ECONOMICS

LESSON 1
What is Economic?
Is the proper allocation and efficient
use of available resources for the
maximum Satisfaction of human
wants. It is the science of choice. It
studies how people choose to use
scarce resources to produce various
commodities
Production – refers to the process of
producing or creating goods needed by
the Households to satisfy their needs.

Factor of production – inputs

Goods and services – outputs

Factor of Production :
 Goods - a good is something you can see and
feel, It’s something you can use.
e.g. Shoes, Bag, Car, Flashlight, Toothpaste
 Service – a service is something done for
someone else. Sometimes people are paid for
their service or they are not.
e.g. Teacher. Doctor, Driver
 Producer- a producer is a person or business
that makes goods or provides services.

 Consumer – a consumer is a person or business

that buys or uses goods and services.

 Distribution – refers to the marketing of goods

and services to different economic Outlet
Definition of Scarcity
Scarcity is the reason why people have
to practice economics. Economics, as
a study, is the social science that
involves the use of scarce resources to
satisfy unlimited wants
KINDS OF SCARCITY
A.Relative Scarcity-Is when a good is
scarce compared to its demand.

B.Absolute Scarcity- is when supply is

limited.
DIFFERENT Examples of scarcity
 Land – a shortage of fertile land for populations to grow food.
For example, the desertification of the Sahara is causing a
decline in land useful for farming in Sub- Saharan African
countries.
 Water scarcity – Global warming and changing weather, has
caused some parts of the world to become drier and rivers to dry
up. This has led to a shortage of drinking water for both humans
and animals.
 Labor shortages- In the post-war period, the UK experienced
labor shortages – insufficient workers to fill jobs, such as bus
drivers. In more recent years, shortages have been focused on
particular skilled areas, such as nursing, doctors and engineers
 Health care shortages - In any health care system, there are
limits on the available supply of doctors and hospital beds. This
causes waiting lists for certain operations. We are now
experiencing lack of doctors and nurses because of pandemic
AND HOSPITAL NEEDS LIKE MEDICINE AND HOSPITAL BEDS
Many patients need to assist from different hospital.
 Seasonal shortages - If there is a surge in demand for a popular
Christmas present, it can cause temporary shortages as demand
as greater than supply and it takes time to provide.E.G. LIKE
NESTLE CREAM AND CONDENSED MILK USED FOR MAKING
SALAD AND ALSO HAM. MOST OF PEOPLE EXPERIENCED
SCARCITY OF GOODS ONLY DURING CHRISTMAS SEASON
 Commodities -Goods like gold, oil, and other fossil fuels are
naturally rare.
 Natural Disaster – Hurricanes, volcano eruptions, and
flooding’s are all examples of natural disasters that can
contribute to scarcity.
Four (4) Kinds of Economic
Resources
 Land-these resources consist of free gifts of nature which
includes:
- soil, rivers, lakes oceans, forests, mountains, and minerals
Land considered an economic resource because it has a price
attached to it. We usually pay for it through rent or lease.

 Labor - also called “human resources . It refers to all human

efforts , be it mental or physical, that help to produce satisfying
goods and services, In return , he earns income in forms of
wages and salaries. Labor is a flexible factor of production.
Workers can be allocated to different areas of economy for
producing goods and services.
 Capital – can represent the monetary resources use to purchase natural
resources
e.g. companies use capital to buy land and other goods. It represents the
major physical assets individuals and companies use when producing goods
and services.
e.g. buildings, vehicles, equipment (Income derived from capital is interest)

 Entrepreneurs – organizer and coordinator of other factors of production :

land, labor, capital. He uses initiative talent and resourcefulness to create
economic goods.
Seatwork #1:
Essay :
 Choose one from the guide questions below and answer in essay format (with
introduction, body, and conclusion).
 
Guide questions:
 
1. What are the different kind’s economic system? Give at least 2 each
example.
2. What is the difference of goods and services?
ACTIVITY #1:
Prepare one whole bond paper:
1. Cut a picture from newspaper or magazine
2. Identify the picture from sample of scarcity.

Points Picture:
- 10 Points Identification
- 10 Points20 Point
ASSIGNMENT # 1 Essay

 Choose one from the guide questions below and answer in essay format (with
introduction, body, and conclusion). Guide questions:

1. What are the different kinds economic system? Give at least 2 each
example.
2. What is the difference of goods and services?