for
capital is interest.
Entrepreneur - An entrepreneur is the
organizer and coordinator of the other factors of
production: land, labor, and capital. An
entrepreneur is one who is engaged in economic
undertakings and provides society with goods
and services it needs. He utilizes his initiative,
talent and resourcefulness in the creation of
economic goods. He is able to compensate
himself through the acquisition of profits.