Lesson I - Introduction to Economics

8/18/2019 Lesson I - Introduction to Economics

1/31

LESSON I:LESSON I:Introduction toIntroduction to

EconomicsEconomics

MS. MARY GRACE P.MS. MARY GRACE P.

RONQUILLORONQUILLOFaculty, Department of EconomicsFaculty, Department of Economics

ECONOMICSECONOMICS


2/31

Learning Objectives:

Defne Economics;

Discuss the schools o thought in Economics;

Dierentiate Microeconomics rom Macroeconomics;

Distinguish Normative Statement rom Positive

Statement;Explain the relationship o Economics to other Sciences;

Determine the importance o 3Es in Economics;

Explain the our economic questions and the actors o

production;Discuss the dierent inds o Economic S!stem;

"race the #ircular $lo% o &ncome and 'utput; and

Explain the concept o opportunit! cost in maingeconomic decisions(


3/31

What is Economics?

Defnition: is a S'#&)* S#&EN#E %hich deals%ith the stud! o proper and e+cient use o

S#),#E resources in the P,'D-#"&'N.D&S",&/-"&'N. E0#1)N2E and #'NS-MP"&'No #'MM'D&"&ES or the satisaction o-N*&M&"ED NEEDS and )N"S o men(

Etymology: comes rom the t%o 2ree %ords4 oikos and nomus( & com5ined. it 5ecomesoikonomia or oikonomus %hich meanshousehold management(


4/31

What is the problem o S!"I#$?


5/31

Di%erentiate nee&s rom 'ants(

Necessar!and

EssentialElementsDesigned orSurvival

Which

!re notNecessar!#oSurvive


6/31

What are the o)r basic economic

activities?


7/31

What are commo&ities?


8/31


9/31

School o #ho)ght Estimate&

+erio&

*ajor +roponent,s

7( Mercantilism 7899:799 "homas Mun

9 )dam Smith. David ,icardo. ?ean /aptiste Sa!. "homas

Malthus. David 1ume a( Marxism @arl Marx

5( -tilitarianism ?erem! /entham. ?ohn StuartMill

A( Neo:#lassical

Economics

7>9:7B99 illiam Stanle! ?evons.

#arl Menger. *eon alras a( Marginalism )lred Marshall

5( &nstitutionalism "hornstein Ce5len

8( @e!nesian Economics 7B97:7B39 ?ohn Ma!nard @e!nes

( Monetar! Economics 7B37: 7B9 Milton $riedman


10/31


11/31


12/31


13/31


14/31


15/31


16/31


17/31


18/31

School o#ho)ght

Economist *ajor ontrib)tions

7( Mercantilism "homas Mun frst idea o mercantilism


19/31

School o#ho)ght

Economist *ajor ontrib)tions

A( Neo:#lassical

Economics

)lred Marshall theor! o marginal utilit!

and marginalproductivit!

illiam Stanle! ?evons

theor! o value

#arl Menger theor! o value. priceand distri5ution. theor!o diminishing marginalreturns

*eon alras general equili5rium

theor! "hornsteinCe5len

theor! o the leisureclass

8( @e!nesianEconomics

?ohn Ma!nard@e!nes

mone! suppl!. generaltheor! o emplo!ment.

interest and mone!.


20/31

Disting)ish normative statement

rom positive statement(


21/31

+ractice E-ercises:Determine 'hether the ollo'ingstatements are normative or positive(

• "he Philippines is a developing countr!(

+OSI#I.E

• &ncreasing the taxes %ould result to a higher revenueor the government(

NO"*!#I.E

• #hina is no% 5etter than -S) in terms o economic

gro%th( NO"*!#I.E

• MaForit! o the *P- students 5elong to the #ollege o&nternational "ourism and 1ospitalit! Management(

+OSI#I.E


22/31

+ractice E-ercises:

Determine 'hether the ollo'ingstatements are normative or positive(

• Mann! Pacquiao is the highest paid athlete inthe %orld(

+OSI#I.E

• Economics is the queen o all social sciences(

NO"*!#I.E

• 2lo5aliGation is the e! to end povert!( NO"*!#I.E

• ,eproductive 1ealth /ill should 5e a5olished(

NO"*!#I.E


23/31

/o' is Economics relate& to otherSciences?


24/31

What are the 0 Es in Economics?


25/31

-nlimited

Needs andants

Pro5lem oScarcit!

"raditionalEconom!

1o)r Economic2)estions:hat to produceH1o% to produceH

1o% much to produceH$or %hom to produceH

#ommandEconom!

MaretEconom!

*imited,esources

MixedEconom!


26/31


27/31

Opport)nity ost 3 is the cost

expressed in terms o the next 5estalternative sacrifced(

S!"I#$

0

I

/OIE I

O++O"#4NI# $ OS#

#ra&e3o% 3 is a situation in %hich

more o one thing can 5e o5tained 5!giving o another thing(


28/31

Economic Systemreers to a set

o economicinstitutions

that dominatea giveneconom! %iththe o5Fective

o solving the5asiceconomicpro5lems(


29/31

haracteristics

#ra&itionalEconomy

omman&Economy

*ar5etEconomy

*i-e&Economy

,esource)llocation Done 5! theelder leaders Done 5! thegovernment Done 5! theprivate sector Done 5! 5oththegovernmentand privatesector

DecisionMaing

/ased onculture.tradition andreligion

/ased oncentralplanning 5!thegovernment

/ased on the5ehavior o5u!ers andsellers

/ased on5u!ers andsellers as %ellas thegovernment

Means oProduction

Managed 5!communalo%nership

Managed 5!thegovernment

throughvariouscommittees

Managed ando%ned 5! theprivate sector

%ith littlegovernmentintererence

/ased on thegovernmentor private

sector

Example#ountries

Mongolia.)ghanistan

North @orea.#u5a

Singapore.1ong @ong.#hina

-S). S%eden. ?apan.Philippines


30/31

#he #hree IS*S


31/31

#he irc)lar 1lo' o Income an&O)tp)t

in6o' 7 o)tp)t

o)t6o'

Lesson I - Introduction to Economics

Documents

Transcript of Lesson I - Introduction to Economics