MICROECONOMICS (MIDTERMS)

ECONOMICS

Studies the efficient allocation of the scarce means of production toward the satisfaction of human wants. (Slavin)

MICROECONOMICS

MACROECONOMICS

These are the TWO MAIN BRANCHES OF ECONOMICS

MACROECONOMICS

studies the entire economy how all households, businesses, and the government interact at a national or global level

MACROECONOMICS

deals with broad economic issues that affect the whole country or world

MACROECONOMICS

Main Focus Areas:

–National income and output

–Employment and unemployment

–Inflation and deflation–Government spending and taxation

–Economic growth and development

–International trade

MICROECONOMICS

studies the behavior and decisions of individuals, households, and businesses in using limited resources

MICROECONOMICS

focuses on small units of the economy —like a single firm, a consumer, or a specific market.

MICROECONOMICS

•Main Focus Areas:

–Demand and supply of goods and services

–Price determination

–Consumer behavior

–Production and cost of goods

–Market structures (e.g., monopoly, competition)

RESOURCE UTILIZATION

refers to the effective and efficient use of available resources—such as time, labor, money, materials, equipment, and technology—to achieve a desired goal or output.

RESOURCE UTILIZATION

measures how well resources are being used to maximize productivity, minimize waste, and reduce costs

RESOURCE UTILIZATION

it's about making the most out of what you have

HUMAN RESOURCE UTILIZATION

CAPITAL RESOURCE UTILIZATION

FINANCIAL RESOURCE UTILIZATION

TIME UTILIZATION

TECHNOLOGICAL RESOURCE UTILIZATION

NATURAL RESOURCES UTILIZATION

State the types of Resource Utilization

HUMAN RESOURCE UTILIZATION

Efficient use of labor or workforce to achieve organizational goals.

CAPITAL RESOURCE UTILIZATION

Effective use of physical assets like machinery, buildings, and equipment.

FINANCIAL RESOURCE UTILIZATION

Efficient allocation and use of monetary resources.

NATURAL RESOURCE UTILIZATION

Sustainable and effective use of land, water, minerals, and other natural resources.

TIME UTILIZATION

Efficient management of time to maximize productivity and output

TECHNOLOGICAL RESOURCE UTILIZATION

Effective use of technology to increase efficiency and productivity

SCARCITY

An imbalance between human needs and wants and the means of satisfying them

SCARCITY

the fundamental economic problem of having limited resources to satisfy unlimited wants and needs.

SCARCITY

the reason why choices must be made.

UTILITY

It is the total satisfaction received from consuming a good or services.

UTILITY

refers to the satisfaction, benefit, or pleasure a person derives from consuming a good or service.

UTILITY

It measures how useful or valuable something is to an individual

TOTAL UTILITY

MARGINAL UTILITY

These are the types of UTILITY

TOTAL UTILITY

The overall satisfaction a person gets from consuming a certain quantity of a good or service

MARGINAL UTILITY

The additional satisfaction gained from consuming one more unit of a good or service.

UTILITY

is subjective, different people get different satisfaction from the same product.

UTILITY

Economists use this to explain consumer choice and demand

DIMINISHING MARGINAL UTILITY

states that as a person consumes more units of a good, the additional satisfaction from each extra unit usually decreases

PRODUCTION

DISTRIBUTION

CONSUMPTION

OPPORTUNITY COSTS

Give the different concerns of Economics

PRODUCTION

combination of land, labor, capital, and entrepreneurship (factors of production) to create goods and services that have value and can satisfy human wants

FACTORS OF PRODUCTION

are the resources used to produce goods and services.

FACTORS OF PRODUCTION

They are essential inputs in the production process, and without them, no economic activity can take place

LAND

LABOR

CAPITAL

ENTREPRENEURSHIP

GIVE THE FOUR MAIN FACTORS OF PRODUCTION

LAND

refers to all natural resources that exist without human intervention and are used to produce goods and services

LAND

provides raw materials needed for production

limited and cannot be created

LABOR

the human effort applied in the production of goods and services, which can be physical or mental

CAPITAL

consists of man-made goods used to produce other goods and services. It is not money, but tools, machinery, buildings, and equipment

ENTREPRENEURSHIP

the ability to organize the other factors of production, take risks, innovate, and make business decisions to produce goods or services

WAGE

payment given to workers, usually on an hourly, daily, or weekly basis, for their physical or manual labor

WAGE

Typically paid to workers who perform routine or manual tasks.

–Often variable, depending on the number of hours worked.

–Can include overtime pay for extra work

WAGE

are the cost of labor for businesses.

SALARY

a fixed regular payment, usually monthly or annually, given to employees for their work, typically for professional or managerial roles

SALARY

–Fixed amount regardless of hours worked.

–Often includes benefits like health insurance or bonuses.

–Encourages long-term commitment and stability

SALARY

represent the compensation for skilled labor, ensuring that qualified professionals are motivated to contribute to production and organizational success

DISTRIBUTION

refers to the process of allocating the produced goods, services, and income among the factors of production (land, labor, capital, entrepreneurship) and ultimately among people.

DISTRIBUTION

answers the question “who gets what?”

DISTRIBUTION

ensures that the output of production reaches the right people and that the income generated by resources is shared among factor owners

CONSUMPTION

use of goods and services by households or individuals to satisfy their needs and wants.

CONSUMPTION

the ultimate purpose of production in any economy

PRIVATE CONSUMPTION

PUBLIC CONSUMPTION

THESE ARE THE TYPES OF CONSUMPTION

PRIVATE CONSUMPTION

Spending by households on goods and services

PUBLIC CONSUMPTION

Government spending on services like education, health, and infrastructure

OPPORTUNITY COSTS

the value of the next best alternative foregone when a decision is made to use resources for one purpose instead of another

PRODUCTION POSSIBILITIES

refers to the different combinations of goods and services that an economy can produce using its limited resources efficiently, within a given period of time

PRODUCTION POSIBILITIES

shows the trade-offs and opportunity costs involved in allocating resources to produce one good over another.

In simpler terms, it’s a way to visualize what an economy can and cannot produce with the resources it has

PRODUCTION POSSIBILITIES CURVE

is a graph that shows the maximum possible output combinations of two goods an economy can produce using its limited resources efficiently.

It visually represents concepts like scarcity, trade-offs, efficiency, and opportunity cost

FULL EMPLOYMENT

occurs when all available labor resources in an economy are being used efficiently, meaning everyone who wants a job and is able to work has a job

FRICTIONAL UNEMPLOYMENT

natural unemployment due to people changing jobs or entering the workforce

FULL PRODUCTION

happens when an economy produces goods and services at its maximum sustainable output level, using all available resources efficiently (labor, capital, land, and entrepreneurship)

means there is no wastage of resources and the economy is operating on its Production Possibilities Curve (PPC)

PRODUCTIVE EFFICIENCY

producing goods or services using the least amount of resources to achieve the maximum possible output.

PRODUCTIVE EFFICIENCY

occurs when an economy or a firm is operating on its Production Possibilities Curve (PPC), where no resources are wasted, and output cannot be increased without using more resources

ECONOMIC GROWTH

means the increase in a country's production of goods and services over time, usually measured by the rise in Gross Domestic Product (GDP).

ECONOMIC GROWTH

indicates that an economy is expanding, creating more jobs, generating higher income, and improving the standard of living of its people

OIKONIMIA

economics come from what Greek word?

oikos

nomos

oikonomia is a combination of what words?

house / household

oikos means

management or law

nomos means

household management of management of the home

oikonomia means

managing the resources of a nation or society

the meaning of the term expanded from managing a household’s resources to what?

ECONOMICS

the social science that studies how individuals, businesses, governments, and societies make choices about the allocation of scarce resources

ECONOMICS

It examines the production, distribution, and consumption of goods and services, and analyzes how these decisions affect the overall economy.

RESOURCES

anything used to produce goods and services that satisfy human needs and wants

factors of production

resources are often called what?

LAND 

LABOR

CAPITAL

ENTREPRENEURSHIP

what are the four main types of resources?

LAND

All gifts of nature like land, water, air, minerals, forests, etc

ex: farmland, rivers, oil, and sunlight

LABOR

human resource

The physical and mental effort of people used in production

CAPITAL

man-made resources

CAPITAL

Tools, machines, buildings, and equipment used to produce other goods and services

ENTREPRENEURSHIP

The skill and creativity to organize the other resources (land, labor, capital) to produce goods and take business risks

SCARCE RESOURCES

means that the things we use to produce goods and services — such as land, labor, capital, and entrepreneurship — are limited

SCARCE RESOURCES

not enough resources

GOODS AND SERVICES

the two main types of products that satisfy human wants and needs.

GOODS AND SERVICES

They are the result of economic activities

GOODS

are tangible (physical) items that can be seen, touched, stored, and owned.

GOODS

They are produced to satisfy human wants or needs and can be bought or sold in the market.

GOODS

—Tangible (can be touched)

–Can be stored for future use

–Ownership can be transferred from seller

to buyer

–Production and consumption are separate (you buy before using)

CONSUMER GOODS

CAPITAL GOODS

DURABLE GOODS

NON-DURABLE GOODS

PUBLIC GOODS

Give the 5 TYPES OF GOODS

CONSUMER GOODS

Used directly by consumers

CAPITAL GOODS

Used to produce other goods

DURABLE GOODS

last for a long time

ex.: cars, furniture

NON-DURABLE GOODS

quickly used or consumed

ex.: soap, snacks

PUBLIC GOODS

provided by government, non-excludable

ex.: streetlights, parks

SERVICES

are intangible activities provided by people or businesses to satisfy needs and wants.

SERVICES

they provide value through actions or performance

SERVICES

•Intangible (cannot be touched or seen)

•Cannot be stored or owned same time service

•Production and consumption occur at the

•Quality depends on the person providing the

PERSONAL SERVICES

BUSINESS SERVICES

PUBLIC SERVICES

PROFESSIONAL SERVICES

Give the 4 TYPES OF SERVICES

PERSONAL SERVICES

Provided for individual needs

ex.: haircut, massage

BUSINESS SERVICES

help business operate

ex.: accounting, marketing