Directions: The teacher will play a song while the students

pass the box containing letters to their classmates. Once the

music stops, student handling the box will pick a piece of paper
and will define Economics starting with the letter E-C-O-N-O-M-
I-C- or S.
ECONOMICS
• It is a social science that
involves the use of scarce
resources to satisfy
unlimited wants.
Scarcity
It is a condition where there
are insufficient resources to
satisfy all the needs and
wants of a population.
Scarcity may be relative or
absolute.
Relative scarcity is when a
good is scarce compared to
its demand.

Absolute scarcity is when

supply is limited.
CHOICE AND DECISION-
MAKING
• Because of the presence of
scarcity, there is a need for man
to make decisions in choosing
how to maximize the use of the
scarce resources to satisfy as
many wants as possible.

• Opportunity cost refers to

the value of the best foregone
alternative.
 ECONOMIC RESOURCES
Land - soil and natural resources
that are found in nature and are
not man- made.

Labor - physical and human effort

exerted in production.

Capital - man-made resources used in

the production of goods and services,
which include machineries and
equipment.
 ECONOMICS AS SOCIAL SCIENCE
Economics is a social science
because it studies human behavior
just like psychology and sociology.
A social science is, broadly
speaking, the study of society and
how people behave and influence
the world around them. As a social
science, economics studies how
individuals make choices in
allocating scarce resources to
satisfy their unlimited wants.
 MACROECONOMICS
• Macroeconomics is a division of
economics that is concerned with the
overall performance of the entire
economy. It studies the economic system
as a whole rather than the individual
economic units that make up the
economy. It focuses on the overall flow
of goods and resources and studies the
causes of change in the aggregate flow
of money, the aggregate movement of
goods and services, and the general
employment of resources.
 MICROECONOMICS
• It is concerned with the behavior of
individual entities such as the
consumer, the producer, and the
resource owner. It is more
concerned on how goods flow from
the business firm to the consumer
and how resources move from the
resource owner to the business
firm. It is also concerned with the
process of setting prices of goods
that is also known as Price Theory.
 Applied Economics
• It is the application of economic theory and econometrics
in specific of the core, referring to economic theory and
econometrics, as a means of dealing with economics, it is
typically characterized by the application practical issues in
fields that include demographic economics, labor
economics, business economics, agricultural economics,
development economics, education economics, health
economics, monetary economics, economic history, and
many others.
John Neville Keynes

He is attributed to be the first to

use the phrase "applied
economics" to designate the
application of economic theory
to the interpretation and
explanation of particular
economic phenomena.
Formative Assessment:
Directions: Using the Venn diagram below, compare and
contrast Economics as Social Science and Economics as
Applied Science based on how you understand the lesson. (15
points)