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Lesson 2
THE NATURE AND SCOPE OF
ECONOMICS
PRE-TEST
I.
2.
3.
4.
5.
ACTIVITY
In front of you are candies that
you could get and eat. Come on,
everybody is invited to get
candies. Do not be shy
ANALYSIS
What
ECONOMICS AS DEFINED
From the Greek words Oikos meaning household
and nomos meaning management
= household management
ECONOMI
CS
The wise production and use of wealth to
meet the demands or needs of the people
ECONOMICS IN OUTLINE
Economics
DEFINITIONS
ADAM SMITH (1723 - 1790),
Father of Economics
DEFINITIONS
ALFRED MARSHALL (1842 - 1924)
DEFINITIONS
LIONEL ROBBINS (1932 -)
DEFINITIONS
SCHOLARLY DEFINITIONS
SCHOLARLY DEFINITIONS
Wants desires
FINALLY
ECONOMICS
CONCERNS OF ECONOMICS
CONCERNS OF ECONOMICS
Economics is concerned with
DISTRIBUTION
Distribution is the allocation of the total
product among members of society. It is
related to the problem of for whom goods
and
services
are
to
be
produced.
Economics is concerned with
CONSUMPTION
Consumption is the use of a good or
service. Consumption is the ultimate end
of economic activity. WHEN THERE IS NO
CONSUMPTION, THERE WILL BE NO NEED
FOR PRODUCTION AND DISTRIBUTION.
HISTORICAL DEVELOPMENT
OF ECONOMICS
DIVISIONS OF ECONOMICS
ECONOMICS
MACROECONOMICS
General, economy as a whole
MICROECONOMICS
Specific
Refers to management of
income, expenditures, wealth or
resources of a nation.
Microeconomics is
the branch of
economics that
examines the
functioning of
individual industries
and the behavior of
individual decisionmaking units that
is, business firms and
households.
Microeconomic
s
Production
Prices
Income
Employment
Production/
Output in
Individual
Industries
and
Businesses
How much
steel?
How many
offices?
How many
cars?
Price of
Individual Goods
and Services
Price of medical
care
Price of gasoline
Food prices
Apartment rents
Distribution of
Income and
Wealth
Wages in the
auto
industry
Minimum
wages
Executive
salaries
Poverty
Employment by
Individual
Businesses &
Industries
Aggregate Price
Level
Consumer prices
Producer Prices
Rate of Inflation
National
Employment
Income
and
Total wages and Unemployment
salaries
in the Economy
Total corporate
Total number of
profits
jobs
Unemployment
rate
Macroeconomic National
s
Production/O
utput
Total
Industrial
Output
Gross
Domestic
Product
Growth of
Output
ECONOMICS AS A SCIENCE
Relations of Economics to
other Sciences
POST TEST
I.
2.
3.
4.
5.
ESSAY
Is Economics a science?
Explain why if yes or why not if no