Four key economic concepts—scarcity, supply and demand, costs and benefits, and incentives—can help explain many decisions that humans make.

1. ECONOMICS

2. WHAT IS
ECONOMICS?
Economics is concerned with the
production , distribution, and use of
material goods and services. Adam
Smith the recognized father of
Economics, stated that Economics
is “an inquiry into the nature and
causes of wealth of the nations.”

3. BASIC TERMS
OF ECONOMICS
A good is anything which yields satisfaction
to someone. Goods may be tangible when
they are in the form of material goods or
commodities. They may be also intangible in
the form of services. Tangible goods like
shoes, books, and umbrellas, while
intangible services like those rendered by the
doctor, the teacher, or the painter are all
used in the satisfaction of human wants and
needs.

4. Consumer goods
Goods which yield satisfaction directly, just
like soft drinks and food are all called
consumer goods.
Capital goods
Goods used in the production of other goods and
services. Example of these are buildings,
machinery, and equipment.

5. Luxury goods
Are those goods man may do without, but are used to
contribute to his comfort and well being. Such as
perfumes, chocolates, and expensive cars are luxury
items that are purchased only by those who can afford.
Economic goods
Is a good which is both useful and scarce. It has a value
attached to it and a price has to be paid for its use. If a
good is abundant that there is enough of it to satisfy
everyone’s needs without anybody paying for it, that
good is free. Air is free, but air from the electric fan is an
economic good.

6. ECONOMIC
RESOURCES
The things which are needed to carry on the
production of goods and services are called
economic resources or factor s of production.
These resources includes:
1. LAND
2. LABOR
3. CAPITAL
4. ENTREPRENEUR

7. TYPES OF
ECONOMIC
SYSTEM

8. Traditional Economy
This is a subsistence economy. A family produces
everything that it consumes. Decisions on what, how,
and for whom to produce are made by referring to the
traditional manner of doing things. Production is
carried on in the methods used by forefathers and is
therefore very primitive. This type of economic
system is very backward since it does not allow for
change.
Command Economy
The means of production are owned by the government.
Its decisions are arrived at by planners or government
men who dictate what, how, and for whom to produce.

9. Market economy
The resources are privately owned and decisions are
made by the people themselves. The system depends on
prices set by the conditions of demand and supply.
Competition is supreme; there is consumer sovereignty,
and the price of the good is the guiding factor for
producers to know what and how much to produce.
In the resource market the price of the resources;
the rent, the salaries, and interest, will depend on
the amount made available by the resource
owners as well as the amount of these resources
that the producers will be willing to hire.

10. THE MIXED
ECONOMY
The United States economy is predominantly
market, but it cannot be denied that some form of
government control exists. Cuba can best be
described as a command since its decisions are
planned by the government; however, the price
system is also used, even if only minimally.
The Philippine economy is a mixed economy since it
applies a mixture of the three forms of decision-
making. However, it is more market-oriented rather
than command or traditional.

11. POLITICS AND
GOVERNANCE

12. HISTORY
AND
GEOGRAPHY
The lexicon defined geography as a
science, which deals with earth and its
life. Man’s physical environment is
necessary because it shapes man’s
way of life for his environment gives him
food, water, clothing, and shelter. These
are the basic needs for man to survive
and they are found on earth.

13. HISTORY AND
POLITICAL
SCIENCE (CIVICS)
Civics or political science deals with
administrative and political setup of one country.
It also involves the study of political leadership,
systems of government, political power,
Constitutions, and public policies.
History also taught us the struggle for power,
styles of governmental managements, the
strengths, weaknesses, and shortcomings of
administrative managers.

14. HISTORY
AND
ECONOMICS
Man’s constant struggle is on survival. During
time immemorial, man was a gatherer of the
provisions of nature. Man is always on the move
in search for food and find a permanent place to
stay. As time progresses man has improved his
economic life.

15. HISTORY AND
SOCIOLOGY AND
ANTHROPOLOGY
The social and cultural dimension
of man’s life is described by the
fields of sociology and
anthropology. Sociology is the
science of society and
anthropology is the science of
man’s origin.

16. CONCEPTS OF
POLITICAL
SCIENCE

17. POLITICAL
SCIENCE
Is defined as a social science
concerned chiefly with the description
and analysis of political and
governmental institutions and
processes (Webster’s New Collegiate
Dictionary).

18. POLITICAL SCIENCE
AND HISTORY
This discipline is closely related to
the study of Political Science. As
understood from its etymology
from the Greek word “historia”,
which means investigation or
inquiry, gives idea on how the past
is to be studied.

19. POLITICAL SCIENCE
AND ECONOMICS
Etymologically, it comes from the Greek word
“oikonomos” which means “household
management” a concept, which is associated with
the individual and family. The concept of this
household management was changed to “political
economy” signifying that the economy of modern
times was no longer that of the household alone but
that of a nation.

20. POLITICAL SCIENCE
AND SOCIOLOGY
As taken from its origin, the Latin word
“socius”, which means partners,
companions, associates, or mates and the
Greek word “logos”, which means to
study. In short it concerns about the study
of social group. This group is almost
always the subject of politicking during
election time.

21. POLITICAL SCIENCE
AND ANTHROPOLOGY
It is the study of the origin of man or
humanity. The concern of this field of
discipline is to establish the cultural
origin of man such as social
institutions, education, religion,
economy, and government to name a
few.

22. POLITICAL SCIENCE
AND PSYCHOLOGY
This discipline deals with human behavior.
How people behave in selecting
candidates during elections, how officials
treat public funds, and how the militaristic
of the uninformed service works during
political leadership crisis are the subject.

23. POLITICAL SCIENCE
AND GEOGRAPHY
It is the study of Political Science that
concerns about location, territory, and
resources. Geography’s lexical definition
is the study of Earth and its surface
features, how they influence human
distribution and activity (Reader’s Digest
Universal Dictionary, 1999).

24. POLITICAL SCIENCE
AND LAW
Government is the province of political science and
the very foundation of this agency of the state is law.
Without law, no peace and order could be realized.
All human activities are subjects of legislation, all
governmental agencies are created by law; their
functions and powers are also defined by law. All
these are within the domain of the government to see
it that these are faithfully allocated and discharged by
the concerned authorities.