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    Applied Economics

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    Arianne Lajada Villa
    This document provides an introduction to applied economics. It defines economics as the study of how scarce resources are used to satisfy unlimited wants. There are two main types of resources - natural resources which come from nature, and capital resources which include processed materials and equipment used for production. Economics also examines how individuals and societies make choices about allocating these scarce resources. The field of economics can be divided into microeconomics, which studies individual decision-making and prices, and macroeconomics, which looks at the overall economy. Different economic systems approach resource allocation in various ways, such as traditional economies basing decisions on tradition versus market economies using supply and demand.

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    Applied Economics

    Uploaded by

    Arianne Lajada Villa
    58 views1 page
    This document provides an introduction to applied economics. It defines economics as the study of how scarce resources are used to satisfy unlimited wants. There are two main types of resources - natural resources which come from nature, and capital resources which include processed materials and equipment used for production. Economics also examines how individuals and societies make choices about allocating these scarce resources. The field of economics can be divided into microeconomics, which studies individual decision-making and prices, and macroeconomics, which looks at the overall economy. Different economic systems approach resource allocation in various ways, such as traditional economies basing decisions on tradition versus market economies using supply and demand.

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    This document provides an introduction to applied economics. It defines economics as the study of how scarce resources are used to satisfy unlimited wants. There are two main types of resources - natural resources which come from nature, and capital resources which include processed materials and equipment used for production. Economics also examines how individuals and societies make choices about allocating these scarce resources. The field of economics can be divided into microeconomics, which studies individual decision-making and prices, and macroeconomics, which looks at the overall economy. Different economic systems approach resource allocation in various ways, such as traditional economies basing decisions on tradition versus market economies using supply and demand.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    58 views1 page

    Applied Economics

    Uploaded by

    Arianne Lajada Villa
    This document provides an introduction to applied economics. It defines economics as the study of how scarce resources are used to satisfy unlimited wants. There are two main types of resources - natural resources which come from nature, and capital resources which include processed materials and equipment used for production. Economics also examines how individuals and societies make choices about allocating these scarce resources. The field of economics can be divided into microeconomics, which studies individual decision-making and prices, and macroeconomics, which looks at the overall economy. Different economic systems approach resource allocation in various ways, such as traditional economies basing decisions on tradition versus market economies using supply and demand.

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    of 1

    APPLIED ECONOMICS

    CHAPTER 1 : INTRODUCTION TO APPLIED ECONOMICS

    ECONOMIC as SOCIAL SCIENCE


    What is Economics - As a social science, economics studies how individuals make
    choices in allocating scarce resources to satisfy their
    - Is a social science concerned with using scarce resources to
    unlimited wants.
    obtain the maximum of the unlimited wants of society?
    - Is the study of how societies use scarce resources to produce ECONOMIC RESOURCES – the problem of having unlimited
    commodities and distribute them among different people? wants, but limited resources to satisfy them.
    - Is the study of production, distribution, selling and use of
    goods and services? NATURAL RESOURCES – came from nature that are used in
    - Is the study of how people use their limited resources to try production, including land, raw materials, and natural process.
    to satisfy unlimited wants?
    CAPITAL RESOURCES – the processed materials, equipment,
    SCARCITY – the limited nature of resources, which underlies and building used in production
    the basic economic problem.
    HUMAN RESOURCES – the efforts of people involved in
    -Is a condition where there are insufficient resources to production, including labour and entrepreneurship.
    satisfy all needs and wants of a population.
    NEEDS – the essentials of life, such as food and shelter.
    -is the reason why people have to practice economics.
    WANTS – desires for non-essential items.
    -Economics, as a study, is the social science that involves the
    use of scarce resources to satisfy unlimited wants.

    ALFRED MARSHALL – described economics as 2 BRANCHES OF ECONOMICS


    study of mankind in the ordinary business life. It examines
    part of the individual and social action that is most connected 1. MACROECONOMICS – is a division of economics that
    with the attainment and use of material requisites of well- is concerned with the overall performance of the entire
    being. economy.
    2. MICROECONOMICS – studies the decision and choices
    TYPES OF SCARCITY of the individual units and how these decisions affect the
    prices of goods in the market. It also concerned with the
    1. Relative Scarcity – is when a good is scarce compared process of setting prices of goods that is also known as
    to its demand. Price Theory.
    2. Absolute Scarcity – is when supply is limited.
    ECONOMIC SYSTEM
    CHOICE and DECISION MAKING
    1. Traditional Economy – Decisions are based on
    - Because of the presence of scarcity, there is a need for man to traditions and practices upheld over the years and passed
    make decisions in choosing how to maximize the use of the on from generation to generation. Methods are stagnant
    scarce resources to satisfy as many wants as possible. and therefore not progressive.
    2. Command Economy – This is the authoritative system
    wherein decision-making is centralized in the
    Opportunity Cost – refers to the value of the best forgone alternative. government or a planning committee. Decisions are
    imposed on the people who do not have a say in what
     Land – Soil and natural resources that are found in nature and goods are to be produced.
    are not manmade. Owners of lands receive payment known 3. Market Economy – This is the most democratic form of
    for rent. economic system. Based on the workings of demand and
     Labor – Physical and human effort extended in production. It supply, decisions are made on what goods and services
    covers manual workers like construction workers, machine to produce.
    operators and production workers, as well as professionals
    like nurses, lawyers and doctors.
     Capital – Man-made resources used in the production of
    goods and services which include machineries and
    equipment. The owner of capital earns an income called
    interest.

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