STO.

NINO REVIEW CENTER FOR TEACHERS

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goal”
BASIC ECONOMICS
WHAT IS ECONOMICS?

 It’s the study of scarcity, the study of how people use

resources and respond to incentives, or the study of
decision-making.
 It often involves topics like wealth and finance, but it’s not all
about money.
 Economics is a broad discipline that helps us understand
historical trends, interpret today’s headlines, and today’s
headlines, and make headlines, and make predictions about
the coming years.
 Economics ranges from the very small to the very large. The
study of individual decisions is called microeconomics. The
study of the economy as a whole is called macroeconomics.
 WHAT DO ECONOMISTS DO?

Economists have all kinds of jobs, such as professors,

government advisors, consultants, and private sector
employees. Using theoretical models or empirical data, they
evaluate programs, study human behavior, and explain social
phenomena. And, their contributions inform everything from
public policy to household decisions.
• Economics intersects many disciplines. Its applications include
health, gender, the environment, education and immigration.
• Economics is a study of
mankind in the ordinary
business of life.
(Alfred Marshall)

• It is the study of the use

of scarce resources to
satisfy unlimited human
wants.
• Economics is generally
regarded as a social
science.
•Economic policy refers to the
actions that governments take in the
economic field. It covers the systems
for setting interest rates and
government budget as well as the
labor market, national ownership,
and many other areas of government
interventions into the economy. Such
policies are often influenced by
international institutions like the
International Monetary Fund or World
Bank as well as political beliefs and
the consequent policies of parties.
•Source:June 19, 2020
https://www.definitions.net/definition/economic+p
olicy
,
• Economic growth is all about numbers.
As the aptly named Keydifferences.com
points out: “Economic Growth is the
positive change in the real output of the
country in a particular span of time.”
• Economic growth is a straightforward
measurement of actual economic output
— things like gross domestic product
(GDP) fall into this measurement. It’s a
pure numbers game.
• But economic development is much
broader in scope and includes elements
that you might not normally associate
with economics, like social welfare, early
childhood education, and criminal
justice reform.
• Amy Liu, writing for the Brookings Institute,
argues that the goal for economic
development should be “to put a region on
a path to higher growth by improving the
productivity of firms and people in ways
that leads to better incomes and living
standards for all.”
• The end game of economic development is
not just growing the economy, but growing
it in a way that improves the quality of life
for everyone in the region.
• Rather than projects benefitting a few
investors, a successful economic
development project would benefit
investors, companies and people in need of
economic relief. By doing so, there is also a
positive effect on the region and indirectly
business and citizens who live there.
ECONOMIC
DEVELOPMENT IS
ESSENTIALLY
INVESTMENT IN AN
ECONOMY;

ECONOMIC GROWTH
IS INCREASED
PRODUCTION OF AN
ECONOMY.
 BASIC CONCEPTS

• Economics is one of the popular fields

of study among the social sciences
since it covers all kinds of topics.
• However, its core focuses on
understanding how society allocates
its scarce resources.
• Due to the concept of scarcity,
economics tries to devote most of its
time, if not at all, on everyday life
situations.
• 1. EFFICIENCY- in the use of scarce
resources is the Proper allocation of
utilization of resources that would
result in a maximum level of
satisfaction possible with the given
time and technology; or something
that results in maximization of its
output and minimization of waste
• 2. PRODUCTION-refers to
the creation of more
utilities. Any activity that
creates or makes things
for man’s satisfaction.
Factors of Production:
• Land
• Labor
• Capital
• Enterpriser
• Economists call such resources factors of production
because they are used to produce the outputs that people
desire. Outputs are divided into goods and services.
• Goods are tangible (cars, shoes, table, etc.)
• Services are intangible (education, haircut, etc)
• People use good and services to satisfy many of their
wants. The act of making them is called PRODUCTION,
and the act of using them to satisfy wants is called
CONSUMPTION. Goods are valued for the services they
provide.
3. Consumption-refers to the
final utilization of goods and
services
• Distribution-
apportionment of the
national income among
the factors of production.
Shares are:
• Rent, Salary, Interest, profit
• 4. Demand-quantity of goods
and services that buyers or
consumers are willing to buy
at a particular place, time and
at a specific price.
• Law of DEMAND
-as price increases, the
quantity demanded
decreases. Inversely, when
the price decreases, the
quantity demanded increases
5. SUPPLY-quantity of goods
or commodities in the
market, supply focuses on
the attitude of the sellers
or producers in the market
• Law of Supply

The higher the price, the

greater will be the quantity
supplied by the producers.
6. Equilibrium-state
where the demand and
supply of goods and
commodities are equal.
 Market-refers to the
place where sellers and
buyers meet. It is also the
situation where demand
and supply interacts
•Economic equilibrium is a
condition where market forces are
balanced, a concept borrowed from
physical sciences, where observable
physical forces can balance each other.
•The incentives faced by buyers and
sellers in a market, communicated
through current prices and quantities
drive them to offer higher or lower
prices and quantities that move the
economy toward equilibrium.
•Economic equilibrium is a theoretical
construct only. The market never
actually reach equilibrium, though it is
constantly moving toward equilibrium.
7. RESOURCES- natural,
economics, political or
military assets enjoyed by
the nation such as
mineral wealth, labor,
capital or military
personnel
• Anything that is used for
man’s satisfaction
• FREE RESOURCES- goods that can be obtained
without any costs.
• ECONOMIC RESOURCES- those things can be
obtained with some constraints
or limitation due to its cost.
• Free goods become when it has
gone some laboratory processes
(ex. mineral water).
• LAW OF COMPARATIVE
ADVANTAGE

• -It makes a comparison as to

the benefits offered. It
guides and gives an insight,
on the part of the producers,
to compare and decide
which is more advantageous
to do: to buy (or import) or
to produce.
8. ECONOMY’s
GOAL-
-Is to promote the
economics welfare
of the people and
the production of
goods and services
for the people is of
prime importance.
 FOUR KEY ECONOMIC
PROBLEMS

1. What is produced and How?

2. What is consumed and by
whom?
3. How much Unemployment
and
inflation exist?
4. Is productive capacity
growing?
TYPES OF ECONOMIC
SYSTEMS

I. Tradition Systems
• Behavior is based primarily on tradition,
custom, and habit. The techniques of
production also follow traditional patterns.
Finally, production is allocated among the
members according to long established
traditions.
II. Command Systems
• Economic behavior is determined by some
central authority, usually the government,
which makes most of the necessary decisions
on what to produce, how to produce it, and
who gets it.
III. Market Systems
• The decisions about resource allocation are made without any central
direction. Instead, they result from innumerable independent decisions
made by individual produces and consumers; such a system is known as a
free market economy, or more, simply a market economy. This is called
price system.
IV. Mixed Systems
• In practice, every economy is a mixed economy in the sense that it
combines significant elements of all three systems-traditional, command
and market –in determining economic behavior. Furthermore, within any
economy, the degree of the mix will vary from sector to sector.
Ownership of Resources
a. Private-Ownership Company; Public-Ownership Company
• Recently, the rapid growth in labor
productivity has slowed, and the
distribution of income has become more
unequal.
• Market economies are characterized by
constant change in such things as the
structure of jobs, the structure of
production, the technologies in use, and
the types of products produced.
• Driven by the revolution in transportation
and communications, the world economy
is rapidly globalizing. National and regional
boundaries are becoming less important
as transnational corporations locate the
production of each component part of a
product in the country that can produce it
at the best quality and the least cost.
 What Is Price Elasticity of
Demand?

Price elasticity of demand is an

economic measure of the change
in the quantity demanded or
purchased of a product in relation
to its price change. Expressed
mathematically, it is:
Price Elasticity of Demand =
% Change in Quantity
Demanded / % Change in
Price
ECONOMISTS
ADAM SMITH • Adam Smith is a very well-known
Scottish philosopher and economist.
He is often referred to as one of the
first free market capitalists the
world has ever come across and is
hailed as the father of modern
economics, especially due to his
advocacy against intervention from
the government which poses
restrictions on free markets.
 • Alfred Marshall is one of the most
ALFRED MARSHALL
well-known economic scholars of
all time, let alone his generation.
Marshall’s inclinations were more
towards microeconomics, as his
forte lied in the study of markets
in the individual context. He is
widely recognized has one of the
chief forefathers of the economic
discipline due to his lifetime of
contributions to the subject.
THOMAS ROBERT
MALTHUS Thomas Malthus, in full Thomas
Robert Malthus, (born February
13/14, 1766, Rookery, near
Dorking, Surrey, England—died
December 29, 1834, St. Catherine,
near Bath, Somerset), English
economist and demographer who is
best known for his theory that
population growth will always tend
to outrun the food supply and that
betterment of humankind is
impossible without stern limits on
reproduction. This thinking is
AUGUSTO SANTOS • Augusto Santos is a Filipino
career government official who
served as acting Director-
General of the National
Economic and Development
Authority from 2005-2006,
2007-2008 and 2009-2010. He
was educated at the University
of the Philippines.
...more on Wikipedia
• Birthplace: Manila, Philippines
BENIGNO SIMEON • Benigno Simeon Cojuangco Aquino III (born February 8,
1960) is a Filipino politician who served as the 15th
COJUANGCO III President of the Philippines from 2010 until 2016. Aquino is
a fourth-generation politician and the chairman of the
Liberal Party from 2010 to 2016.On September 9, 2009,
shortly after the death of his mother, Aquino officially
announced that he would be a candidate in the 2010
presidential election. He was elected and on June 30, 2010
was sworn into office as the fifteenth President of the
Philippines at the Quirino Grandstand in Rizal Park, Manila,
succeeding Gloria Macapagal-Arroyo. He ended his term on
June 30, 2016, succeeded by Rodrigo Duterte. In 2013,
Time named him one of the ...more on Wikipedia
• Age: 59
• Birthplace: Metropolitan Manila, Manila, Municipalities of
the Philippines, Philippines
BENJAMIN ESTOISTABenjamin Estoista Diokno (born March 31, 1948)
is the current Governor of the Bangko Sentral ng
DIOKNO Pilipinas under the administration of President
Rodrigo Duterte, and Chairman of the Anti-Money
Laundering Council. Prior to his appointment, he
was the Secretary of Budget and Management
under the same administration. He held the same
position under President Joseph Estrada, from
July 1998 until Estrada's ouster in January 2001.
Diokno also served as Undersecretary for Budget
Operations at the Department of Budget and
Management, from 1986 to 1991, during the
administration of President Corazon Aquino.
Age: 70
Birthplace: Taal, Batangas, Municipalities of the
Philippines, Philippines, Batangas, + more
• Since the world economy is apparently about to go to heck in a hand basket, I
thought it might be useful to let the experts weigh in on the subject:
• 1. "Little else is requisite to carry a state to the highest degree of
opulence from the lowest barbarism but peace, easy taxes, and a
tolerable administration of justice.“ Adam Smith
• 2. "There is one rule for the industrialist and that is: make the best
quality goods possible at the lowest cost possible, paying the
highest wages possible.“ Henry Ford
• 3. "We know that advanced economies with stable governments that
borrow in their own currency are capable of running up very high
levels of debt without crisis.“ Paul Krugman

• https://www.inc.com/geoffrey-james/top-10-quotes-about-economics.ht
ml
• 4. "Surplus wealth is a sacred trust which its possessor is bound
to administer in his lifetime for the good of the community.“
Andrew Carnegie
• 5. "The production of too many useful things results in too many
useless people.“ Karl Marx
• 6. "No servant can serve two masters. Either he will hate the one
and love the other, or he will be devoted to the one and despise
the other. You cannot serve both God and Money.“ Jesus of
Nazareth
• 7. "We are fast approaching the stage of the ultimate inversion:
the stage where the government is free to do anything it
pleases, while the citizens may act only by permission.“ Ayn Rand
https://www.inc.com/geoffrey-james/top-10-quotes-about-economics.html
Reviewed by:

BELLA VERDA M. OLIVEROS, MPA, MAEd