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Introduction to Economics Concepts

Economics is the social science that deals with how scarce resources are allocated to satisfy unlimited human wants. It has two main branches: microeconomics, which studies individual economic units like households and firms, and macroeconomics, which focuses on aggregate measures of the whole economy. Economics uses frameworks, assumptions, and models involving math, graphs, and equations. It also distinguishes between positive economics, which analyzes what is, and normative economics, which makes judgments on what should be.

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10 views5 pages

Introduction to Economics Concepts

Economics is the social science that deals with how scarce resources are allocated to satisfy unlimited human wants. It has two main branches: microeconomics, which studies individual economic units like households and firms, and macroeconomics, which focuses on aggregate measures of the whole economy. Economics uses frameworks, assumptions, and models involving math, graphs, and equations. It also distinguishes between positive economics, which analyzes what is, and normative economics, which makes judgments on what should be.

Uploaded by

Quinnee Vallejos
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© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ECONOMICS 11

LECTURE 1:
INTRODUCTION
What is Economics?
Methodology of economics
Framework
Assumptions (e.g., ceteris paribus)
Models (math, graphs, equations)
It is a social science
that deals with the allocation Human
Natural
of scarce resources Physical

to satisfy unlimited
human wants.
Origin of the word Economics

Oikonomia
Greek word that means
household management
Two Main Branches
Microeconomics
- studies behavior of individual economic
units
- households, firms, markets
Macroeconomics
- Focus is on the whole/aggregate economy
- E.g., GNP, GDP, inflation, unemployment
Positive vs. Normative Economics
Positive Economics
Answers the question: What is?
The price of gasoline is Php 42.90/liter.
The population growth rate is 2.3%.
11 million Filipinos live on $1 a day.
Normative Economics
Answers the question: What should be?
The price of gasoline should be Php 40.0/liter.
The population growth rate must only be at 2
%.
Filipinos ought to live on at least $5 a day.

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