Lesson 1 Flashcards
(42 cards)
is a social science that deals with the efficient allocation of scarce resources to satisfy the unlimited human wants and needs
Economics
To address this fact, economists and non economists are eventually guided by five basic economic questions, namely:
- What to produce?
- How many and how much to produce?
- How to produce?
- For whom to produce?
- At what price to produce?
is a question of the types of goods society desires. Will a country produce rice, coconuts, bananas? Since resources are scarce, no economy can produce every product desired by members of society?
What to Produce?
A question that refers to the quantity of each good that will have to compose the total output. Example, if rice is decided to be produced, how much should the total output be?
How many or how much to produce
is a question on the technique of production and the manner of combining resources to come up with the desired output.
How to produce
a question refers to the market to which the producers will sell their products. It refers to how much of the wants of each consumer are to be satisfied.
For whom to produce
Answering the final question entails determining how much the consumers are willing pay for a product and if the price is agreeable on the part of the producer.
At what price to produce?
The first activity is known as the
Production activity
This directly addresses the basic economic questions of what to produce, how many and how much to produce, and how to produce.
Production activity
Primary and necessary items needed for man to survive.
Basic goods
Items that are desired by man to have a more comfortable way of life, but are not necessary to his survival, often expensive and not easy to acquire.
Luxury Goods
Items that are desired by man to have a more comfortable way of life, but are not necessary to his survival, often expensive and not easy to acquire.
Luxury Goods
Goods that are provided by the government for the benefit of its constituents
Public Goods
Goods that are normally abundant and do not need to be paid for.
Free goods
Goods that are normally produced or are scarce, requiring a certain payment for their consumption
Economic goods
Production can be classified into two:
Labor-intensive production and capital-intensive production
production requires more of the human skills
Labor-Intensive Production
requires more of the machineries and other resources to produce goods and services.
Capital-Intensive Production
The second economic activity is known as
Distribution
It directly addresses the question, “For whom to produce?”. It focuses on how the products will reach the ultimate consumer. Non-conventional way of transporting such as kalesa, pushcarts and the likes are still the cheapest but slowest way. The conventional way which includes air cargo, ships and the like is more expensive but is much faster.
Distribution
the third economic activity which is designed to facilitate the transfer of goods or service from the producer to the consumer.
Exchange
The final (4) economic activity is
Consumption
where the ultimate consumer now gets to enjoy the goods or services he or she has bought. The satisfaction derived from ___________ of a good or service is generally called utility. Normally, the higher the utility of a good, the higher the satisfaction a consumer gets.
Consumption
Generally, there are at least four basic factors used in any production process, regardless of the types of production facility an enterprise has, This is so-called,
CELL
CAPITAL-Interest
ENTREPRENEURSHIP -Profits
LAND RENT NATURAL RESOURCES-Rent
LABOR-Salaries and wages