Title: Principles of Economics with Agrarian Reform and Taxation
1 Principles of Economics with Agrarian Reform and Taxation
Mrs. Marfel M. Flores
2 Previously ...
Orientation on E-Learning
Background of the course
3 Today ...
Definition/ Division /Branches Of Economics
Human Needs and Wants
Understand the fundamental concepts in economics
Analyze the basic economic problems
5 What is economics
Economics is the social science that studies the production distribution and consumption of goods and services.
It is also the study of how the forces of supply and demand allocate scarce resources.
The term economics comes from the Ancient Greek word oikonomia that means management of the household.
Its root word is from (oikos house) (nomos custom or law) hence rules of the house(hold)
Economics is the study of mankind in the ordinary business of life it examines that part of an individual and social action which is most closely connected to the attainment of and the use of the material requisites of well-being.
Alfred Marshall British economist
Economics is a science that deals with the study of human behavior as a relationship between ends and scarce means which have alternative uses.
Lionel Robbins British economist
Economics is the proper allocation and efficient use of available resources for the maximum satisfaction of human wants.
Economics is also the study of how human beings go about the business of organizing its consumption and production activities.
It is also the study of how to improve society.
11 Divisions/Branches in Economics
Macroeconomics deals with the economic behavior of the whole economy or its aggregates such as government business and household
It is also known as big economics for it addresses the issue of unemployment inflation monetary and fiscal policy for an entire economy.
It looks at the total output of a nation and the way the nation allocates its limited resources of land labor and capital in an attempt to maximize production levels and promote trade and growth for future generations.
Macroeconomics is concerned with the discussion of topics like gross national product level of employment national income general level of prices total expenditures etc.
Microeconomics deals with the economic behavior of individual units such as the consumers firms and the owners of the factors of production.
It is also known as small economics which examines the economic behavior of agents (including individuals and firms). It studies the parts that make up the whole economy.
Analyzing certain aspects of human behavior microeconomics shows us how individuals and firms respond to changes in price and why they demand what they do at particular price levels.
Such specific economic units constitute a very small segment of the whole economy
For example the price of rice the number of workers of San Miguel Corporation the income of Mr. Chua the expenditures of MERALCO etc
When we study the income or family savings bank we are dealing with microeconomics but when we deal with the total income or total expenditure of the whole banking industry then we are involved in the study of macroeconomics
If we discuss the economic crisis of our country we are concerned with macroeconomic analysis
However what is true in microeconomics may not be true in macroeconomics.
17 Some concepts we have to remember
Scarcity -means that available resources are insufficient to satisfy all wants and needs
Demand - refers to how much (quantity) of a product or service is desired by buyers.
Supply- represents how much the market can offer. The total amount of a good or service available for purchase
Allocation - The systematic distribution of a limited quantity resources over various time periods products operations or investments.
Resources- are the inputs that society uses to produce output called goods. Resources include inputs such as labor capital and land. It describes all the things available at our disposal that can be used to satisfy our needs.
19 Resources can be classified into
Land - all the natural resources of the earth. That includes the fish in the sea all the minerals found in the earth metals sand stones rocks timber food from the soil and so on.
Labour - all the human mental and physical effort that goes into production. This will include people who work as street cleaners people who are interior designers teachers the police doctors bricklayers architects and so on. The reward for labour is referred to as wages.
Capital - all the equipment machinery and buildings that is not used for its own sake but for the contribution it makes to production. This includes things like office desks and chairs computers specialist machinery in a factory the coffee machine and so on. The price of acquiring capital is referred to as interest.
Enterprise - the skills needed to organize other resources into some form of production. Some people would put enterprise as a specialist skill within labour but enterprise does have some distinctive characteristics that merit its own category. The return for enterprise is called profit.
23 The 3 Basic Economic Problems
What goods and services to produce and how much.
How to produce the goods and services.
For whom are the goods and services.
24 The Basic Economic Problem 25
The most basic problem in economics is
How do we satisfy unlimited needs/wants with limited/scarce resources.
The right allocation and use of resources is the role of both people and government that is why the measure of growth and development of the country is based on the right economic choice of the government.
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