The 5 E's of Economics

1. Economic Growth

2. Productive Efficiency

3.Productive Efficiency

4. Equity

5. Full Employment

Figure 4. The Figure summarizes the concept of scarcity, the necessity of making
choices, the three options that society has for dealing with the scarcity, and the 5Es of
Economics.

Economic Growth

(The first option for dealing with scarcity and the the first "E" of economics)
Economic Growth is an increase in the ABILITY to produce goods and services.

This type of Economic Growth is caused by a society getting:

a) more resources,

b) better resources, or

c) better technology.

How can economic growth alleviate scarcity and raise societal satisfaction?
We could manufacture more goods and services and satisfy more of our desires if we
 Figure 5

PRODUCTIVE EFFICIENCY

Producing a low cost can be defined as, or attained as, productive efficiency.

Fewer resources are used and more can be produced by manufacturing at a low
cost. This decreases scarcity and allows us to get more satisfaction from the resources
we already have.

We can produce at a minimum cost and achieve productive efficiency by:

a. not using more resources than necessary

b. using resources where they are best suited

c. using appropriate technology

How does this improve society's satisfaction?

More can be produced from the same amount of resources if businesses use resources
where they are best suited.

For example, free trade is an essential prerequisite for achieving productive

efficiency since it permits resources to be deployed where they are most effective,
regardless of the state or country. Free trade aids productivity by allowing businesses
and governments to deploy resources where they are most effective.
Enrichment

1. Find a news article or magazinein the internet about economicnews, evaluate

and analyze.

2. What are the 4 Es of economic?Explainthe use of the 4 Es in reducingscarcity.

REFERENCES

SoniaM. Zaide.(2014).LivingEconomicsAllNationsPublishingCo., Inc.

Bon KristoferG. Gabay, RobertoM. Remotin,Jt., Edgar Allan M. Uy, Anna CorinnaD.
Pizarro-Uy.EconomicsConceptesand Principles.Rex PrintingCompany,Inc.

CristobnalPagose, Rosemary Dinio, George Villasis.(2014). Introductory to

Macroeconomics.Rex PrintingCompany,Inc

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