COME HOLY SPIRIT

Come Holy Spirit

Fill the hearts of your faithful
And kindle them the fire of your love
Send forth your Spirit, O Lord

That the face of the earth be renewed

O God, who by the light of the Holy Spirit

Instruct the hearts of your faithful.
Grant that by the same Spirit, we may ever
Know what is right and ever rejoice in His
Consolation through Christ, our Lord. Amen
 What is Economics?

What is Applied Economics?

Who is the father of modern

economics?

What is Scarcity?
 What are the three economic
resources?

What are the two branches of

economics?

What are the three economic system?

What are the basic economic

problems?
1. DMAEDN
DEMAND
4. EANQTUOI
EQUATION
2. PCIRE
PRICE
5. GPAHR
GRAPH
3. MKRTAE
MARKET
LAW OF DEMAND
BASIC CONCEPTS:
1. MARKET
A place where buyer and sellers interact and engage
in exchange. It is the interaction between buyers and
sellers of trading or exchange. It is where the consumer
buys and the seller sells.
Types of Market:
A. Goods Market
It is the most common type of market because it is
where we buy consumers goods.
B. Labor Market
It is where workers offer services and look for job,
where employers look for workers to hire.
C. Financial Market
It includes the stock market where securities of
corporations are traded.
BASIC CONCEPTS:
2. Price
The value of a product expressed in monetary terms
BASIC CONCEPTS:
3. Price System
It determines the allocation of goods and services
among members of the society.
BASIC CONCEPTS:
4.Demand
Reflects the consumer’s desire for a commodity. The willingness
of a consumer to buy a commodity at a given price.
BASIC CONCEPTS:
5. Demand Schedule
The quantities consumers are willing and able to buy if a good
at various prices.
 The demand function can be illustrated in
3 different ways:

1.Schedule or table
2.Graph
3.Equation
Qd = D – (P/2)
The quantity demanded for a good is dependent on the price of
that good. Presented in Table below is a hypothetical monthly
demand schedule for vinegar (in bottles) for one individual. The
quantity demanded is determined at each price with the following
demand function:

Hypothetical Demand Schedule of Maria for Vinegar (in bottles)

Price per bottle Number of Bottles
P0 6
2 5
4 4
6 3
8 2
10 1
The demand curve is graphical illustration of the
demand schedule, with the price measure on the
vertical axis (Y) and the quantity demanded
measured in the horizontal axis (X).
Chart Title
6

5
Price per bottle Number of Bottles5

4
4.3 P0 4.4
6 4.5

3
2 3.5
3
5
2.8

2
2.4
2
4 2.5
2
4
1.8

1
6 3
0
8 2
Category 1 Category 2 Category 3 Category 4
10 Series 1 Series 2 Series 3 1
Hypothetical Demand Curve of Maria for Vinegar
(in bottles) for One Month
A demand function shows how the quantity demanded
of a good depends on its determinants, the most
important of which is the price of the good itself , thus,
the equation:

Qd = f(P)

Qd = f (price, income, prices of related goods, tastes,

expectations)
 To illustrate the demand function through equation,
the formula is:

Qd = D – (P/2)

Qd is the quantity demanded

D is the demand at price 0
P is the given price.
Hence, in the given example, suppose the only data provided is the
quantity demand at price 0 which is 6 and the prices thereof which
is 2, 4, 6, 8, 20. Thus, the demand function using equation is:

Qd = 6 – (P/2)

At price P2, the quantity demand is 5 which is computed as:

Qd = 6 - (2/2)
=6-1
Qd = 5

At price P4, the quantity demand is 4 which is computed as:

Qd = 6 – (4/2)
=6-2
Qd = 4
At price P6, the quantity demanded is 3 which is computed
as:
Qd = 6 – (6/2)
=6-3
Qd = 3

At price P8, the quantity demand is 2 which is computed as:

Qd = 6 – (8/2)
=6-4
Qd = 2

At price P10, the quantity demanded is 1 which is computed

as: Qd = 6 – (10/2)
=6-5
Qd = 1
EXAMPLE:

DEMAND FUNCTION: QD = 50 – 2P

DEMAND SCHEDULE OF BUKO JUICE PER CUP

QUANTITY
PRICE
DEMANDED
A 6
B 34
C 10
D 26
E 14
A. Qd = 50 – 2P B. Qd = 50 – 2P C. Qd = 50 – 2P
= 50 – 2 (6) 2P = 50 – Qd = 50 – 2(10)
= 50 – 12 2 2 = 50 – 20
Qd = 38 = 50 – 34 Qd = 30
2
= 16
2
P=8
D. Qd = 50 – 2P E. Qd = 50 – 2P
2P = 50 – Qd = 50 – 2 (14)
2 2 = 50 – 28
= 50 – 26 Qd = 22
2
= 24
2
P = 12
DEMAND SCHEDULE: DEMAND CURVE:

QUANTITY 14
PRICE
DEMANDED 12
A 6 38

Price
10
B 8 34
8
C 10 30
6
D 12 26 22 26 30 34 38
E 14 22 Quantity Demand
THE LAW OF DEMAND
As the price of good decreases, all other things remain
constant, the quantity demanded increases; and as the price
increases, ceteris paribus, the quantity purchased decreases.
Income Effect (Budget of consumers)
It is felt when a change in a price of a good changes
consumer’s real income or purchasing power, which is
the capacity to by with a given income.

Substitution Effect (Opportunity Cost)

It is felt when a change in the price of a good
changes demand due to alternative consumption of
substitute goods.
NON-PRICE DETERMINANTS OF PRICE
1.The price of the good or service.
2.Prices of related goods or services.
3.Income of buyers.
4.Tastes or preferences of consumers.
5.Expectations.
6.Number of buyers in the market
EXERCISE:

Complete the Demand Schedule

DEMAND FUNCTION: Qd = 36 – 3P
QUANTITY
PRICE
DEMANDED
A 3
B 21
C 7
D 9
E 3
A. Qd = 36 – 3P B. Qd = 36 – 3P C. Qd = 36 - 3P
= 36 – 3 (3) 3P = 36 – Qd = 36 – 3 (7)
= 36 – 9 3 3 = 36 – 21
Qd = 27 = 36 – 21 Qd = 15
3
= 15
3
P=5
D. Qd = 36 – 3P E. Qd = 36 – 3P
3P = 36 – Qd 3P = 36 – Qd
3 3 3 3
= 36 – 9 = 36 – 3
3 3
= 27 = 33
3 3
P=9 P = 11
Demand Schedule: Demand Curve:
11
QUANTITY
PRICE
DEMANDED 9
A 3 27

Price
7
B 5 21
5
C 7 15
D 9 9 3
3 9 15 21 27
E 11 3 Quantity Demanded