THE BASICS OF

ECONOMICS
By: Sam D. Fuego
Social Sciences Department
Ateneo de Zamboanga University

Definitions of Economics

The science that deals with the actions of

individuals and societies directed toward
meeting certain ends in a world where
the means necessary to meet those ends
have alternative uses (Roger A. Arnold,
Economics).
The wise production and use of wealth to
meet demand or needs of individuals or
groups of people (Sonia M. Zaide, Living
Economics).

Def. of economics-cont.

The study of how people and society end up

choosing, with or without the use of money,
to employ scarce productive resources that
could have alternative uses, to produce
various commodities and distribute them for
consumption, now or in the future, among
various persons and groups in society.
It analyzes costs and benefits of improving
pattern of resource allocation (Paul
Samuelson, Economics).

Def. of economics-cont.

A classical body of knowledge concerning

human relationships clustered about
mans efforts to earn a living (Clifford L.
James, Principles of Economics).
Concerns situations in which choices
must be made about how to use limited
resources, when to use them and for
what purposes (Roger Le Roy Miller,
Economics, Today and Tomorrow).

Def. - cont

Is concerned with the production,

distribution, and use of material
goods and services ( Lloyd G.
Reynolds, Economics an
Introduction).
A science that is concerned with the
production, distribution, and
consumption of goods and services
(Thomas J. Hailstones, Basic
Economics).

Def. of econ cont.

Gerardo P. Sicat, Economics, defines

the term as: a scientific study which
deals with how individuals and
society generally make choice.

A Social Science that deals and seeks

to allocate scarce human and nonhuman resources among their
alternative uses in order to satisfy
human unlimited wants and services
(Villegas, Bernardo M., Guide to
Economics for Filipinos).

Key Concepts

Scarcity
Means that our wants outstrip the limited

resources available to satisfy those wants at

any point in time.
Resources such as time, land, labor, and the
like, are in limited supply.

Choice
Scarcity implies choice. A second

fundamental idea of economics is that

scarcity forces people to make choices
between alternative uses for their
resources.
This is as true for the consumer trying to
decide how to spend his/her last food peso
as it is for the manufacturer trying to decide
whether to hire additional labor or purchase
a new machine instead.

Opportunity Cost
A third basic concept is that choice implies

opportunity cost.
Defined as the value of the best alternative
foregone when decision is made.

Things in common

1. A science of human behavior

2. Making choices now and in the future
or over a certain period of time over
limited or scarce productive resources
regarding what goods to produce, how
much of each of the goods to produce,

for whom

the goods are to be

produced and which among the goods are
to be consumed.

Comes from the Greek word

oikonomia, which means household
management or running a
household.
However, with the growth of the
Greek Society until its development
into city states, the said Greek word
became known as state
management.

Economics emerged only in 1776 as a

distinct discipline or science.
It was Adam Smith who was
responsible for the recognition of
economics as a separate body of
knowledge.
An Inquiry into the nature and
causes of wealth of nations,
published in 1776, became the bible
of economics for a hundred years.

Its immediate objective was to overthrow

mercantilist philosophy which held sway not
only in France but also in England.
In view of his monumental contribution to the
field of economics, Adam Smith has been
honored as the Father of Economics.
Contributions: Economic policies such as: 1).
Import liberalization, 2). Privatization, and 3).
De-regulation. Economic concepts like: 1).
Free trade, 2). Free market, and 3). Free
enterprise.

END