ECONOCMICS REVIEWER

Historical background of Economics

- came from the greek word “oikos” meaning house and “nomos” whic means household
management.
- Known as political economy.

Xenophon  Plato  Aristotle  Mercantilism  Francois Ouesnay and Physiocrats

c. 353 BCE c. 349 BCE c. 322 BCE 1500-1700 1739

Oeconomics – efficient management and leadership in a household.

The Republic – a blueprint for economies where cities are founded on key principles of speacilization
and division and labor

Topics and Rhetoric – viewed exchange as as to satisfy individual and collective wants.

Tableau and Economique – illustrated the circular flow of ggos and services in the economy.

DEFINITION OF ECONOMICS

TWO KINDS OF GOODS THAT SUPPLY MAN’S NEED AND WANTS:

 Economic Good – have value or place like foo, shelter, and clothings.
 Free Good – air, water and sunglight

Microeconomics

- small unit of economy.

- Tackles the behaviour of consumers, producers and market such as products and services

Maroeconomics

- Entire economy
- Focuses activities of goverment

Economists and their principles:

Adam Smith

- Father of modern economy

- Laissez Faire/let alone policy – goverment should not interfere the activities of man towards the
market.
- Wrote “An inquiry into the nature the causes of the wealth and nations”
- Pointed out the importance on speacilization in achieving the industrialization is concentrating
in one particular work according to one’s skills and ability.
David Ricardo

- Law of diminishing marginal returns – increasing number of people will drove man to cultivate
even the idle lands to support his necessities in lie.
- Law of comaparative advantage – the counrty benefits more in producing the products with
less production cost than any country.

Thomas Robert Mathus

- Discussed the rapid increase in papolation.

- “an essat on the priciple of population” – if population increases rapidly then the supply of food,
it can cause the femine and will affect the economic activites of man.

John Maynard Keynes

- Father of macroeconomics
- Goverment plays significant role in maintaining equilibrium in the economy triugh republic
spending and keeping the market prices.
- Law of supply and demand

Karl Marx

- Father of communism
- ‘’das kapital” – contains the teaching of communism.

RELATIONSHIP OF ECONOMICS AND OTHER SCIENCES:

 Sociology – composition of society, social relationships and social institution.

 Political Science – goverment structure, functions responsabilities.
 History – recorded struggle of and progress made by man from past to present.
 Ethics – morals of an individual and doing what is right.
 Chemistry – composition of chemicals
 Psychology – influences human behaviour
 Physics – matter and energy
 Geography – physical features of the cooountry
 Biology – living things like human, animals, and plants
 Mathematics – numerical numbers and operations
 Statistics – learning from data

Scientific Method – analyzing the said issues or problems of the economy.

Economics: The science of making choice

 Cost and Benfits

 Choice and Decision
 Opportunity and Benfit

Individual Choice – decisions made by people

Social Choice – decisions made by goverment

Benefit – what you gain from choices

SCARCITY VS. SHORTAGE

Scarcity – resources are limited to satisfy the unlimted needs and wants of people

Shortage -