Economics-from Greek word
oikonomia (oikos and nemein ),
means management of household
Inductive- specific to general
Deductive- general to specific
1. Bernardo M. Villegas-human
and nonhuman resources
2. Tereso S. Tullao Jr.-study of
scarce resources
3. Gerardo P. Sicat-study of
opportunities and obstacles
4. Roger Le Roy Miller-how to use
limited resources
5. Thomas J. Hailstones-
production, distribution and
consumption of goods and
services
6. Paul Wonnacott and Ronald
Wonnacott-how people make
their living, how they acquire
material necessities(food, shelter
and clothes)
7. Alfred Marshall-business of life
Scarcity-human needs are unlimited
and resources are limited
Relative Scarcity-one may lack some
resources but could have plenty of
others
The Economic Problem of Choice
Trade-off-the alternatives chosen for
a particular use of a resource
Opportunity Cost- the next/second
best alternative use of a resource
Allocation-the process of choosing
among competing ends
Production Possibilities Curve-shows
the various possible combinations of
two goods that the economy can
produce given a limited amount of
resources and a certain level of
technology
The Scope of Economics
Description-definition or meaning
Analysis-evaluation (why/how)
Explanation-explain the findings if it is
good or bad
Prediction-predicting outcomes
The Concerns of Economics
What to Produce- producers must
know what the people need
How to Produce-process of
production
Labor-intensive-if society has a
surplus of supply of manpower
Capital-intensive-if society is rich in
resources
How Much to Produce-producers
must know the amount they should
produce to avoid wasting resources
For Whom to Produce-for consumers
on the market (rich and poor)
How to Produce More Over Time- the
process on how to produce more and
improve the product to sustain the
needs and wants of people
Economics and Other Disciplines
Economics uses: Mathematics—
arithmetic, statistics, geometry and
algebra(quantitative)
Principles of philosophy, logic and Alfred Marshall-father of
theology—in making logical, moral microeconomics
and socially acceptable decisions
Politics-government to formulate
programs, policies and laws
History-to avoid repeating the
mistakes of the past
Chemistry, physics and biology-for
discoveries and inventions (scientific
method)
The Importance of Studying
Economics
-people acquire proper skills and
knowledge on how to deal with
scarcity
-helps people understand the
functions of economy and their roles
in the wealth-creating process
-provides people with countless
opportunities to make their lives
better
-broadens the people’s perspective of
the society
-importance of caring for the
environment
Divisions of Economics
Microeconomics-economic behavior
and decisions made by small units of
the economy
Macroeconomics-activities and
decisions made by large economic
units
John Maynard Keynes- father of
macroeconomics; The General Theory
of Employment, Interest and money
(1936) –Keynesian economics