Notesale: Turn your study into money

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APPLIED ECONOMICS
(Brief Notes by Apole, Noella Joy S
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- is a social science because it studies human behavior just like Psychology and
Sociology
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As a Social Science, Economics studies how individuals make choices in allocating scarce
resources to satisfy their unlimited wants
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It studies economic system as a whole rather
than the individual economic units that make up the economy
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Microeconomics - is concerned with the behavior of individual entities such as the
consumer, the producer, and the resource owner
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It is also concerned with the process of
setting prices of goods that is also known as PRICE THEORY
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SCARCITY
-is a condition where there are insufficient resources to satisfy all the need and wants
of a population
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It occurs not
because the good is scarce per se and is difficult to obtain but because of the
circumstances that surround the availability of the good
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It explains why there are some
products that are very expensive in the Philippines
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Opportunity Cost - refers to the value of the best forgone alternative
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In making a choice, trade-offs are involved
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BASIC ECONOMIC PROBLEMS OF THE SOCIETY
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What to produce?

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How to produce?

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For whom to produce?

ECONOMIC SYSTEMS
-The economic system is the means through which society determines the answers
to the basic economic problems mentioned
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Command Economy - this is the authoritative system wherein decision-making is
centralized in the government or a planning committee
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Based on
the workings of demand and supply, decisions are made on what goods and services
to produce
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Economics will help the
students understand why there is a need for everybody, including the government, to
budget and properly allocate the use of whatever resources are available
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MEASURING THE ECONOMY
-The heart of economy is production whose value measures both resource input and
output of people
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ECONOMIC RESOURCES
-also known as factors of production, are the resources used to produce goods and
services
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Owners of lands receive a payment known as RENT
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It covers manual workers
like construction workers, machine operators, and production workers, as well as
professionals like nurses, lawyers and doctors
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Capital - man-made resources used in production of goods and services, which
include machineries and equipment
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GNP vs
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Market value is determined by supply and
demand
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Not
all resources belonging to the economy are in the economy
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Net Inflow = Inflow - Outflow - Net Inflow = - Inflow + Outflow

John Neville Keynes - first to use the phrase “APPLIED ECONOMICS” to designate the
application of economic theory to the interpretation and explanation of particular
economic phenomena

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