ECONOMICS
decisions such as shaping policies regarding
 Economics is a social science that deals with the
allocation of scarce resources to satisfy human’s
unlimited wants and needs.
WHY IS ECONOMICS A / DEALS WITH:
1. Social Science
 Economist observes the economy by
gathering relevant data from households,
groceries, supermarkets and firms in the
locality and interprets such. Through the
scientific way of investigation (Identifying the
Problem, Formulating Hypothesis, Gather
Data, Analyze Data, Conclusion), an
economist organize his/her facts and
understand the problems of a community
which leads to an action or progress.
 Economics is “Social” because economist
deals with the society / people. Its central
subject is man and how he interacts with the
other elements of society.
2. Allocation
 Allocation is the proper distribution of
resources.
 Economist must determine how to distribute
the goods and services produced among
different groups of people.
 Prioritization.
3. Resources
 Resources are SCARCE – “kapos /
kakapusan”.
 Scarcity cannot be solved while shortage –
“kakulangan” can be solved.
 Resources are prolific meaning it has many
uses.
 Wise use of resources means that there is no
waste and conservation is done. Minimun cost
for maximum quality.
 Can either be Human, Natural, Physical,
Capital.
4. Human wants and needs
 Unlimited.
 Economics has 2 aims namely survival and
satisfaction.
IMPORTANCE
 Why is the study of economics important?
 An understanding of the basic concepts and
principles of economics will enable people to
understand the economic state of our country
during a season. Moreover, knowledge in
economics help the students or readers to
understand how the government make economic
taxation, borrowing money, minimum wage and
the such. It enables the government to come up
with the best ways to allocate the scarce resources
in our country to meet our wants and needs.
GROWTH and DEVELOPMENT
 Growth is measurable (physical). It can be seen.
 Development is felt by the people.
 Growth (Ex. The Philippines is now Rank #.....
and Makati City is the #1 City)
 Development (Ex. Filipinos notice that the
economy in the Philippines is doing a good job.
High salary.)
ECONOMICS IS RELATED TO:
1. Mathematics
 Equations, tables and graphs.
 Manipulate equations.
 Statistics and Percentages.
 Ex. About 17% of the cities in the Philippines
were affected by the drought and famine.
2. Physics, Chemistry, and Biology
 Advances enable the society to better manage
its resources through new processes.
 New equipment.
 Development in technology.
 Ex. Bone-scanners are more effective than
simple X-ray.
3. History
 Economics rely on historical data – economic
data.
 Formulate and evaluate theories
 Develop plans
 Ex. Last year 2001, the population of the
Philippines is 99999999999999 billion.
4. Sociology
 Understand the interaction among various
economic units.
 Evaluate types of social organization – how
they affect economic growth
 Ex. Youth for Christ organization participates
in giving relief goods.
5. Psychology
 How human , individuals, act or think
 How individuals make decisions.
 How people react
 Ex. The passage of RH Law agitated the pro-
life activists resulting to a rally.
 6. Ethics Social Needs
 Policy recommendations  Ex. Facebook. I will join organizations,
 Know what is acceptable and not acceptable groups, clubs. Can you be my friend?
 Value judgements to achieve economic goals
 Ex. Economists recommended the people to Esteem Needs
use unleaded gasoline , which has lower price  Ex. Congratulations !. Ilabyo X). You’re the
than the others, to prevent smoke belching. best.

7. Political Science Self – Actualization

 Relationship between the people and the  Ex. Graduated summa cum laude.
government
 How the government acts
 What the government pass / implies FACTORS AFFECTING CONSUMPTION -
 Ex. Graph and corruption in the local BVVIPAOS
government resulted to the economic
 Income – My family’s monthly income is 50k.
degration in XYZ City.
 Occasion – Valentine’s Day
SCARCITY  Advertisement – Sa Jollibee bida ang saya ! :D
 Prices – Price of bread = P1.00
 Limited Resources such as land, labor, capital and  Value – I’m very stingy.
entrepreneurship.  Seasons – Summer, Winter, Autumn / Fall, Spring
 Unlimited wants such as food, clothing, shelter,  Bandwagon Effect – They are wearing white, I
etc.. should wear white too.
 Veblen Effect – They are wearing white, I beg to
ALLOCATION differ. I will wear black.
 Mechanism of distributing resources in order to CHARACTERISTICS OF A CONSUMER - LABAN
solve society’s fundamental problems
 Production and Distribution  Analytical
 Looking for alternatives
3 MAJOR QUESTIONS  Budget conscious
 Avoiding panic buying
1. What to produce and in what quantity?
 Not affected by advertisement
 What are the available resources?
RIGHT OF CONSUMERS – CCPiSO
2. How to produce?
 Labor – Intensive technique  Right to choose
 More labourer ; Less capital resources  Right to proper information
 Higher salary of laborers  Right to have basic needs
 Salary = Labor  Right to security
 Right to organize
 Capital – Intensive technique  Right to a clean and orderly environment
 Capital > Laborer
 When ? Maximum output in a minimum RESOURCES
cost.
 Capital = Interest 1. Natural Resources
 Mineral Resources
3. For whom are those goods and services?  Land Resources
 Water Resources
ALLOCATING SCARCE RESOURCES REQUIRES  Forest Resources (Can also be included in
CHOICES. Land resources)
2. Human Resources
HEIRARCHY (From bottom to top)  Labor Force
3. Physical Resources
Basic Needs  Structures, Equipments, Inventories of inputs
 Ex. Eating breakfast, lunch, dinner. Buying and outputs (Ex. Stocked goods in sari sari
clothes. stores.)
Safety Needs
 Ex. Giving medicine. Eating a delicacy.