ECONOMICS

ITS MEANING AND IMPORTANCE

DIFFERENT DEFINITIONS OF ECONOMICS

What is ECONOMICS? is a discipline concerning proper allocation, utilization, and efficient use of scarce resources to attain the maximum satisfaction of human beings refers to the production, distribution, and use of material goods and services

DIFFERENT DEFINITIONS OF ECONOMICS

What is ECONOMICS?
is an equity into the nature and causes of

the wealth of the nations Adam Smith

DIFFERENT DEFINITIONS OF ECONOMICS

ECONOMICS as SCIENCE systematic and organized body of knowledge gather data analyze facts draws conclusion

DIFFERENT DEFINITIONS OF ECONOMICS

ECONOMICS as SOCIAL SCIENCE studies how people manage to make use of available resources to satisfy their needs deals with peoples interaction with others that affects the utilization of material resources

ELEMENTS OF ECONOMICS TWO ELEMENTS OF ECONOMICS 1. GOOD/S is/are anything which yields satisfaction to someone. -- material goods or commodities (tangible)

ELEMENTS OF ECONOMICS Classification of according to its use: CAPITAL / PRODUCER GOODS used in the production of other goods example : buildings, equipment, machinery CONSUMER GOODS yield satisfaction directly to the end user example : soft drinks

 Classification of according to its purpose: ESSENTIAL / BASIC GOODS these are used to satisfy the great level needs of men LUXURY GOODS items that man may do live without, but are used to contribute to his comfort and well being

ELEMENTS OF ECONOMICS Classification of according to its availability: ECONOMIC GOODS good which is both useful and scarce, has a value attached to it

FREE GOODS good is so abundant that there is enough of it to satisfy everyones needs without paying for it
example : air, water

ELEMENTS OF ECONOMICS TWO ELEMENTS OF ECONOMICS 2. SERVICES or GOODWILL are intangible rendered by individual or groups used in the satisfaction of human wants example : doctors, teachers, painters

GOODS AND SERVICES

FREE GOODS

ECONOMIC GOODS

TANGIBLE

INTANGIBLE

TANGIBLE
WEALTH

INTANGIBLE

PRODUCER GOODS
LAND, BUILDING, MACHINERY

CONSUMER GOODS

BASIC GOODS

LUXURY GOODS

DIVISION OF ECONOMICS TWO DIVISIONS: 1. MICROECONOMICS division that studies the economy in parts, its price system, individual consumer and individual firm what determines the relative prices of goods what determines the breakdown of national income aggregates into various types of goods and services

DIVISION OF ECONOMICS TWO DIVISIONS: 2. MACROECONOMICS division that deals with aggregates. It studies the economy as a whole. It presents pictures of totals:
income output of goods/services employment pricing level

GENERAL ECONOMIC RESOURCES 1 . LAND refers to all natural resources e.g. soil, rivers, forest 2 . LABOR is any form of human efforts exerted in the production of goods and services 3 . CAPITAL refers to man-made goods used in the production of goods and services