ECONOMICS

AGRICULTURAL It is the study of ALLOCATION OF SCARCE resources to

meet the UNLIMITED human wants.

ECONOMICS

MICRO-ECONOMICS MACRO-ECONOMICS
It studies individuals and business decisions. It analyzes the decisions made by the countries
and the governments.
POSITIVE ECONOMICS NORMATIVE ECONOMICS
It describe and explains various economic It focuses on the value of economic fairness,
phenomena. Based on facts. or what the company “should be” or “ought
to be”. Based on value judgement.

AGRICULTURAL ECONOMICS SCARCITY

It is the study of the allocation, distribution The condition where the demand of
and utilization of the resources used, along
with the commodities produced, by farming. something is greater than its availability.
SCARCE GOOD FREE GOOD
Resource with an available quantity Resource available without limit
that is less than its desired use.

BASIC ECONOMIC PROBLEMS

OPPORTUNITY COST Scarcity is what drives society to answer the following
problems:
Is the value of the best alternative
a. What to produce?
forgone in making any choice.
b. How much to produce?
c. When to produce?
d. How to produce?
e. For whom to produce?
THEORY OF PRODUCTION
Theory of Production examines the relationship
between the factors of production and the output
Factors of
of goods and services.
Production

LAND TYPES OF LAND

Refers to all natural resources. All natural resources • Residential
either on the surface of the earth or below the • Commercial
surface of the earth or above the surface of the
• Recreation
earth is LAND.
• Cultivation
• Extraction
• Uninhabitable
LABOR TYPES OF LABOR
It refers to all human effort that assists in • Unskilled
production is LABOR. • Semi-skilled
• Skilled
• Professional

CAPITAL TYPES OF CAPITAL

It refers to all manmade resources used • Fixed
in the production process. • Working
• Venture
ENTREPRENEUR
It refers to a person who brings other
WATER THERAPY
factors of production in one place. (2 minutes)

COST
Theory of Cost These are expenses incurred in the
business operation which include
monetized and non-monetized items.
KINDS OF COST
a. Fixed Costs (FC) – cost that do not change as
production is increased or decreased.
b. Variable Costs (VC) – cost that vary with output.
c. Opportunity Costs – is equal to foregone income.
d. Social Costs – expenses intended to protect the
society and the environment.
e. Conventional Cost – cost items used in the
economic analysis of the business operation.
KINDS OF CONVENTIONAL COST
a.Total Costs (TC) – the sum of fixed costs
and variable costs at a particular level of
output.
b.Marginal Costs (MC) – the cost of one
more unit of output.
c.Average Costs (AC) – total costs divided
by the level of output.

FACTORS THAT DRIVE THE DEMAND

DEMAND
• Product/service price
It is an economic concept that relates • Buyer’s income
to a consumer’s desire to purchase • Prices of substitute goods
goods and services and willingness to • Consumer’s preference
pay a specific price for them.
• Consumer’s expectation for a
change in price.
LAW OF DEMAND
SUPPLY
 It is the quantity of a certain
Other things being equal (ceteris commodity that is offered for sale at
paribus), when a price of a commodity certain price at a given place and
falls, the quantity demanded of that time. It represents how much the
commodity increases. market can offer.

LAW OF SUPPLY EQUILIBRIUM

The supply of the commodity varies  It is achieve at the price demanded
directly as the price of the commodity, and supplied are equal.
though not proportionately.
DISEQUILIBRIUM
In a market setting, disequilibrium
occurs when the quantity supplied is not
equal to the quantity demanded.

ELASTICITY
ELASTICITY
 It refers to the measure of the
responsiveness of quantity
demanded or quantity supplied to
one of its determinants.
 ELASTICITY ELASTICITY

ELASTICITY UTILITY
Refers to the total satisfaction or benefit
from consuming a good or service.
a. Ordinal Utility
b. Cardinal Utility
c. Marginal Utility
INTERNATIONAL TRADE
Trade between people or firms in different DUTY
countries.
a. Export A tax levied on import.
b. Import
c. Net Exports
d. Embargo
e. Qoutas

TARIFFS
VALU ADDED TAX
A duty or tax imposed on an import or an
export. An indirect tax levied at the time of
exchange of goods and services from
A schedule of charges of business, primarily production to consumption.
especially on a public utility.