Studied by 9 people
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Economics
- Seeks to understand how choices are made (decision-making)
- A social science as it seeks to study humans with empirical tools
Observe and Experiment
- empirical tools in economics
Scarcity
- Limited availability of a resource, good, or service
- Resource is scarce when a quantity has limited availability to the demand for it
Ex. Oil, Land, Rice
Shortage
- when the demand is greater than the supply for a good, product, or service
Choice
- Because there is scarcity, people have to choose which want or need they have to satisfy first
- People decide how to allocate their limited resources
Utility
- Satisfaction or usefulness the consumption of a good can bring
- One of the considerations when making decisions
Opportunity Cost
- What we give up by choosing something else
- The value of the next best alternative
- Includes the monetary costs, time, and effort
Microeconomy
- Small; subset of economics that focuses on the decisions of smaller agents
Macroeconomy
- Subset of economy that focuses on the decisions of groups
Tiger Economy
- Refers to rapidly growing economies in Asia, especially those countries transitioning from agrarian society to industrialized nations
South Korea, Taiwan, Hong Kong, Singapore
- the original tiger countries
What should we produce
- Asks what products and services an economy should focus on producing
•Considerations:
Resource availability
Consumer demand
How should we produce it
- Asks what methods will be used in order to produce the goods and services needed
•Considerations:
Does the country use automated technology to produce, or does the country produce using manual labor, or both
For whom should we produce it
- Asks who should receive the final goods and services produced by the economy
- Another consideration is whether goods should be given to those who can afford it
Land
- Consists of all natural resources, physical land, and raw materials
Physical Land
- agricultural land used for farming, for commercial or residential land development to create goods and services
Natural Resources
- materials derived from land such as water, gold, copper, and oil
Labor
- Tangible human effort in the production process
- Contributions of the workforce, whether physical or mental
Skilled Labor
- workers with specialized training or expertise (engineers, doctors)
Unskilled Labor
- workers performing basic tasks requiring little training (factory workers, sales associates)
Professional Labor
- professionals engaged in professional services (teachers, lawyers, consultants)
Capital
- Investments made to improve production
- Can come in the form of physical capital or human capital
Physical Capital
- physical tools and equipment that make production more efficient
Human Capital
- skills and knowledge of the workers
Entrepreneurship
- The intellectual capacity to organize and put together other factors of production to produce goods and services the society needs
Economic Growth
- Overall expansion of an economy
- Does not accurately represent the welfare or well-being of the members of a particular society
- Measured by an increase in gross domestic product (GDP)
Gross Domestic Product
- products and services produced within the country’s borders
- affects the economy because it gives opportunities and more jobs
Economic Development
- Measure of the welfare of an economy’s members
- Looks at the quality of life and living standards
Sustainable Development
- Economic development that meets the needs of the present without compromising the needs of future generations
Inclusive Growth
- One of the key goals of AmBisyon 2040
- Growth that not only benefits the elite but helps all members of a society
