Economics as an Applied Science and as a Social Science.pptx

Applied Economics

1. APPLIED ECONOMICS

2. E conomics is a SOCIAL SCIENCE concerned with the explanation and prediction of observed phenomena in the society. Economics studies the way in the societies solve the fundamental problems of reconciling the unlimited desires of individuals with scarcity of resources , susceptible to numerous alternative uses.

3. Economics is also an APPLIED SCIENCE because it uses the scientific method in its explanations, which consists of observing reality and presenting questions and problems to arrive at the formulation of theories and models. As an applied science, it follows a systematic procedure to solve issues and problems of the society.

4. THE 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 . 2. 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 l iving , unemployment and inflation. Macroeconomics has two types of policies for pursuing these goals: monetary policy and fiscal policy.

5. The Economic Agents/Stakeholders: 1. Consumers Consume goods and services /offer production factors Maximize utility 2. Producers Produce goods / demand productive factors Maximize profit 3. The public sectors Attempt to maximize the well-being of society

6. The agents interact among themselves in a specific territorial, social, natural and/or cultural framework that determines their relationships → Market Agents Interactions Market

7. GOODS Satisfaction It is anything used to satisfy your wants and needs.

8. TANGIBLE GOODS material goods or commodities. INTANGIBLE GOODS when they are in the form of services. Those rendered by doctors, engineers, doctors and other professionals

9. Goods may also be classified according to use.

10. ECONOMIC RESOURCES OR FACTORS economic resources factors of production for goods and services. The factors of production are inputs combinations in the production of goods and services to make an economic profit for the firms. These factors of production are land,labor , capital, and entrepreneurship.

11. Scarce resources and unlimited desires → Scarcity Scarcity and alternative uses → Choice Choice → Opportunity cost Characteristics of Resources: