Econ

Economic Thought Key Concepts in Economics Relationship of Econ to Other Science The Relevance of Studying Economics

Progress of Economic Thought ,[object Object],[object Object],[object Object],[object Object]

Plato ,[object Object],[object Object],[object Object],proposition: “the individual cannot satisfy all his wants, consequently he must rely on the efforts of other individuals” division of labor is necessary Time an important factor of economic organization

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Aristotle ,[object Object],[object Object],“ man is a political being” – a social being economics of the household vs economic of the state art of managing the household art of money-making PRODUCTION EXCAHNGE/TRANSACTION in the market - money

Middle Ages ,[object Object],[object Object],Merchants commune constitution and by-laws gain considerable political power , protecting themselves with high walls, battlements, independent states CORRUPTION

The Physicist and the Economist ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Realization: ,[object Object],[object Object],[object Object],Observation:

Statistics ,[object Object],[object Object],Probability Law of Large Numbers Finance

Table of Comparison ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],LLN suggest that it is much more likely that company Y will be able to expand by 50% than company X Logical Sense if large company continues to grow at 30% – 50% every year, it would eventually become bigger than the economy itself! Obviously, this can’t happen and eventually growth has to slow down.

Law of Diminishing Returns ,[object Object], more laborers harvest wheat field each additional laborer will add less output than his predecessor because he has less and less of the fixed amount of land to work with “ increase at a declining rate”

Economic Theory ,[object Object],[object Object],[object Object]

If the supply of money is increased, prices tends to rise ,[object Object],[object Object],[object Object],[object Object],[object Object],Government and the commercial banks may pumped considerable quantities money into the economy and yet may not be affected until most of the idle workers are called back to works and the plants previously closed and begin populating again.

Economic Hypothesis ,[object Object],Economic Agents Consumers Businessmen Bankers Employees

Methodology of Science/Scientific Method

Applied Economics ,[object Object],[object Object],[object Object],application of economic theory and analysis Pure Economics

But… ,[object Object],[object Object],[object Object],[object Object],income tax registration license Conclusion…

Economic Policy ,[object Object],[object Object],[object Object],government action

HIGH LEVEL OF EMPLOYMENT ,[object Object],[object Object],[object Object],[object Object],More government expenditures and unbalanced budget Economic Policy SOCIETY

Political Economy branch of Economics deals with the relationship between Economics and politics or political theory the economist cannot operate in a world that is divorced from the real world the economist in making his recommendations must be aware of their feasibility within a given political system Communist Anarchy Monarchy Sultanate Feudal Theocracy it would be futile for an economist to recommend complete abandonment of farm support programs/tariffs if dominant political sentiment was against such measures

Normative Economics the relationship between Economics and Ethics ETHICS value Judgments good/bad right/wrong philosophers analyzes the reasons why people consider a particular policy is bad and another policy as good HEDONIST STOICS economic policy which yields the greatest good for the greatest number of individual is right material objects are neither good or bad

Economist he can help the society/individuals make judgments concerning good and bad economic policies by pointing out the consequences of the policies consequences of a more equitable distribution of income economic policies concerning taxes profits = large segment of population earning low incomes and a small segment of population earning very high incomes

TAX sales places a relatively greater burden on the low and middle income groups than on the high income groups he may also determine the conditions under which a tax is either evaded or passed on to someone else determine whether the corporate income tax is paid by the stockholders or by the consumers

but the final judgment concerning whether the consequences of a certain policy are good or bad is made by society and not by the economist

Assignment Formulate your own hypothesis/theory in relation to the Philippine Economy. Prove it by following the steps in the Methodology of Science

Quiz ,[object Object],[object Object],[object Object]

Econ

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