MICROECO_LESSON_WEEK4
Page 1: Introduction
Course Title
SSM 102a: Microeconomics
Instructor
Jennifer S. Mayano
SHS HUMSS Teacher / T-III
Page 2: Economic Problems Overview
Fundamental Economic Problems
Discussion of fundamental economic issues faced due to resource scarcity and unlimited human wants.
Page 3: Fundamental Economic Problems
Core Issues
Each economy faces critical problems arising from limited resources.
Page 4: Scarcity and Resource Allocation
Basic Economic Questions
What to Produce?
Determining what goods and services should be produced based on limited resources.
Page 5: Decisions on Production
Factors in Production Choices
Choices are influenced by consumer demand, governmental priorities, and the availability of resources.
Page 6: Prioritizing Production
Citizen and Cultural Needs
Decisions also depend on the needs and desires of the population along with cultural preferences.
Page 7: Efficiency in Resource Use
Determining Production Methods
How to Produce?
This involves evaluating the efficiency of resource use and considering costs, efficiency, and environmental impacts.
Page 8: Production Techniques
Selection of Methods
Choices between labor-intensive vs. capital-intensive methods focus on minimizing costs and using resources efficiently.
Page 9: Allocation Issues
Targeting Distribution
For whom to produce?
Concerns about how goods and services are distributed, emphasizing income and wealth allocation equity and social welfare.
Page 10: Goods Distribution
Society's Product Allocation
It focuses on the mechanisms of distributing products among individuals and groups, considering factors like income and purchasing power.
Page 11: Sustaining Economic Growth
Growth Strategies
Addressing how economies can sustain long-term growth through investments in technology, infrastructure, and human capital.
Page 12: Economic Interdependence
Definition
The concept where individuals, businesses, or countries rely on one another for the procurement of goods, services, and resources, promoted by specialization and trade.
Page 13: Specialization and Trade
Interdependence Dynamics
Different entities focus on what they can produce most efficiently leading to more effective trade relationships.
Page 14: Comparative Advantage
Economic Principle
Allows specialization in lower opportunity cost goods or services, enhancing efficient resource use and trade.
Page 15: Opportunity Cost Defined
Definition
The cost incurred by choosing one alternative over another; crucial in making production decisions.
Page 16: Opportunity Cost Examples
Practical Illustration
Example: If the Philippines opts to produce rice over corn, the opportunity cost is the amount of corn forgone in production.
Page 17: Specialization Benefits
Advantages of Focused Production
Enhanced outcomes result when every entity focuses on its strengths, allowing improved trade dynamics and economic growth.
Page 18: Comparative vs Absolute Advantage
Definitions
Absolute Advantage: The capability of a country to produce a good using fewer resources.
Page 19: Comparative Advantage Explained
Opportunity Cost Comparison
Comparative Advantage occurs if a country produces a good at a lower opportunity cost than another, irrespective of absolute efficiency.
Page 20: Trade Example - Philippines and Japan
Comparative Advantage in Action
Rice Production:
Philippines: 10 tons rice, 2 cars
Japan: 5 tons rice, 10 cars
Philippines specializes in rice, Japan in cars for mutual benefit.
Page 21: Specialization Results
Benefits Enumeration
Comparative advantages lead to better resource usage, lower production costs, and enhanced consumer choices through increased goods variety.
Page 22: Challenges of Comparative Advantage
Potential Issues
Risks include over-reliance on trade, job displacement in certain industries, and external factors affecting production capabilities.
Page 23: Global Supply Chains
Key Concept
Products across the world often involve multiple countries contributing components, exemplified by the supply chain of a smartphone.
Page 24: Financial Interdependence
Economic Financing Reliance
Countries engage in international investments and utilize loans to finance economic operations, such as the case in the Philippines with FDIs.
Page 25: Labor Migration
Workforce Dynamics
Migration for job opportunities impacts local economies, highlighted by OFWs sending remittances home.
Page 26: Energy and Resources
Interdependence in Resources
Countries are connected via energy supplies, illustrating the Philippines' reliance on oil imports from the Middle East.
Page 27: Technology and Innovation
Collaborative Benefits
Nations collaborate on R&D leading to technology advances, with the Philippines benefiting from imports of foreign technologies.
Page 28: Economic Systems Overview
System Definitions
Economic systems organize how societies manage the production and distribution of goods and services.
Page 29: Traditional Economies
Characteristics
Traditional economies prioritize customs and barter over cash, often linked to agriculture or hunting.
Page 30: Traditional Economy in Practice
The Lack of Surplus
Bartering is necessary for the exchange of goods in economies without surplus resources.
Page 31: Command Economy
Centralized Control
The government dominates the economic landscape through regulations and directives, controlling production and distribution.
Page 32: Command Economy Examples
Historical Context
Examples include North Korea and the former Soviet Union where private businesses were not existent.
Page 33: Market Economy
Supply and Demand Dynamics
Production and pricing are driven by supply and demand forces without significant government intervention.
Page 34: Characteristics of Market Economy
Free Market Principles
Individuals and businesses make economic decisions focused on profit generation influenced by market changes.
Page 35: Mixed Economy
Blended Approach
Hybrid model incorporating both market and planned economic elements with significant regulation alongside private ownership.
Page 36: Circular Flow of Economic Activity
Concept Overview
Describes the continuous movement of money in an economy through exchanges for goods and services.
Page 37: Circular Flow Dynamics
No End to Activity
The model illustrates endless cycles of production, income generation, and spending within the economy.
Page 38: Two-Sector Model
Basic Interactions
Households supply production factors to firms and are compensated via wages, while firms sell goods to households.
Page 39: Three-Sector Model
Government Inclusion
The government plays a role through taxation and public service provision impacting overall economic flow.
Page 40: Four-Sector Model
Trade Impact
Incorporates foreign trade effects, emphasizing imports and exports, with continuous transactions affecting domestic economies.
Page 41: Key Flows in the Circular Flow Model
Major Economic Exchanges
Product Market: Goods/services exchanged
Factor Market: Households contribute labor/resources.
Government Intervention & Financial Market: Tax collection and financing.
Foreign Market: Influences of global trade activities.
Page 42: Conclusion
Thank You
Acknowledgment of participation and attention given in the economic study.