Revisiting economics as a social science

1. 1. Revisiting Economics as a Social Science Lesson 1 Applied Economics

2. 2. Specific Objectives 1. Define economics 2. Determine the importance of economics 3.
Describe the nature of economics
3. 3. Economics Study of what constitutes rational human behavior in the endeavor to fulfill
needs and wants Understanding how society allocates its scarce resources Almost
always, human activities involve economics
4. 4. OF ECONOMICS FROM DIFFERENT PERSPECTIVES
5. 5. 1. Fajardo 2. Nordhaus Economics – is the proper allocation and efficient use of available
resources for the maximum satisfaction of human wants Economics – is the science of
choice. It studies how people choose to use scarce resources to produce various
commodities
6. 6. 3. Sicat 2. Webster Economics – is a scientific study which deals with how individuals and
society may general choices Economics – branch of knowledge that deals with production,
distribution and consumption of goods and services
7. 7. ECONOMICS IN A PROCESS Unlimited wants Scarcity Make Choices
8. 8. Economic activities Earning money Buying goods and services Depositing and
withdrawing money in bank
9. 9. Economics from “Oikanomia” Household Management
10. 10. Science Social Science Economics
11. 11. Economics is classified as a social science because it deals with the study of human’s
life and how he lives with other men.
12. 12. ECONOMICS Macroeconomics Microeconomics
13. 13. Macroeconomics  Deals with the economic behavior of the whole economy or its
aggregates (composed of individual units) AGGREGATES Business Government
Households
14. 14. Macroeconomics Discusses the following: - Gross national product - Level of
employment - National income - General level of prices “EMPLOYMENT AND INCOME
ANALYSIS”
15. 15. Microeconomics Deals with the economic behavior of individual units such as:
Consumers Firms Landowners
16. 16. Microeconomics  Discusses the following: - Price of rice - Number of workers in a
certain firm - Income of Mr. Fu - Expenditures of PLDT “PRICE THEORY”
17. 17. Divisions of Economics Production Distribution ExchangeConsumption Public Finance
18. 18. Divisions of Economics 1. Production – refers to the process of producing or creating
goods needed by the households to satisfy their needs Factors of production – inputs Goods
and services – outputs Factors of Production
19. 19. Goods
20. 20. Services
21. 21. Divisions of Economics 1. Production – refers to the process of producing or creating
goods needed by the households to satisfy their needs Factors of production – inputs Goods
and services – outputs 2. Distribution – refers to the marketing of goods and services to
different economic outlets 3. Exchange – refers to the process of transferring goods and
services to a person in return for something present medium of exchange - money
22. 22. Divisions of Economics 4. Consumption – refers to the proper utilization of economic
goods. However, goods and services could not be utilized unless you pay for it. Hence,
consumption could also be spending money for goods and services 5. Public Finance –
pertains to the activities of the government regarding taxation, borrowings and expenditures.
It deals with the efficient use and fair distribution of public resources.
23. 23. ECONOMIC RESOURCES Factors of production or inputs Land Entrepreneurs Labor
Capital Foreign exchange
24. 24. 1. Land These resources consist of free gifts of nature which includes: - soil - rivers -
lakes, oceans - forests - mountains - mineral resources
25. 25. 1. Land Land is considered an economic resource because it has a price attached to it. *
we usually pay for it through rent or lease Land is a limited resource. Physical land is a fixed
resource.
26. 26. 2. Labor Also called “human resources” Labor- refers to all human efforts, be it mental or
physical, that help to produce satisfying goods and services In return, he earns an income in
forms of wages and salaries
27. 27. 2. Labor Labor is a flexible factor of production - workers can be allocated to different
areas of the economy for producing goods and services
28. 28. 3. Capital Two economic definitions of capital: a. Capital – can represent the monetary
resources use to purchase natural resources Ex: Companies use capital to buy land and
other goods
29. 29. 3. Capital Two economic definitions of capital: b. Capital – represents the major physical
assets individuals and companies use when producing goods and services Ex: buildings,
vehicles, equipments Income derived from capital is interest
30. 30. 4. Entrepreneurs French word which means “enterpriser” Entrepreneur – organizer and
coordinator of other factors of production: land, labor and capital. He uses his initiative, talent
and resourcefulness to create economic goods.
31. 31. 5. Foreign Exchange Refers to the dollar and dollar reserves that the economy has.
Foreign exchange is part of economic resources because we need foreign currency for
international trading and buying materials from other countries International medium - dollar
32. 32. QUIZ
33. 33. LET’S TEST OURSELVES! 1. Economics is derived from the Greek word “oikanomia”
meaning: a. Economic management b. Household management c. Social management 1
point
34. 34. LET’S TEST OURSELVES! 2. Economics is a social science because it deals with: a.
Human nature b. Natural resources c. Experimentation 1 point
35. 35. LET’S TEST OURSELVES! 3. Scarcity of resources means: a. minimum resources b.
excess resources c. shortage of resources d. no resources 1 point
36. 36. LET’S TEST OURSELVES! 4. These are examples of human wants except: a.
smartphone b. perfume c. watch d. clothing 1 point
37. 37. LET’S TEST OURSELVES! 5. Give your definition of economics 2 points
38. 38. Identify what type of economics (Macro or Micro) discusses the ff: 1. Gross National
Product 2. Price of bananas 3. Profits of Bread and Butter 4. Employment 1 point per item