lesson 1a- intro to econ (

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  • 8/6/2019 Lesson 1a- Intro to Econ (

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    THE WORLD OFTHE WORLD OF

    ECONOMICSECONOMICSObjectives:Objectives:

    -- To understand why I should studyTo understand why I should studyEconomics?Economics?

    -- To appreciate the opportunity ofTo appreciate the opportunity ofeconomic learningeconomic learning

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    Did you know thatDid you know thatECONOMICSECONOMICS

    is a practical and anis a practical and animportant subjectimportant subject

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    ECONOMICS is aboutECONOMICS is about

    MAKING CHOICESMAKING CHOICES

    HowHow MANMAN (you and me) makes a CHOICE(you and me) makes a CHOICEon big and even small matterson big and even small matters

    HowHow BUSINESSBUSINESS makes a CHOICE on variousmakes a CHOICE on variousbusiness mattersbusiness matters

    HowHow SOCIETYSOCIETY makes a CHOICE on how to make ourmakes a CHOICE on how to make ourworld a better place to live inworld a better place to live in

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    AS YOU ENTERED THE CLASSROOMAS YOU ENTERED THE CLASSROOM

    YOU MADE SOME ECONOMIC DECISIONS!YOU MADE SOME ECONOMIC DECISIONS!

    Should I attend the first day of class?

    YES = 100% NO= 0%

    If I had not come, where would I be

    instead or what could I be doing?

    SLEEPING =91.4%

    EATING = 51.4%

    MALLING/SHOPPING = 31.3%

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    HHmmmWHICH SEAT WILL IHHmmmWHICH SEAT WILL I

    TAKE?TAKE?

    Where should I sit?

    1st Row /2nd Row / 3rd Row /4th Row

    Reasons for choosing a particular seat

    NEAR A FRIEND = 60%

    NEAR THE PROFESSOR = 22.9%

    NEAR THE DOOR = 8%

    COOL =8%

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    OTHER ECONOMICOTHER ECONOMICDECISIONSDECISIONS

    LIFE IS ALWAYS ABOUT MAKINGLIFE IS ALWAYS ABOUT MAKINGSIMPLE AND IMPORTANTSIMPLE AND IMPORTANT

    DECISIONS!DECISIONS!

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    BREAKFASTLUNCHDINNERBREAKFASTLUNCHDINNER

    SNACK???SNACK???

    WHERE WILL I GO?

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    WHAT WILL I EAT?WHAT WILL I EAT?

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    Should I pursue and finishmy college education?

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    Or work and earn a living?

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    Should I enter into a

    relationship with thisperson?

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    Should I marry at an early age?

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    Or wait until I am ready for a serious

    relationship? Responsibility?

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    PERSONAL DECISIONSPERSONAL DECISIONS

    How will I spend my time? Money?How will I spend my time? Money?

    Energy? Life?Energy? Life?

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    BUSINESS DECISIONSBUSINESS DECISIONSShould I put up this business ?Should I put up this business ?

    What will I sell or create?What will I sell or create?How many will I sell or create?How many will I sell or create?

    Etc..etc..etc!Etc..etc..etc!

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    WHY DOWHY DOMAN/BUSINESS/SOCIETYMAN/BUSINESS/SOCIETY

    HAVE TO MAKE SOMEHAVE TO MAKE SOMECHOICESCHOICES??

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    SCARC

    ITYSCA

    RC

    ITYWe can not HAVE everything weWe can not HAVE everything weWANT!!!WANT!!!

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    REASONS FORREASONS FOR

    STUDYING ECONOMICSSTUDYING ECONOMICS

    Reasons why we are here?Reasons why we are here?

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    ScarcityScarcity

    The root problem that economics deals

    with.

    Paired with shortage of resources are themultiple wants and desires of human

    beings.

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    LOOKING THROUGH THE EYESLOOKING THROUGH THE EYES

    OF SCARCITYOF SCARCITY

    OPPORTUNITY COST the cost ofsomething given up in order to obtain a

    good

    The best alternative that is forgone when

    we make a decision or a choice

    Tradeoff or exchange

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    OO--PP--PP--OO--RR--TT--UU--NN--II--TT--YY

    COST???COST???Given this situation:Faced with a tempting assortment of

    food items for merienda, we discover thatwe have only P100 left in our wallet to spendboth for food and for a ballpen.

    What is the scarce resource here? ______

    THE CHOICE HERE INVOLVESALTERNATIVE WAYS OF SATISFYINGBOTH NEEDS WITHIN OUR BUDGET.

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    We could buy fruit juice and a big slice of

    cake with just enough left over to buy an

    ordinary ballpen or we could take a

    softdrink and some crackers and buy a

    felt-tipped pen.

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    The point here is that since human beings

    have MULTIPLE wants and desires,

    resources have alternative uses.

    Scarce resources need to be allocated

    among different needs.

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    Importance of Studying EconomicsImportance of Studying Economics

    1. It will make you an informed andwise DECISION MAKER or anintelligent participant in the

    economy

    Learn the economic way ofthinking

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    ECONOMIC ISSUESECONOMIC ISSUES

    FOREX RATE

    UNEMPLOYMENT

    POVERTY

    ELECTION

    FINANCIAL

    INSTITUTIONS

    PRICES

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    3. It will help you understandpotential gains and limitations

    of economic policy

    Consider the social perspective

    or interest

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