ECONOMIC DEVELOPMENT
To promote economic stability
CHAPTER 1
What is Economics?
-The study of the proper allocation and efficient use of
scarce resources to produce commodities for the
maximum satisfaction of unlimited human needs and
wants.
Needs – are essential for human for survival like food,
clothing, and shelter. The absence of these needs could
mean an early demise of this world.
Three kinds of Needs:
1.Basic needs
2.Eseential needs
3.Needs for luxury Goods
Wants - are goods that give more satisfaction and make
life more pleasant and worth living.
They refer to a person’s desire and preference to
specific ways of satisfying a basic need.
Kinds of Wants
1.Public wants
2.Private wants
Consumers- are the final users of the produced goods
and services for the satisfaction of their needs and
wants.
Producers- use various resources in order to produce
final goods and services. They have to produce
particular goods and services that have demand for the
costumers.
GOALS OF ECONOMICS
1. To strengthen economic freedom
- includes consumers choices, freedom of occupational
choice, freedom to consume or save, freedom to own
properties, and freedom of enterprise.
2. To promote economic efficiency
- Efficiency is producing more output with the use of
fewer resources.
3.
--Stability means there are no violent ups and downs in
the economy.
4. To promote economic security
-people with corresponding skills, capital, and assets are
sold in exchange for income and the value of those
agents depends on the worth of the final goods and
services produced by them.
5. To attain high level of growth in the industry
- Economic growth means that the capacity to produce
goods and services is increasing, it is growing more
rapidly than the population.
Growth is determined by two factors:
1. Expansion of the resources available
2. Improved skills and technology.
2 Basic responsibilities in promoting economic
growth of the Government:
1. to provide order that will create a conducive
investment climate
2. to provide public services that private cannot provide
but are important for an expanding economy.
Economics as Related to other Social Science
Economics as a Social Science
-it deals with the study of the life of people and how
they deal with others as members of society.
Five Social Sciences that are related to
Economics:
1. Anthropology – is a branch of science that studies the
biological, psychological, social, and cultural aspects of
human life.
- Comes from the Greek words Anthropos and logus that
means the study of group or people.
- it also studies every aspect of human society including
social structure, aesthetic, language, and the system as
well.
2. Political Science- the word political comes from the
Greek word polis which means ‘city’ or ‘state’ and
science from the Latin word scire which means ‘to
know’.
- is a systematic study of the state an government.
economic aggregates such as employment, inflation,
and national income.
- It consolidates all goods and services together and
looks at the economy by focusing on employment
generated by the different industries.

- is important in economics because it studies the
mechanics in distribution od power, and its primary
concern is to find out the relationship between the
authority and the masses.
- also give us the information on the main role of people
occupying different positions in the government.
3. Sociology- comes from the Greek words socius and
logus which together mean study of the society or
groups or partners.
- it studies the society by means of analyzing human
groups, institutions, and its social relationships.
- it analyzes the social patterns that results from
numerous individual interactions.
- focuses on social relations, social organizations, social
interaction, social structure, and social processes.
- centers to the totality instead on the finer points.
METHODOLOGIES OF ECONOMICS
1.Positive Economics
- Relates to what is.
-explains what happens in the economy and why,
without making any recommendations to economy
policy or in sample idea, it deals with how economy
works.
2. Normative Economics
- concerns itself with what should be.
- is an economic statement that makes
recommendations to economic policy.
THE SCIENTIFIC METHOD OF ECONOMICS

- it also deals with various social issues and problems, - Economics being a science is a systematic body
ethnic relations, family life, social mobility, and of knowledge.
accessibility of the people in the society. 1. Data Gathering
4. Psychology – derived from the Greek word psyche 2. Economic Analysis
means soul and logus which means study.
3.Economic Conclusion
-is defined as the scientific study of the behavior and
living organisms with special attention to human
behavior.

5. History – is a social science that focuses on the study

of past events.

- through history, we are able to compare the things

that happened in the past and correlate them with what
is happening at the present time.

BRANCHES OF ECONOMICS

1.Microeconomics

- deals with the behavior of individual components such

as household, firm, and individual owner of production.

2.Macroeconomics

-deals with the behavior of economy as a whole with

the view of understanding he interaction between