Sheenah R.

Tan
III-BSE Filipino

1. Define Economics.
- the careful use of money, resources, and means of production.
- the system of how money is made and used within a particular country or
region. A region's economy is connected with things like how many goods
and services are produced and how much money people can spend on
these things.
- Economics is the study of how societies, governments, businesses,
households, and individuals allocate their scarce resources.

2. Why study economics is important?

- The study of economics can also provide valuable knowledge for making
decisions in everyday life. It offers a tool with which to approach
questions about the desirability of a particular financial investment
opportunity, the benefits and costs of alternative careers, and the likely
impacts of public policies including universal health care and a higher
minimum wage.

The complementary study of econometrics, the primary quantitative

method used in the discipline, enables students to become critical
consumers of statistically based arguments about numerous public and
private issues rather than passive recipients unable to sift through the
statistics. Such knowledge enables us to ask whether the evidence on the
desirability of a particular policy, medical procedure, claims about the
likely future path of the economy, or many other issues is really
compelling or whether it simply sounds good but falls apart upon closer
inspection.
3. What are the economics resources?

Economic Resources: types and definitions

Economic resource 1: Land

Land is an economic resource that includes all natural physical resources like
gold, iron, silver, oil etc. Some countries have very rich natural resources and by
utilizing these resources they enrich their economy to the peak.

Such as the oil and gas development of North Sea in Norway and Britain or the
very high productivity of vast area of farm lands in the United States and
Canada. Some other developed countries like Japan have smaller economic
resources. Japan is the second largest economy of the world but reliant on
imported oil.

Economic resource 2: Labor

The human input in the production or manufacturing process is known as labor.

Workers have different work capacity. The work capacity of each worker is based
on his own training, education and work experience.

This work capacity is matters in the size and quality of work force. To achieve
the economic growth the raise in the quality and size of workforce is very
essential.
 Economic resource 3: Capital

In economics, Capital is a term that means investment in the capital goods. So,
that can be used to manufacture other goods and services in future.
Following are the factors of capital:

Fixed Capital
It includes new technologies, factories, buildings, machinery and other
equipment.

Working Capital
It is the stock of finished goods or components or semi-finished goods or
components. These goods or components will be utilized in near future.

Capital productivity
New features of capital building, machinery or technology are commonly used to
improve the productivity of the labor. Such as the new ways of farming helps to
enhance the productivity of the agriculture sector and give more valuable jobs in
this sector which motivates people to come out for work.

Infrastructure
It is a stock of capital that is used to maintain the whole economic system. Such
as roads, railway tracks, airports etc.

Economic resource 4: Entrepreneurship

The Entrepreneur is person or individual who wants to supply the product to

the market, in order to make profit. Entrepreneurs usually invest their own
capital in their business. This financial capital is generally based on their savings
and they take risks linked to their investments. This risk-taking can be rewarded
by the profit of the business. Entrepreneurship is, thus, an important economic
resource.

4. Why is there The Need to Choose in Economics?

- Economists engage the world of current affairs. Studying
economics includes learning to use statistics and to read
critically. Economics majors are interesting people both because of their
skills and because they can explain why economic phenomena occur and
how economic performance might improve.
 5. What are the Economics system?

Traditional Economic System

A traditional economic system focuses exclusively on goods and services that are directly
related to its beliefs, customs, and traditions. It relies heavily on individuals and doesn’t
usually show a significant degree of specialization and division of labor. In other words,
traditional economic systems are the most basic and ancient type of economies.

Large parts of the world still qualify as traditional economies. Especially rural areas of
second- or third-world countries, where most economic activity revolves around farming
and other traditional activities. These economies often suffer from a lack of resources.
Either because those resources don’t naturally occur in the region or because access to
them is highly restricted by other, more powerful economies.

Hence, traditional economies are usually not capable of generating the same amount of
output or surplus that other types of economies can produce. However, the relatively
primitive processes are often much more sustainable and the low output results in much
less waste than we see in any command, market, or mixed economy.

Command Economic System

A command economic system is characterized by a dominant centralized power (usually

the government) that controls a large part of all economic activity. This type of economy
is most commonly found in communist countries. It is sometimes also referred to as a
planned economic system, because most production decisions are made by the
government (i.e. planned) and there is no free market at play.

Economies that have access to large amounts of valuable resources are especially prone
to establish a command economic system. In those cases the government steps in to
regulate the resources and most processes surrounding them. In practice, the centralized
control aspect usually only covers the most valuable resources within the economy (e.g.
oil, gold). Other parts, such as agriculture are often left to be regulated by the general
population.

A command economic system can work well in theory, as long as the government uses
its power in the best interest of society. However, this is unfortunately not always the
case. In addition to that, command economies are less flexible than the other systems
and react slower to changes, because of their centralized nature.
Market Economic System

A market economic system relies on free markets and does not allow any kind of
government involvement in the economy. In this system, the government does not
control any resources or other relevant economic segments. Instead, the entire system
is regulated by the people and the law of supply and demand.

The market economic system is a theoretical concept. That means, there is no real
example of a pure market economy in the real world. The reason for this is that all
economies we know of show characteristics of at least some kind of government
interference. For example, many governments pass laws to regulate monopolies or to
ensure fair trade and so on.

In theory, a market economic system enables an economy to experience a high amount

of growth. Arguably the highest among all four economic systems. In addition to that, it
also ensures that the economy and the government remain separate. At the same time
however, a market economy allows private actors to become extremely powerful,
especially those who own valuable resources. Thus, the distribution of wealth and other
positive aspects of the high economic output may not always be beneficial for society as
a whole.

Mixed Economic System

A mixed economic system refers to any kind of mixture of a market and a command
economic system. It is sometimes also referred to as a dual economy. Although there is
no clear-cut definition of a mixed economic system, in most cases the term is used to
describe market economies with a strong regulatory oversight and government control in
specific areas (e.g. public goods and services).

Most western economies nowadays are considered mixed economies. Most industries in
those systems are privately owned whereas a small number of public utilities and services
remain in government control. Thus, neither the private nor the government sector alone
can maintain the economy, both play a critical part in the success of the system.

Mixed economies are widely considered an economic ideal nowadays. In theory, they are
supposed combine the advantages of both command and market economic systems. In
practice however, it’s not always that easy. The extent of government control varies
greatly and some governments tend to increase their power more than necessary.
 6. What are the different tools used in economics?

In brief, get acquainted with the terms such as Variables, Ceteris Paribus, Functions,
Equations, Identities, Graphs and Diagrams, Lines and Curves, Slopes, Limits and
Derivatives, Time Series and so on. These are the basic tools of economic analysis.

7. Differentiate microeconomics and macroeconomics by citing example.

Macroeconomics and microeconomics, and their wide array of underlying concepts,

have been the subject of a great deal of writings. The field of study is vast; so here is a
brief summary of what each covers. Microeconomics is generally the study of individuals
and business decisions, while macroeconomics looks at higher up country and
government decisions.
Microeconomics
Microeconomics is the study of decisions that people and businesses make regarding
the allocation of resources and prices of goods and services. This means also taking
into account taxes and regulations created by governments. Microeconomics focuses
on supply and demand and other forces that determine the price levels seen in the
economy. For example, microeconomics would look at how a specific company could
maximize its production and capacity, so that it could lower prices and better compete
in its industry. (Find out more about microeconomics in How does government policy
impact microeconomics?

Microeconomics' rules flow from a set of compatible laws and theorems, rather than
beginning with empirical study.

Macroeconomics
Macroeconomics, on the other hand, is the field of economics that studies the behavior
of the economy as a whole, not just of specific companies, but entire industries and
economies. It looks at economy-wide phenomena, such as Gross Domestic
Product (GDP) and how it is affected by changes in unemployment, national income,
rate of growth, and price levels. For example, macroeconomics would look at how an
increase/decrease in net exports would affect a nation's capital account or how GDP
would be affected by the unemployment rate.