Lesson 1 Flashcards
Economic
economics is a SOCIAL SCIENCE concerned with the explanation and prediction of observed phenomena in the society.
The word
‘economics’ comes from
two Greek words, ‘eco’
meaning home and ‘nomos’
meaning accounts.
The fields of economic
Microeconomics and macroeconomics has perspectives on the economy
Microeconomics
focuses on the behavior of individual economic units and the functioning of markets. Its perspective focuses on parts of the economy: individuals, firms, and industry
Discuses the following:
• Price of rice
• Number of workers in a certain firm
• Income of Mr.fu
• Expenditures of PLDT
Macroeconomics
deals with economic behavior of the whole economy or economics as an aggregate (composed of individual units).
AGGREGATES: Business, Government, Households
Economic as a process
Unlimited wants > Scarcity > Make choices
Economics as a social science
It deals with the study’s of human’s life and how to live with other men.
Price theory
(The economic agent/stakeholders
Producers - Firms who make goods/services
Government - collect tax and spending on public
Consumers - individuals/households who purchased goods and services
What to produce
PRODUCTS- something you can
see and feel. It is something you
can use.
SERVICE- something is done for
someone else. Sometimes people
are paid for their service,
sometimes they are not
CLASSIFICATION OF PRODUCTS/GOODS
1.Consumer Goods
2.Essential Goods
3.Economic Goods
4.Capital/Industrial Goods
5.Luxury Goods
Consumer Goods
Goods for the ultimate consumption of the consumers
• Durable – Span of three years include
• Non-Durable – Life Span of Fewer
• Services - an act or use for which a consumer,
firm, or government is willing to pay
Types of consumer goods
• Convenience Goods – Goods consumed and purchased
regularly.
• Shopping Goods – Goods that require more thought and
planning
• Specialty Goods – Goods that are more expensive and
cater to a niche market.
• Unsought Goods – Goods purchased by some consumers
to serve a specific need.
Essential Goods
Used to satisfy the basic needs
of man
ex: food and medicine
economic goods
Goods that are useful and scarce; with value
attached to them and a price has to be paid for
their use. If a good is abundant and can satisfy
everyone’s needs without anybody paying for it,
then, that good is free. The air is free, but the
air from an aircon is an economic good.
Capital/industrial goods
Used in the production of other
goods and services
Luxury goods
Are goods man may do without but may give comfort and satisfaction.
Four Factors Of Production
Land
Capital
Labor
Entrepreneurship
