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ECONOMICS HEALTH HEALTH ECONOMICS PHARMACOECONOMICS

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DEFINE: ECONOMICS
1. study of the proper allocation and efficient use of scarce resources.

why?

DEFINE: ECONOMICS
2.The science of choice

DEFINE: ECONOMICS
3. Is the study of the activities that involve PRODUCTION and EXCHANGE OF GOODS

DEFINE: ECONOMICS
4.The study of commerce among nations

DEFINE: ECONOMICS
5.The study of man and how he runs the economic activities.

Components of Economics
1. Economics is about making CHOICES. 2. Economics is analyzing the different CHOICES and their COSTS. 3. The choices and their costs will give an EFFECT ON THE FUTURE of those who make these decisions, or to the recipients of the commodities.

BRANCHES OF ECONOMICS
1. Microeconomics 2. Macroeconomics

Microeconomics
Is the study of smaller and individual entities such as household and firm with a view to understand decision making in the face of scarcity and the consequences of these decision

Microeconomics
HOUSEHOLD:
How household allocate and use their financial and other resources

Microeconomics
FIRM:
How the industries price the goods, effort, consumption, saving, and allocation

Macroeconomics
is the study of the functioning of the economy as a WHOLE with a view to understand interactions of economic aggregates such as national income, employment and inflation.

Macroeconomics and Microeconomics Differentiated

Terms associated with Macroeconomics Gross national Product Gross Domestic Product Aggregate supply aggregate demand Employment/unemployment Fiscal policy Government and taxation Foreign trade/Balance of trade Inflation/Deflation Interest rate Foreign exchange Terms Associated with Microeconomics Pricing Household allocation of resources Household spending and saving Price and income elasticities

METHODOLOGIES OF ECONOMICS
1. POSITIVE 2. NORMATIVE

METHODOLOGIES OF ECONOMICS
1. POSITIVE- analysis of economics which deals with what actually is or what

happened

POSITIVE ECONOMICS
Environment Protection Agency study shows that exposure to secondhand smoke causes 3,000 lung cancer deaths per year in nonsmokers

METHODOLOGIES OF ECONOMICS
1. NORMATIVEanalysis of economics which seeks to answer the question, what ought to be?

NORMATIVE ECONOMICS
To prevent people from having lung cancer and stop them from smoking, the government should take rigid action by increasing tax on cigarettes

ECONOMIC RESOURCES
1. 2. 3. 4.

Land Labor Capital Entrepreneur

LAND

LABOR

CAPITAL

ENTREPRENEUR

Non-Economic Resources/Factors
1. 2. 3. 4. 5. 6. Government Religion Education Social structure Values Culture

HOW TO ALLOCATE RESOURCES

1. Economic system 2. Decision Making System

Economic System is responsible for improving economic conditions of the people

Types of Economic System

Traditional Command Market Mixed

Traditional

Command

Free Market

Mixed System

Effectiveness of ES is measured by the following Criteria

Abundance Stability Security Economic freedom

Growth Efficiency Justice and Equality

ECONOMIC DEVELOPMENT refers to the sustained, concerted actions of policymakers and commu nities that promote the standard of living and economic health of a specific area.

Criteria in Classifying Phases of Economic Development A. Means Livelihood

1. 2. 3. 4. 5. Hunting and fishing phase Pastoral phase Handicraft phase Agricultural phase Industrial phase

Criteria in Classifying Phases of Economic Development

B. Extent of Economic Activity

1. Household economy 2. Village economy 3. National economy 4. International economy

Criteria in Classifying Phases of Economic Development C. Medium of Exchange

1. Barter economy 2. Money economy 3. Money and credit economy

Money
Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment, it ensures the possibility of satisfying a new desire when it arises - Aristotle
Money is like a sixth sense, and you cant make use of the other five without it. W. Somerset Maugham

Money

Purposes of money
Medium of exchange Unit of account Store of Value Standard of deffered payment