BASIC ECONOMIC CONCEPTS: EFFICIENT USE OF LIMITED RESOURCES AP9

Economics

The study of how people make choices to satisfy their needs and wants using limited resources.

Microeconomics

The study of actions and decisions of individuals, households, and small businesses.

Macroeconomics

The study of the overall economy of a country, e.g., inflation, GDP, employment.

Scarcity (Kakapusan)

Natural and permanent limitation of resources.

Shortage (Kakulangan)

Temporary lack of supply in the market due to management or distribution issues.

Renewable Resources

Resources that can be replaced or replenished naturally over time.

Nonrenewable Resources

Resources that cannot be easily replaced once used up.

Causes of Resource Scarcity

Increasing population, wasteful use of resources, environmental degradation, pollution.

Indicators of Resource Scarcity

High prices, limited access, depletion of supply.

Maslow’s Hierarchy of Needs

A theory that ranks human needs from physiological to self-actualization.

Trade-off

The exchange of one thing for another.

Opportunity Cost

The value of the item that was given up.

Marginal Analysis

Analyzing whether an additional decision is worthwhile.

Traditional Economy

An economy based on customs and traditions, often barter.

Market Economy

An economy where production and prices are determined by private businesses and consumers.

Command Economy

An economy controlled by the government regarding what, how, and for whom to produce.

Mixed Economy

An economy combining private businesses with government control in some areas.