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Economics Lecture notes, Lecture notes of Economics

Economics

Lecture notes in Economics, summarize and with key points

Typology: Lecture notes

2022/2023

Available from 07/01/2025

Kaye__Jo 🇵🇭

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pg. 1

ECONOMICS

A. ECONOMICS

A SOCIAL SCIENCE concerned with using

scarce resources to obtain the maximum

satisfaction of the unlimited

material wants of society.

B. WORLD ECONOMISTS

B.1. Classical Economists

ADAM SMITH

• Father of Economics

• Father of Capitalism

• Laissez Faire “Let alone”

• The state should never interfere

with the private sector

• The Invisible Hand- there are

unforeseen factors that move the

economy. If people act in their best

interest, it will be beneficial for the

economy.

DAVID RICARDO

• Law of Comparative Advantage

• Countries can benefit from

international trade by specializing in

goods with lower opportunity cost.

• The one with the best package has

the comparative advantage

DAVID RICARDO

• Law of Diminishing Marginal Return

• Adding an additional factor of

production will result to smaller

increases in output

THOMAS MALTHUS

• Malthusian Theory

• As population increases, the food

supply decreases.

• The population increases faster than

the increase in the supply of food

B.2. Neoclassical Economists

JOHN MAYNARD KEYNES

• Father of Macroeconomics

• General theory of employment,

interest and money

• The state has the larger function of

maintaining balance in the economy

through its expenses.

KARL MARX

• Father of Communism

• The government should own and

manage the State’s resources

• Das Capital and Communist

Manifesto

• UTOPIA- Perfect society with

absolute equality

ALFRED MARSHALL

• Law of Diminishing Marginal Utility

• As consumption increases, the

marginal utility decreases.

• The first unit of consumption is

highest.

• As utility increases, the marginal

utility decreases.

C. DIVISION OF ECONOMICS

MICROECONOMICS

• Concerned with the behavior and

activities of specific economic units-

individual, household, firms etc.

• The central concept is the market.

MACROECONOMICS

• Concerned with the behavior of the

economy as a whole with respect to

output, income, price level, foreign

trade, unemployment and other

aggregate economic variables.

• The central concept is aggregate.

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ECONOMICS

A. ECONOMICS

A SOCIAL SCIENCE concerned with using scarce resources to obtain the maximum satisfaction of the unlimited material wants of society. B. WORLD ECONOMISTS B.1. Classical Economists ADAM SMITH

Father of Economics
Father of Capitalism
Laissez Faire “Let alone”
The state should never interfere with the private sector
The Invisible Hand- there are unforeseen factors that move the economy. If people act in their best interest, it will be beneficial for the economy. DAVID RICARDO
Law of Comparative Advantage
Countries can benefit from international trade by specializing in goods with lower opportunity cost.
The one with the best package has the comparative advantage DAVID RICARDO
Law of Diminishing Marginal Return
Adding an additional factor of production will result to smaller increases in output THOMAS MALTHUS
Malthusian Theory
As population increases, the food supply decreases.
The population increases faster than the increase in the supply of food B.2. Neoclassical Economists JOHN MAYNARD KEYNES
Father of Macroeconomics
General theory of employment, interest and money
The state has the larger function of maintaining balance in the economy through its expenses. KARL MARX
Father of Communism
The government should own and manage the State’s resources
Das Capital and Communist Manifesto
UTOPIA- Perfect society with absolute equality ALFRED MARSHALL
Law of Diminishing Marginal Utility
As consumption increases, the marginal utility decreases.
The first unit of consumption is highest.
As utility increases, the marginal utility decreases. C. DIVISION OF ECONOMICS MICROECONOMICS
Concerned with the behavior and activities of specific economic units- individual, household, firms etc.
The central concept is the market. MACROECONOMICS
Concerned with the behavior of the economy as a whole with respect to output, income, price level, foreign trade, unemployment and other aggregate economic variables.
The central concept is aggregate.

D. THE ECONOMIC RESOURCES/

PRODUCTIVE RESOURCES

LAND

One factor of production which include land used for agricultural or industrial purposes as well as natural resources found above or below the soil. Ex: Natural Resources LABOR
Productive services embodied in human physical efforts, skill and intellectual powers. It consists of human time consumed in production. Ex: Teaching CAPITAL
Durable goods produced in order to produce other goods. This consists of machineries, factories, offices. Ex: Washing machine for laundry shop ENTREPRENEURIAL ABILITY
Ability of an entrepreneur to produce the required goods and services and the deciding power of businessmen to implement the right combination of the three other factors of production. Ex: Businessman deciding whether to hire or not additional employee’s. E. ECONOMIC SYSTEMS MARKET (CAPITALISM)
Economic system characterized by private individuals owning and operating the majority of the businesses that produce goods and services (free market). COMMAND (COMMUNISM)
A society in which the government owns all the nation’s resources.
This is the direct opposite of Communism. The rights of capitalism which are private properties, profits are not allowed.

MIXED

Has an element of more than one economic systems. It contains both private and state owned enterprises. F. MARKET MARKET
A place where the producers (sellers) and the consumers (buyers) meet.
This is where the producers and consumers agree on the procurement and exchange of goods and services.
It is where people (buyer) are left alone with the businessmen (seller) to make their transactions. FORMS OF MARKET ORGANIZED
A form of market where the buyers and sellers meet at a specific time and place. LESS ORGANIZED
A form of market where the buyers and sellers do not meet at a specific time and place. Market that could be available anytime, anywhere. COMPETITION
An instance when two or more “sellers” offering same goods or services to “buyers” provide distinct offers to make sales. MARKET STRUCTURES Pure (perfect) Competition
Many products, many buyers, many sellers Monopoly
One Unique Product, One seller, many buyers Monopolistic Competition
One unique product, Many sellers, many buyers Oligopoly
One Unique product, few sellers, many buyers

lead to a decrease in demand. Ex: Bus rides LUXURY GOODS

A good for which other things being equal, an increase in income leads to a bigger percentage increase in demand. Ex: Jewelry F.2. Equilibrium EQUILIBRIUM
Equilibrium is achieved at the price at which quantities demanded and supplied are equal. SURPLUS
Also known as excess supply
A situation which happens when quantity supplied is greater than quantity demanded. SHORTAGE
A situation in which quantity demanded is greater than quantity supplied. G. MACROECONOMICS G.1. Economic Growth And Development ECONOMIC GROWTH
aims to increase a country's national income. ECONOMIC DEVELOPMENT
aims to increase the country’s welfare. G.2. Metrics Of Economic Growth GROSS DOMESTIC PRODUCT
The total value of final goods and services produced within an economy in a given period of time NOMINAL
Gross Domestic Product without any effect of inflation.
Based on current year prices REAL
Inflation-adjusted GDP of a country
Based on base-year prices

EXPENDITURE APPROACH

Z= C + I + G + (X-M)

Where; Z= GDP C= total consumption I= Investment G= total government spending X-M= Net Export INCOME APPROACH Z= R + I + P + W Where; Z= GDP R= rents I= interest P= profits W= wages GROSS NATIONAL PRODUCT

The total value of final goods and services produced during a given period by the citizens of a country.
GNP = GDP + Net factor income from abroad (Income by Filipinos- Income by foreigners) GROSS NATIONAL INCOME
The total amount of money earned by the nation’s people and businesses, including subsidies.
GNI = GDP + Net subsidies from abroad (difference between subsidies received from abroad and subsidies sent abroad). G.3. Metrics Of Economic Development (Welfare Measures) HUMAN DEVELOPMENT INDEX
Measures Social and Economic Development, via: o Number of years of schooling o Life expectancy o GNI per capita POVERTY MEASURES POVERTY
Economic condition where humans experience a lack of certain commodities essential for stable living.

CHRONIC POVERTY

Households whose per capita income fall below the poverty threshold at most observable points TRANSIENT POVERTY
Households that are not poor on average, but are only poor at given points in time POVERTY THRESHOLD/POVERTY LINE/POVERTY LIMIT
Minimum level of income needed to satisfy needs (Adequate).
For a 5 person household o World: Php 15,000 or 300 USD o Philippines: Php 10,000 or 200 USD MULTIDIMENSIONAL POVERTY INDEX
Three dimensions of poverty: o HEALTH (nutrition, child mortality) o EDUCATION (year of schooling, school attendance) o STANDARD OF LIVING (Fuel, Sanitation, Water, Electricity, Housing, Asset) G.4. Government Intervention PRICE CONTROL MEASURES PRICE CEILING
a legal maximum on the price of a good or service. Example: rent control. PRICE FLOOR
a legal minimum on the price of a good or service. Example: minimum wage. FISCAL POLICY
The government’s decisions about taxation and spending. o TIGHT FISCAL POLICY § The government levies more taxes and tariffs o LOOSE FISCAL POLICY § The government lowers taxes and tariffs

MONETARY POLICY

Central bank activities that are directed toward influencing the quantity of money and credit in an economy o CONTRACTIONARY § During inflation § The Central Bank increases interest rates and limits the money supply to slow growth and decrease inflation. o EXPANSIONARY § During recession § The Central Bank lowers interest rates, so consumer spending and borrowing increase. MONETARY POLICY TOOLS OPEN MARKET OPERATIONS § The selling and buying of bonds and securities. DISCOUNT RATE § Interest rate charged to commercial banks and other depository institutions. RESERVE REQUIREMENT § The amount of fund that banks hold in reserve to meet withdrawals. G.5. International Trade And Capital Mobilization INTERNATIONAL TRADE § Consumer goods, raw materials, food, and machinery are bought and sold in the international marketplace. § Export- A product that is sold to the global market § Import- A product that is bought from the global market § Balance of Payment (BOP)- Difference between all money flowing into the country in a particular period of time and the outflow of money to the rest of the world (export-imports).

Economics Lecture notes, Lecture notes of Economics

Related documents

Partial preview of the text

Download Economics Lecture notes and more Lecture notes Economics in PDF only on Docsity!

ECONOMICS

A. ECONOMICS

D. THE ECONOMIC RESOURCES/

PRODUCTIVE RESOURCES

LAND

MIXED

EXPENDITURE APPROACH

Z= C + I + G + (X-M)

CHRONIC POVERTY

MONETARY POLICY