1. principles of economics (1)

8/17/2019 1. Principles of Economics (1)

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THE BASICS OFECONOMICS

By: Sam D. FuegoSocial Sciences Department

Ateneo e !am"oanga #ni$ersity


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De%nitions o& Economics

T'e science t'at eals (it' t'e actions o&ini$iuals an societies irecte to(armeeting certain ens in a (orl ('ere

t'e means necessary to meet t'ose ens'a$e alternati$e uses )*oger A. Arnol+Economics,.

T'e (ise prouction an use o& (ealt' tomeet eman or nees o& ini$iuals orgroups o& people )Sonia M. !aie+ LivingEconomics,.


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De&. o& economics-cont.

T'e stuy o& 'o( people an society en upc'oosing+ (it' or (it'out t'e use o& money+to employ scarce proucti$e resources t'at

coul 'a$e alternati$e uses+ to prouce$arious commoities an istri"ute t'em &orconsumption+ no( or in t'e &uture+ among$arious persons an groups in society.

It analyes costs an "ene%ts o& impro$ingpattern o& resource allocation )/aulSamuelson+ Economics,.


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De&. o& economics-cont.

A classical "oy o& 0no(lege concerning'uman relations'ips clustere a"outman1s e2orts to earn a li$ing )Cli2or 3.

4ames+ Principles of Economics,. Concerns situations in ('ic' c'oices

must "e mae a"out 'o( to use limiteresources+ ('en to use t'em an &or('at purposes )*oger 3e *oy Miller+Economics, Today and Tomorrow,.


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De&. - cont

Is concerne (it' t'e prouction+istri"ution+ an use o& materialgoos an ser$ices ) 3loy 5.*eynols+ Economics anIntroduction,.

A science t'at is concerne (it' t'e

prouction+ istri"ution+ anconsumption o& goos an ser$ices)T'omas 4. Hailstones+ Basic

Economics,.


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De&. o& econ 6 cont.

5eraro /. Sicat+ Economics+ e%nest'e term as: 7a scienti%c stuy ('ic'eals (it' 'o( ini$iuals ansociety generally ma0e c'oice8.


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A Social Science t'at eals an see0sto allocate scarce 'uman an non-'uman resources among t'eiralternati$e uses in orer to satis&y'uman unlimite (ants an ser$ices)9illegas+ Bernaro M.+ 5uie to

Economics &or Filipinos,.


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ey Concepts

Scarcity• Means t'at our (ants outstrip t'e limite

resources a$aila"le to satis&y t'ose (ants at

any point in time.• *esources suc' as time+ lan+ la"or+ an t'e

li0e+ are in limite supply.


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C'oice• Scarcity implies c'oice. A secon

&unamental iea o& economics is t'at

scarcity &orces people to ma0e c'oices"et(een alternati$e uses &or t'eirresources.

• T'is is as true &or t'e consumer trying to

ecie 'o( to spen 'is;'er last &oo pesoas it is &or t'e manu&acturer trying to ecie('et'er to 'ire aitional la"or or purc'asea ne( mac'ine instea.


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Opportunity Cost• A t'ir "asic concept is t'at c'oice implies

opportunity cost.

• De%ne as t'e $alue o& t'e "est alternati$e&oregone ('en ecision is mae.


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T'ings in common


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Comes &rom t'e 5ree0 (oroikonomia, ('ic' means 7'ouse'olmanagement8 or running a'ouse'ol.

Ho(e$er+ (it' t'e gro(t' o& t'e5ree0 Society until its e$elopment

into 6 city states+ t'e sai 5ree0 (or"ecame 0no(n as 7statemanagement8.


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Economics emerge only in >? as aistinct iscipline or science.

It (as Aam Smit' ('o (asresponsi"le &or t'e recognition o&economics as a separate "oy o&0no(lege.

7An In@uiry into t'e nature ancauses o& (ealt' o& nations8+pu"lis'e in >?+ "ecame t'e "i"le

o& economics &or a 'unre years.


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Its immeiate o"ecti$e (as to o$ert'ro(mercantilist p'ilosop'y ('ic' 'el s(ay notonly in France "ut also in Englan.

In $ie( o& 'is monumental contri"ution to t'e%el o& economics+ Aam Smit' 'as "een'onore as t'e 7Fat'er o& Economics8.

Contri"utions: Economic policies suc' as:


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1. principles of economics (1)

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