BASIC

MICROECONOMICS
MR. CRISOLOGO A. DAMAYO, CPA, EMBA
CHAPTER 1 – ECONOMIC HISTORY OF THE
PHILIPPINES
 70’S AND 80’S – PHILIPPINES WAS
AN ECONOMIC POWERHOUSE-
SECOND ONLY TO JAPAN
 CHAPTER 2 –
RESOURCE UTILIZATION
 Definition of Economics
 . . . . .. is the study of how society uses  . . . . The study how societies use
its scarce resources to satisfy unlimited scarce resources to produce valuable
wants and needs. commodities and distribute them
among different people (Samelson and
Norhaus)
 . . . . . studies the allocation of the
scarce means of production toward the
satisfaction of human wants. (Slavin)  . . . . The study of production,
distribution, selling, and use of goods
and services.
 …. . . A social science concerned with
using scarce resources to obtain
maximum satisfaction (Walstad and  . . . . The study of how people use their
Bingham) limited resources to try to satisfy
unlimited wants (Parkin and Bade)
Scarcity and Utility

Scarcityis the imbalance between human

needs and wants and the means of satisfying
them.

Utility
is the total satisfaction received from
consuming a good or service
Concerns of Economics

PRODUCTION

CONCERNS

CONSUMPTION DISTRIBUTION
 PRODUCTION

ENTREPRENE
LAND LABOR WAGE SALARY CAPITAL URIAL
CAPABILITY
 ENTREPRENE
DEFINITION OF TERMS LAND LABOR WAGE SALARY
CAPITA
L URIAL
CAPABILITY

Production – the creation or addition of

utility
Land – includes natural re-sources such as
minerals, oil, coal, soil, water and the
ground in which these resources are found.
 ENTREPRENE
DEFINITION OF TERMS LAND LABOR WAGE SALARY
CAPITA
L URIAL
CAPABILITY

Labor – the work, time and human

effort included in the production
Wage – a compensation based on the
number of hours worked multiplied by
an hourly rate of pay.
 CAPITA ENTREPRENEU
DEFINITION OF TERMS LAND LABOR WAGE SALARY L RIAL
CAPABILITY

 Salary
– a compensation based qouted on a monthly or
annual basis
 Capital– (laymans term) the money used by
entrepreneurs to run their business, (economic term)
human made goods used to produce other goods or
services
 Entrepreneurial
ability –the effort to organize the
production process
  Theallocation of the total
DISTRIBUTION product among factors of
production
CONSUMPTION

IS THE UTILIZATION
OF A GOOD OR A
SERVICE FOR ONE’S
VERY OWN
SATISFACTION.
OPPORTUNITY COSTS

THE FORGONE VALUE OF

THE NEXT BEST
ALTERNATIVE – THE
VALUE OF THINGS WE
GIVE UP
FULL EMPLOYMENT AND
FULL PRODUCTION
 FULL A SOCIETY’S AVAILABLE
HUMAN RESOURCES ARE
EMPLOYMENT BEING MAXIMIZED
EFFICIENTLY
 FULL WHEN RESOURCES ARE
BEING ALLOCATED IN
PRODUCTION THE MOST EFFICIENT
MANNER
 LAW OF AS THE OUTPUT OF
ONE GOOD EXPANDS,
INCREASING THE OPPORTUNITY
COST OF PRODUCING
COST ADDITIONAL UNITS OF
THIS GOOD INCREASES.
 AN INCREASE IN THE
CAPACITY OF AN
ECONOMIC ECONOMY TO PRODUCE
GOODS AND SERVICES,
GROWTH COMPARED FROM ONE
PERIOD OF TIME TO
ANOTHER.
 A
S
S
E
S
S
M
E
N
T
1. THE CREATION OR ADDITION
OF UTILITY IS CALLED _____

A. SCARCITY
B. WAGE
C. PRODUCTION
D. EMPLOYMENT
2. A COMPENSATION QUOTED ON
AN MONTHLY OR ANNUAL BASIS ?

A. SALARY
B. WAGE
C. LABOR
D. WORKER
3.HAPPENS WHEN RESOURCES ARE BEING
ALLOCATED IN THE MOST EFFICIENT MANNER

 A. FULL EMPLOYMENT
 B. FULL PRODUCTION
 C. DISTRIBUTION
 D. CONSUMPTION
4. THE ALLOCATION OF THE TOTAL PRODUCT
AMONG FACTORS OF PRODUCTION ____

A. PRODUCTION
B. DISTRIBUTION
C. CONSUMPTION
D. CONCERNS OF ECONOMICS
5. IT IS THE WORK, TIME AND HUMAN
EFFORT INCLUDED IN THE PRODUCTION__
A. LAND
B. LABOR
C. HUMAN DESIRES
D. WANTS
 Thank You!