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ECONOMICS understand how the government make economic

decisions such as shaping policies regarding

 Economics is a social science that deals with the taxation, borrowing money, minimum wage and
allocation of scarce resources to satisfy human’s the such. It enables the government to come up
unlimited wants and needs. with the best ways to allocate the scarce resources
in our country to meet our wants and needs.

1. Social Science GROWTH and DEVELOPMENT

 Economist observes the economy by
gathering relevant data from households,  Growth is measurable (physical). It can be seen.
groceries, supermarkets and firms in the  Development is felt by the people.
locality and interprets such. Through the  Growth (Ex. The Philippines is now Rank #.....
scientific way of investigation (Identifying the and Makati City is the #1 City)
Problem, Formulating Hypothesis, Gather  Development (Ex. Filipinos notice that the
Data, Analyze Data, Conclusion), an economy in the Philippines is doing a good job.
economist organize his/her facts and High salary.)
understand the problems of a community
which leads to an action or progress. ECONOMICS IS RELATED TO:
 Economics is “Social” because economist
deals with the society / people. Its central 1. Mathematics
subject is man and how he interacts with the  Equations, tables and graphs.
other elements of society.  Manipulate equations.
 Statistics and Percentages.
2. Allocation  Ex. About 17% of the cities in the Philippines
 Allocation is the proper distribution of were affected by the drought and famine.
 Economist must determine how to distribute 2. Physics, Chemistry, and Biology
the goods and services produced among  Advances enable the society to better manage
different groups of people. its resources through new processes.
 Prioritization.  New equipment.
 Development in technology.
3. Resources  Ex. Bone-scanners are more effective than
 Resources are SCARCE – “kapos / simple X-ray.
 Scarcity cannot be solved while shortage – 3. History
“kakulangan” can be solved.  Economics rely on historical data – economic
 Resources are prolific meaning it has many data.
uses.  Formulate and evaluate theories
 Wise use of resources means that there is no  Develop plans
waste and conservation is done. Minimun cost  Ex. Last year 2001, the population of the
for maximum quality. Philippines is 99999999999999 billion.
 Can either be Human, Natural, Physical,
Capital. 4. Sociology
 Understand the interaction among various
4. Human wants and needs economic units.
 Unlimited.  Evaluate types of social organization – how
 Economics has 2 aims namely survival and they affect economic growth
satisfaction.  Ex. Youth for Christ organization participates
in giving relief goods.
5. Psychology
 Why is the study of economics important?  How human , individuals, act or think
 An understanding of the basic concepts and  How individuals make decisions.
principles of economics will enable people to  How people react
understand the economic state of our country
 Ex. The passage of RH Law agitated the pro-
during a season. Moreover, knowledge in
life activists resulting to a rally.
economics help the students or readers to
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.
 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?
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
 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.