Revisiting economics as a social science
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Transcript of Revisiting economics as a social science
Revisiting Economics as a Social Science
Lesson 1
Applied Economics
Specific Objectives
1. Define economics
2. Determine the importance of economics
3. Describe the nature of economics
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
DEFINITIONS OF
ECONOMICSFROM
DIFFERENT PERSPECTIVES
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
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
ECONOMICS IN A
PROCESS
Unlimited wants
ScarcityMake
Choices
Economic activities
Earning money
Buying goods and services
Depositing and withdrawing
money in bank
Economics from
“Oikanomia”
Household
Management
Science
Social Science
Economics
Economics is classified as a social
science because it deals with the
study of human’s life and how he
lives with other men.
ECONOMICS
Macroeconomics
Microeconomics
Macroeconomics Deals with the economic behavior of the
whole economy or its aggregates
(composed of individual units)
AGGREGATES
Business Government
Households
Macroeconomics
Discusses the following:
- Gross national product
- Level of employment
- National income
- General level of prices
“EMPLOYMENT AND INCOME ANALYSIS”
Microeconomics
Deals with the economic
behavior of individual units
such as:
Consumers
Firms
Landowners
Microeconomics
Discusses the following:
- Price of rice
- Number of workers in a certain firm
- Income of Mr. Fu
- Expenditures of PLDT
“PRICE THEORY”
Divisions of
Economics
Production
Distribution
ExchangeConsumption
Public Finance
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
Goods
Services
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
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.
ECONOMIC
RESOURCESFactors of production or inputs
Land
Entrepreneurs
Labor
Capital
Foreign
exchange
1. Land
These resources consist of free gifts of nature
which includes:
- soil
- rivers
- lakes, oceans
- forests
- mountains
- mineral resources
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.
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
2. Labor
Labor is a flexible factor of production
- workers can be allocated to different areas of
the economy for producing goods and services
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
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
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.
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
QUIZ
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
LET’S TEST
OURSELVES!
2. Economics is a social science because it
deals with:
a. Human nature
b. Natural resources
c. Experimentation
1 point
LET’S TEST
OURSELVES!3. Scarcity of resources means:
a. minimum resources
b. excess resources
c. shortage of resources
d. no resources
1 point
LET’S TEST
OURSELVES!4. These are examples of human wants except:
a. smartphone
b. perfume
c. watch
d. clothing
1 point
LET’S TEST
OURSELVES!
5. Give your definition of
economics
2 points
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