Module 1
Lesson 1
BASIC UNDERSTANDING AND
CONCEPTS OF ECONOMICS
HOMAPON HIGH SCHOOL SENIOR HIGH SCHOOL
Subject Title:
APPLIED ECONOMICS
Teacher: ROMMEL U. QUIONES
PRE-TEST
I.
True or False: Carefully read each sentence and
determine if the sentence is true or if the
sentence is false.
1.
2.
3.
4.
5.
Economics comes from the Greek word
oikonomia which means household chores.
Economics is considered a field of social
science.
Economics is relevant because it is part of
everybodys life.
There are three (3) divisions of Economics,
the microeconomics, the macroeconomics
and the home economics.
As a science, Economics is related to other
sciences.
ACTIVITY
In front of you are candies that
you could get and eat. Come on,
everybody is invited to get
candies. Do not be shy
ANALYSIS
What
happened when you were
invited to get candies? State
your observation.
Let us define Economics
Using
the words written on the board,
how would you define Economics?
ECONOMICS AS DEFINED
From the Greek words Oikos meaning household
and nomos meaning management
= household management
ECONOMI
CS
The wise production and use of wealth to
meet the demands or needs of the people
ECONOMICS IN OUTLINE
Economics
is derived from two Greek words
Oikos- a house
Nemein- to manage
Means managing an household
DEFINITIONS
ADAM SMITH (1723 - 1790),
Father of Economics
Book An Inquiry into Nature and Causes of
Wealth of Nations (1776)
defined ECONOMICS as the practical
science of production and distribution of
wealth.
In this definition wealth is given the first
place and man is given the second place
DEFINITIONS
ALFRED MARSHALL (1842 - 1924)
book Principles of Economics (1890)
defined Political Economy or 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.
DEFINITIONS
LIONEL ROBBINS (1932 -)
book An Essay on the Nature and
Significance of Economic Science in 1932.
According to him, economics is a science
which studies human behaviour as a
relationship between ends and scarce
means which have alternative uses
Ends human wants
Means resources with which wants are
fulfilled
DEFINITIONS
Prof. PAUL SAMUELSON
defined economics as the study of how
men and society choose, with or without
the use of money, to employ scarce
productive resources which could have
alternative uses, to produce various
commodities over time, and distribute them
for consumption, now and in the future
among various people and groups of
society
SCHOLARLY DEFINITIONS
Roger Le Roy Miller (Economics, Today and
Tomorrow)
Economics concerns situations in which choices
must be made about how to use limited
resources, when to use them and for what
purposes. Resources can be defined as the things
people use to make the commodities they want.
Hall and Loeberman (Macroeconomics: Principles
and Applications)
The study of choice under the condition of
scarcity
SCHOLARLY DEFINITIONS
Bernardo Villegas (Guide to Economics for
Filipinos)
A social science that studies and seeks to
allocate scarce human and non-human resources
among alternatives in order to satisfy unlimited
human wants and desires.
Gerardo Sicat (Economics)
a scientific study which deals with how
individuals and society make choices,
COMMON WORDS AMONG
DEFINITIONS
Scarcity- a situation wherein the amount of
something available is insufficient to
satisfy the desire for it.
Resources - The labor, capital, land and
natural resources and entrepreneurship
that are used to produce goods and
services.
Unlimited without limits, infinite
Wants desires
FINALLY
ECONOMICS
is a social science that
deals with how people organize
themselves in order to allocate scarce
resources in order to produce goods
and services that will satisfy the
unlimited and multiplying wants and
needs of man.
CONCERNS OF ECONOMICS
ECONOMICS is concerned with
PRODUCTION
Production is the use of inputs to
produce outputs.
Inputs are commodities or services that
are used to produce goods and services.
Outputs are the different goods and
services which come out of production
process.
Society have to decide what outputs
will be produced and in what
quantity
CONCERNS OF ECONOMICS
Economics is concerned with
DISTRIBUTION
Distribution is the allocation of the total
product among members of society. It is
related to the problem of for whom goods
and
services
are
to
be
produced.
Economics is concerned with
CONSUMPTION
Consumption is the use of a good or
service. Consumption is the ultimate end
of economic activity. WHEN THERE IS NO
CONSUMPTION, THERE WILL BE NO NEED
FOR PRODUCTION AND DISTRIBUTION.
HISTORICAL DEVELOPMENT
OF ECONOMICS
HUNTING AND FISHING
PASTORAL STAGE
AGRICULTURAL STAGE
HANDICRAFT STAGE
INDUSTRIAL STAGE
DIVISIONS OF ECONOMICS
ECONOMICS
MACROECONOMICS
General, economy as a whole
MICROECONOMICS
Specific
Deals with the economic
behavior of the whole economy
or its aggregate such as
government, business,
unemployment, inflation and
the like.
Deals with the economic
behavior of the
individual units such as
consumers, firms, the
owners of factors of
productions
Refers to management of
income, expenditures, wealth or
resources of a nation.
THE SCOPE OF ECONOMICS
Macroeconomics is
the branch of
economics that
examines the
economic behavior of
aggregates
income, output,
employment, and so
on on a national
scale
Microeconomics is
the branch of
economics that
examines the
functioning of
individual industries
and the behavior of
individual decisionmaking units that
is, business firms and
households.
The Macroeconomics and Microeconomics Outline
Microeconomic
s
Production
Prices
Income
Employment
Production/
Output in
Individual
Industries
and
Businesses
How much
steel?
How many
offices?
How many
cars?
Price of
Individual Goods
and Services
Price of medical
care
Price of gasoline
Food prices
Apartment rents
Distribution of
Income and
Wealth
Wages in the
auto
industry
Minimum
wages
Executive
salaries
Poverty
Employment by
Individual
Businesses &
Industries
Aggregate Price
Level
Consumer prices
Producer Prices
Rate of Inflation
National
Employment
Income
and
Total wages and Unemployment
salaries
in the Economy
Total corporate
Total number of
profits
jobs
Unemployment
rate
Macroeconomic National
s
Production/O
utput
Total
Industrial
Output
Gross
Domestic
Product
Growth of
Output
Jobs in the steel
industry
Number of
employees in a
firm
ECONOMICS AS A SCIENCE
Is a science because it is an organized body
of truth, coordinated, arranged and
systematized with reference to certain
general laws and principles.(Observation,
Formulation of theories, Gathering of data, Experimentation,
Conclusion, Generalization)
Economic analysis seeks to explain
economic events using some kind of logic
based on a set of systematic relations.
It is a social science because the subject
matter of economics is people or societies
Relations of Economics to
other Sciences
MATHEMATICS
NATURAL
SCIENCE
POLITICS
ECONOMICS
ETHICS/
RELIGION
SOCIOLOGY
HISTORY
GEOGRAPHY
POST TEST
I.
True or False: Carefully read each sentence and
determine if the sentence is true or if the
sentence is false.
1.
2.
3.
4.
5.
Economics comes from the Latin word
oikonomia which means household
management
Economics is considered a branch of social
sciences.
Economics is relevant because it is part of
our way of life.
There are three (3) divisions of Economics,
the microeconomics, the macroeconomics
and the home economics.
As a science, Economics is related to other
ESSAY
Is Economics a science?
Explain why if yes or why not if no
