Applied-Economics_1st-QUARTER_PPT_1.pptx

Presentation in Applied Economics

1. Applied Economics AGNES R. RAMO SHS Teacher II

2. Economics as Social and Applied Science Nature and Scope of Economics Fields of Economics: Microeconomics Macroeconomics

3. This week you are expected to: Define Economics as an Applied Science Differentiate the Fields of Economics: -Microeconomics -Macroeconomics Classify the different resources Identify the Factors of Production

4. Why do we need to budget our money or resources?

5. PRE- ASSESSMENT: Directions: Rearrange the scrambled letters to make a meaningful word. Use the corresponding meaning as a hint to guess the correct answer.

6. PRE- ASSESSMENT: Directions: Find the best word inside the provided word pool that represents right descriptive word for each number

7. REVISITING ECONOMICS There are three strands in the development of the definition of economics. The first focuses on wealth. The second stresses the decision-making process. The third concentrates on the allocation process.

8. REVISITING ECONOMICS Economics as a study of wealth implies wealth utilization for individual’s satisfaction and society’s welfare. As people produce or consume, whether it is wealth- getting or wealth-using, they make decisions which are based on alternative choices. Consistent with the process of making decisions and choices is the process of allocation.

9. ECONOMICS AS A SOCIAL SCIENCE Economics is primarily a social science. As a science it uses scientific method of inquiry. This systematic or scientific method is being used in the study of society and its components. Thus, social science can be described as the study of the various modes and aspects of human interactions in a group as these people aspire to preserve their group as a social unit, to make it stable, and to promote its growth, expansion, and development.

10. ECONOMICS AS A SOCIAL SCIENCE As a social science, economics pertains to the study on how society creates its material wealth, how it makes this wealth available to its people with minimum difficulties, and how it expands its wealth.

11. ECONOMICS AS AN APPLIED SCIENCE What makes economics an applied science is the formulation of general theories through testing, mainly using data from the past. In simpler definition, it is the study of observing how theories work in practice. Applied economics becomes a powerful tool to reveal the true and complete situation in order to come up with things to do.

12. ECONOMICS AS AN APPLIED SCIENCE The use of applied economics is designed to analytically review potential outcomes without the “noise” associated with explanations that are not backed by numbers. Because economics relies on the interpretation of historical events in its theories, applied economics can lead to “to do” lists for steps that can be taken to ensure stability in real world.

13. ECONOMICS AS AN APPLIED SCIENCE

14. There are Two fields of Economics: Microeconomics: -focuses on the behavior of individual economic units and the functioning of markets. - Its perspective focuses on parts of the economy: individuals, firms, and industries

15. There are Two fields of Economics: Macroeconomics: - studies the functioning of economics as an aggregate (production, employment). - Its perspective looks at the economy as a whole, focusing on goals like production, the standard of living, unemployment and inflation. - Macroeconomics has two types of policies for pursuing these goals: monetary policy and fiscal policy.

16. After understanding the Fields of Economics, we will discover the factors of production of goods or services. In order to produce goods or services we need the ingredients or factors of production.

17. The four factors of Production: Capital or capital goods are capital – the money that companies used to buy resources Land - natural resources available to create supply such as raw materials that comes from the ground. Labor is the work done by people- education, skills, and motivation and productivity. Labor is the work done by people, education, skills, and motivation and productivity. Entrepreneurship an idea into a business. An entrepreneur combines the other three factors

18. Land + Labor + Capital + Entrepreneurship Production

19. To give us a clear explanation: let us take as an example your favorite Chicken Joy from one of the leading fast food chain Jollibee. To come up with a product which is fried chicken you need the workers/crew which pertain to labor , to buy machineries or equipment you need capital, Land pertains to the place of the store/business and lastly e ntrepreneurship pertains to the idea of the managers, entrepreneur.

20. Let us try to answer this activity: Picture Analysis: Identify the factors of production of the following pictures:

21. In relation to production particular goods, there are classification of goods according to use these are: CONSUMERS GOODS – goods for the ultimate consumption of the consumers. Ex.: toothpaste, bath soap, etc. CAPITAL GOODS or INDUSTRIAL GOODS - used in the production of other goods and services. Ex.: buildings, machinery, equipment.

22. LUXURY GOODS – goods man may do without, but may give comfort and satisfaction. Ex., perfume, cakes; chocolates, expensive cars. ECONOMIC GOODS –goods which are useful and scarce; with value attached to them and a price has to be paid for their use. - If a good is so abundant and it can satisfy everyone’s needs without anybody paying for it, then, that good is free. The air is free, but the air from an aircon is an economic good.