Soc.

Sci 6 – Economics
 economics
PROPER ALLOCATION AND
EFFICIENT USE OF AVAILABLE
RESOURCES FOR THE
MAXIMUM SATISFACTION OF
HUMAN WANTS.
 NATURE OF
economics
- Economics is a science.
- A social science
- Interdependent with other social
sciences.
 Interdependent with
SOCIAL other
sciences.

1. Psychology 4. Political Science

2. History 5. Religion
3. Sociology
  
Branches of Economics

1. Macroeconomics – deals with the economic

behavior of the whole economy or its
aggregates.

2. MicroEconomics – deals with the economic

behaviors of individual.
  
Branches of Economics

1. MacroEconomics – expenditure of the whole

banking industry, aggregate consumers.

2. MicroEconomics – expenditure of BPI,

individual consumers
  
Branches of Economics

However, what is true in Microeconomics

may not be true in Macroeconomics.
  
Approaches to
Economics

1. Positive Analysis / Economics

2. Normative Analysis / Economics

 
  
Positive Economics /
Analysis

- strives to describe what exists and how things work

- objective (without making judgments)
Descriptive economics, which involves the
compilation of data that describe phenomena and
facts.
 
  
Positive Economics /
Analysis

Economic theory, which involves building

models of behavior.

An economic theory is a general statement

of cause and effect, action and reaction.
 
  
Normative Economics /
Analysis
-

looks at the outcome of economic behaviour

through judgements and prescriptions for cause
of action
simply add an expression of opinion or value
 
  
Normative Economics /
Analysis

- looks at the outcome of economic behaviour

through judgements and prescriptions for cause of action
simply add an expression of opinion or value

Also called policy economics, analyzes outcomes of economic behavior, evaluates

them as good or bad, and may prescribe courses of action.

 
  
Divisions of Economics

1. Production
2. Distribution
3. Exchange
4. Consumption
5. Public Finance
 
 Production

• Refers to the process of

producing or creating goods
needed by households to
satisfy their needs.
 Production

• INPUTS - Factors of
productions. What is used in
production.

• OUTPUTS - End product.

 DISTRIBUTION

• Refers to the marketing of

goods and services to different
economic outlets for allocation
to individual consumers.
 EXCHANGE

• Process of transferring goods and

services to a person or a person in
return for something.
• Medium of exchange is money
• We exchange our money with
goods and services.
 CONSUMPTION

• Proper utilization of economic

goods. However they cannot be
utilized unless you pay for it.
• We can also say that consumptions is
spending money for goods and
services in order to yield direct
satisfaction.
 Public finance
• Activities of the government regarding taxation,
borrowings and expenditures.
• Deals with the efficient use and fair distribution of
public resources in order to achieve maximum
social benefits.
• This means government programs and projects
which are funded by taxes and loans are properly
implemented and managed to generate maximum
benefits for all members of the society.