ECONOMICS

PREPARED BY. MR .ANASTACIO LARAYA JR

ABM. PASIG CAMPUS
REBUS PUZZLE
 OBJECTIVES OF THE LESSON
at the end of the lesson the students shall be able to :
• DEFINE WHAT IS ECONOMIC, SCARCITY
• WHY STUDY ECONOMICS.
• DEFERENTIATE .THE MICRO/MACRO ECONOMICS.
• IDENTIFIED THE THREE ECONOMIC RESOURCES
• ILLUSTRATE THE FOUR ECONOMIC SYSTEM AND DEFINE .
 Importance of studying economics
So, why do we study economics?
five reasons why studying economics is important.

• 1. Informs decisions
• Economists provide information and forecasting to inform decisions within companies and governments. This knowledge of economics – or economic intelligence
– is based on data and modelling.
• 2. Influences everything
• Economic issues influence our daily lives. This includes issues such as tax and inflation, interest rates and wealth, inequality and emerging markets, and energy
and the environment. A broad subject, economics provides answers to a range of health, social and political issues that impact households and wider communities.
• 3. Impacts industries
• Firms of all sizes and industries have to rely on economics, whether that’s for product research and development, pricing strategies or how to advertise. This wide
influence means studying economics can open up a variety of career options across all sectors of the economy, from agriculture to manufacturing, to banking and
consultancy. 
• 4. Inspires business success
• Understanding how consumers behave is vital for a business to succeed. Economists use theories and models to predict behaviour and inform business strategies.
For example, how to analyse ‘big data’.
• 5. International perspective 
• Economics affects the world we live in. Understanding domestic and international perspectives – historic and current – can provide a useful insight into how
different cultures and societies interact. For international corporations, understanding the world economy is key to driving success.
 Economics is the study of how people allocate scarce resources
for production, distribution, and consumption, both individually
and collectively.

Adam Smith's Definition of Economics

Adam Smith was a Scottish philosopher, widely considered as the first modern economist. Smith defined
economics as “an inquiry into the nature and causes of the wealth of nations.

Alfred Marshall. Economics is the science which studies human behaviour as a

relationship between ends and scarce means which have alternative uses.
•  Scarcity refers to the limited availability of a resource in comparison
to the limitless wants. Scarcity may be with respect to any natural ...
•
Scarcity in economics refers to when the demand for a resource is
greater than the supply of that resource, as resources are
limited. Scarcity results in ...
• Scarcity refers to the existence of limited resources that are not enough
to address unlimited human needs or demands. On the other hand,
• shortage refers to an occurrence whereby the order in the market outdoes
the supply available at a given time.
• Positive economics describes and explains
various economic phenomena. 
• Normative economics focuses on the value of
economic fairness, or what the economy "should
be" or "ought to be." 
• While positive economics is based on fact and cannot
be approved or disapproved,
• normative economics is based on value judgments.
 • Economic resources are the factors used in
producing goods or providing services. ... 

Economic resources are the factors used in

producing goods or providing services. In other
words, they are the inputs that are used to
create things or help you provide services.
Economic resources can be divided into human
resources, such as labor and management, and
nonhuman resources, such as land, capital
goods, financial resources, and technology.
• Natural resources are materials from the Earth that are used to support
life and meet people's needs. Any natural substance that humans use can be
considered a natural resource. Oil, coal, natural gas, metals, stone and sand
are natural resources. Other natural resources are air, sunlight, soil and water.
• Capital resources include money to start a new business, tools, buildings,
machinery, and any other goods people make to produce goods and
provide services. The items the people in Communityville produced are called
capital resources. ... These are generally classified as goods or services.
• Physical capital implies the non-human assets of the company, such as
plant and machinery, tools and equipment, office supplies etc. that help in the
process of production. Human capital refers to stock of knowledge, talent,
skills and abilities brought in by the employee, to the organization.
Human Resource
• Human resource refers to the people who are part of the workforce. The human
resource plays a significant role in the economy of a country by contributing to
productivity. The other resource becomes useful because of the input by the human
resource.
• Investment in human capital yields a return and it is done through education, training
and healthcare It is truly known that a person who is educated earns better than an
uneducated person. Also, a healthy person is much more productive than an
unhealthy person.
• Human resources are the knowledge, skill, training, and experience that
individuals need to produce goods and services within their economy.
• wants: desires for goods, services, feelings, and other things we would like to have but
do not need.
• needs: things we must have to survive, such as food, water, and shelter. save: to keep or
put aside for future access.
• Four Categories of Economic Resources
• The four categories of economic resources are:
• Land
• Labor
• Capital
• Entrepreneurship
• Land is not just real estate. It is any natural resource found in nature that can
be used to produce goods and services. The land category includes things like
trees, plants, livestock, wind, sun, water and minerals.
• Natural resources are limited. People can't make them, but they can find new
ways of recovering them, such as fracking for natural gas. While some natural
resources are limited, others are renewable, such as wind, sun and trees.
• Labor refers to any human contribution, either physical or intellectual. Labor
takes a natural resource from its original condition and transforms it into a
capital good.
• Usually, when you think of labor, you think of physical labor like working in a
factory, driving a truck to make deliveries, constructing a building or stacking
goods in a warehouse. These are all activities that contribute to the production
of goods or services. However, labor has come to rely more on the intellectual
contributions rather than physical labor.
• Capital
• The first thing to understand about capital is that it is not money. Money is not a
resource. By economic definition, resources must be productive, and money does not
do that. Money is a means to move the economy, but by itself, it doesn't produce
anything.
• Money is used to acquire the productive resources that are used to produce goods
and services. As an example, refineries purchase oil, a natural resource, to make
gasoline, a capital good. Developers use funds to acquire property, a natural resource,
to construct an office building, a capital good.
• Entrepreneurship is the creativity required to bring all of a company’s resources
together to produce a good or service that is sold in the marketplace. In a sense,
entrepreneurship is a special form of labor.
• Entrepreneurs are willing to risk time and money to start a business with the intention of
earning a profit. They organize the other factors of production to create a business.
These businesses produce the goods and services that consumers want to buy.
• Two major types of economics
are microeconomics, which focuses on the
behavior of individual consumers and
producers, and macroeconomics, which
examine overall economies on a regional,
national, or international scale.
• An economic system is a means by which
societies or governments organize and distribute
available resources, services, and goods across a
geographic region or country. Economic
systems regulate the factors of production,
including land, capital, labor.
1.Traditional Economic System
The traditional economic system is the most traditional and ancient
types of economies in the world. Vast portions of the world still
function under a traditional economic system. These areas tend to be
rural, second- or third-world, and closely tied to the land, usually
through farming.
In general, in a traditional economic system, a surplus would be rare.
Each member of a traditional economy has a more specific and
pronounced role, and these societies tend to be very close-knit and
socially satisfied. However, they do lack access to technology and
advanced medicine.
2. Command Economic System
In a command economic system a large part of the
economic system is controlled by a centralized power.
For example, in the USSR most decisions were made
by the central government. This type of economy was
the core of the communist philosophy.
Since the government is such a central feature of the
economy, it is often involved in everything from
planning to redistributing resources.
• A market economy is an economic system in which economic decisions
and the pricing of goods and services are guided by the interactions of a
country's individual citizens and businesses. There may be some
government intervention or central planning, but usually this term refers
to an economy that is more market oriented in general
• In a market economy, most economic decision making is done through
voluntary transactions according to the laws of supply and demand.
• A market economy gives entrepreneurs the freedom to pursue profit by
creating outputs that are more valuable than the inputs they use up, and
free to fail and go out of business if they do not.
• 4. Mixed Economic System
• A mixed economy is a combination of different types of economic
systems. This economic system is a cross between a market economy and
command economy. In the most common types of mixed economies, the
market is more or less free of government ownership except for a few key
areas like transportation or sensitive industries like defense and railroad.
• However, the government is also usually involved in the regulation of
private businesses. The idea behind a mixed economy was to use the best
of both worlds – incorporate policies that are socialist and capitalist.
• To a certain extent, most countries have a mixed economic system. For
example, India and France are mixed economies.
• Economics is the study of how people allocate scarce resources for production, distribution, and consumption, both individually and collectively.
• Scarcity refers to the basic economic problem, the gap between limited – that is, scarce – resources and theoretically limitless wants.
• Two major types of economics are microeconomics, which focuses on the behavior of individual consumers and producers, and macroeconomics,
which examine overall economies on a regional, national, or international scale.
• Economic resources are the factors used in producing goods or providing services.

• Tyes of Economic resource

• Land: Land is an economic resource that includes all natural physical resources like gold, iron, silver, oil etc. Some countries have very rich
natural resources and by utilizing these resources they enrich their economy to the peak.
• Labor: The human input in the production or manufacturing process is known as labor. Workers have different work capacity. The work capacity
of each worker is based on his own training, education and work experience.
• Capital: In economics, Capital is a term that means investment in the capital goods. So, that can be used to manufacture other goods and services
in future.

• An economic system is a means by which societies or governments organize and distribute available resources, services, and goods across a
geographic region or country. Economic systems regulate the factors of production, including land, capital, labor.
• Types of economic system
• Traditional
• Command
• Market
• mixed
 Assignment
• 1.As a future economist how do you solve the Philippine economy for
having shortage of Onion manipulation. (10 points )
• 2. What are the effects of shortage of gasoline Globally ? 10 points