Basic terms in economics

basic terms in economics

1. BASIC TERMS IN ECONOMICS Ena Josel F. Portillo

2. Economics – a social science concerned with man’s problem of using scarce resources to satisfy human wants. Consumer Goods – goods that yield satisfaction directly, just like softdrinks and food. Capital Goods – goods used in the production of other goods and services. Ex. Buildings, machinery, and equipment Essential Goods – goods that are used to satisfy the basic needs of man such as food, shelter, and medicine. Luxury Goods – are those goods man may do without, but are used to contribute to his comfort and well-being. Ex. Perfumes, chocolates, luxury cars

3. Economic Good – a good which is both useful and scarce. It has a value attached to it and a price has to be paid for its use. Free Good- a good that is abundant that there is enough of it to satisfy everyone’s needs without anybody paying for it.

4. GOODS are created by means of PRODUCTION

5. ECONOMIC RESOURCES (FACTORS OF PRODUCTION) Land Labor Capital Entrepreneur

6. SCARCITY refers to the limitations that exist in obtaining all the goods and services that people want. It gives rise to economic problems.

7. THREE QUESTIONS (3) BASIC TO ALL ECONOMIES What to produce and how much? How shall goods be produced? For whom shall goods be produced?

8. TYPES OF ECONOMIC SYSTEM 1. Traditional Economy – This is basically a subsistence economy. A family produces everything that it consumes.

9. 2. Command Economy – The means of production are owned by the government. Its decisions are arrived at by government economic planners.

10. 3. Market Economy – The basic characteristic of this economy is that resources are privately owned and decisions are made by the people themselves.

11. 4. Mixed Economy – a combination of two or more economic system.

12. USA CUBA PHILIPPINES

13. Reference FUNDAMENTALS OF ECONOMICS (Revised Edition) Roman D. Leaño , Jr. Ronald M. Corpuz

14. THANK YOU!