APPECO LESSON 1 Flashcards
A SOCIAL SCIENCE concerned with the explanation & prediction of
observed phenomena in the society.
Economics
It studies the way in the societies solve the fundamental problems of
reconciling the unlimited desires of individuals with scarcity resources,
susceptible to numerous alternative uses.
Economics
is also an APPLIED SCIENCE because it uses the scientific
method in its explanations, which consists of observing reality & presenting
questions & problems to arrive at the formulation of theories & models
Economics
As an applied science, it follows a systematic procedure to solve issues &
problems of the society.
Economics
The Fields of Economics (2)
A. Microeconomics
B. Macroeconomics
Studies of markets of good & services.
Microeconomics
– Focuses of the behavior of individual in the market.
Microeconomics
– Explains how & why these units make economic.
Microeconomics
Studies the economy as a whole.
B. Macroeconomics –
Focuses on aggregate indicators (such as production,
employment, etc.)
B. Macroeconomics –
The Economics Agents/Stakeholders:
(3)
- Consumers:
2.Producers:
3.The Public Sectors:
: Consume goods & services/offer production factors; Maximize
utility.
Consumers
Produce goods/demand productive factors; Maximize profit.
- Producers:
: Attempt to maximize the well-being of society.
- The Public Sectors
: Material goods or commodities.
Tangible Goods
: When they are in the form of services. Those rendered by
doctors, engineers, & other professionals.
Intangible Goods
: Goods for the ultimate consumption of the consumers.
(e.g., toothpaste, bath soap, etc.)
Consumer Goods
: Used in the production of other goods &
services. (e.g., buildings, machinery,
equipment.)
Capital Goods/Industrial Goods
: used to satisfy the basic needs of man. (e.g., food &
medicine)
Essential Goods
: Goods man may do without, butt may give comfort &
satisfaction. (e.g., perfume, cakes, chocolates, expensive
cars)
Luxury Goods
: Goods which are useful & scarce; with value attached to
them & a price has to be paid for their use. If a good is so
abundant & it can satisfy everyone’s needs without
anybody paying for it, then, that goods if free. The air is
free, but the air from an aircon is an economic goods.
Economic Goods
Factors of Production (4)
- land
- labour
- capital
- entrepreneurship
Land is the natural resources available to create supply such as raw materials
that comes from the ground. It can be a non-renewable resource; commodities
such as oil & gold; & renewable resource, such as timber. Oil is a natural
resource, but petroleum gas is a capital good. Farmland is a natural resource,
but a shopping center is a capital good.
I. Land as a Factor of Production
Labor is the work done by people: education, skills, & motivation & productivity.
Productivity measures how much each hour of worker time produces in output.
Workforce receives wage for his labor.
II. Labor as a Factor of Production
Capital or capital goods are capital – the money that companies used to buy
resources; man-made objects like machinery, equipment, & chemicals that are
used in production. For example, capital goods include industrial & commercial
buildings. A commercial aircraft is an example of a capital good.
III. Capital as a Factor of Production
Entrepreneurship develops an idea into a business. An entrepreneur combines
the other three factors of production to add to supply. The most successful
entrepreneurs are innovative & risk-takers. The income entrepreneurs earn its
profits
IV. Entrepreneurship as a Factor Production
Characteristics of Resources (3)
- scarcity
- multiple use
- partially replaceable
o Insufficient resources to supply all the desires & needs of individuals.
In the production of goods & services;
- Scarcity
there are issues that economics may encounter, these include: for
Land – inadequate land & natural resources; polluted areas;
overcrowded spaces; for Labor – unskilled workforce; mismatch of
jobs; for capital – low quality of equipment/machines; insufficient
fund/capital; & for entrepreneurship – inadequate training of
entrepreneurs; limited opportunity; scarcity of great ideas but many
competitors in the market.
- Scarcity
o Resources can have more than one possible use. For example, a plot
of land can be used to plant coffee or to build a factory.
- Multiple Use
o One resource scan replace another in the production of a good or
service (e.g., replace manual labor with technology).
- Partially Replaceable
