Health Eco (1st Lesson)

Economics: A social science concerned with using scarce resources to obtain maximum satisfaction of the unlimited material wants of society. Derived from the Greek terms oikia (household) and nomos (management). It has 4 components: production, income, employment and consumption.

Scarcity: Imbalance between the individual's desires and the means of satisfying those desires.

Natural / Free Good: Those endowed to us by nature of which no expense is involved.
Economic Good: Commodity or service that is useful to human beings but must be paid for.

Wants: a person's desires or preferences for specific ways of satisfying a basic need. (Basic = essential; Created = improvement of basic wants.)
*wants exceed resources necessary to obtain them
*therefore we must make choices
*choices lead to cost

Opportunity Cost: Monetary or other advantages surrendered for something in order to acquire it in competition with other potential users.


DIVISION OF ECONOMICS
Macroeconomics: Study of economic systems as a whole especially with reference to its general level of output. It considers consumers as a unit; focused on the structure and function.

Microeconomics: Study of individuals and small groups, particular households, firms. It studies economy in terms of individual areas and consumer behavior.

Fundamental Economic Questions:
1.) What goods and services must be produced and how much is to be produced?
2.) How shall these goods and services be produced?
3.) Who shall receive and use these goods and services?
4.) Is the economy’s capacity to produce developing over time?

ECONOMICS AND OTHER SCIENCES
1.) Geography – Economics development of society is always dependent on geographical factors.
2.) History – Historical events usually are heavily influenced by economic phenomena.
3.) Geology – Geological data is important on economic products such as petroleum and minerals.
4.) Politics – Economic decisions are always influenced by governmental policies.
5.) Home Economics – Development of subjects and practical skills necessary for good home management and family life.
6.) Sociology and Anthropology – Economic developments and consumer behavior are always influenced by cultural factors.
7.) Philosophy – Economists are guided by logical, ethical and moral principles when they formulate methods of organizing the economy.
8.) Mathematics – Algebraic symbols, variables and geometry can be used to formulate assumptions.
9.) Statistics – provides comparative data to help understand the complexities of a given economic condition.
10.) Psychology – Consumer behavior is heavily influenced by the individuals’ instincts and mental processes.
11.) Natural / Physical Science – Natural resources are needed to produce economic goods.

ECONOMIC SYSTEMS
1.) Capitalism: Economic system in which private individuals are free to invest their savings, purchase goods and hire labor as they wish to develop their enterprise.
a.) Pure – or laissez faire means that the government should not intervene with economic decisions.
b.) Modified – Government intervenes and regulates business up to a certain extent.
Rights: Private property, profits, business decisions and choice.

2.) Socialism: Aims at a collective or governmental ownership and administration of the means of production and control of the distribution of goods.

3.) Mixed Economies: Based on a mixture of public and private ownership of the means of production, and on a considerable public regulation of the business sector.

4.) Welfare States Economy: Ownership of income-producing property and its economic equivalent is widely diffused.

ECONOMIC RESOURCES / FACTORS OF PRODUCTION
1.) Land: All natural resources.
2.) Labor: Human activity that produces the goods or provides the services in demand in an economy.
3.) Capital: Any accumulated factors of production utilized to aid in the production of other goods.
4.) Entrepreneurial Ability: Needed to organize, own, promote, manage and assume the risks of business endeavour and to implement right decisions.
*Land and capital are considered property resources while Labor and entrepreneurial ability are human resources.
Economic Development refers to the transformation of natural resources into ever-more valuable processed goods and improvement of services, and the marketing of them. Hence, according to the constitution, it must be the attainment and promotion of the following:

1.) Better quality of life
2.) Gainful employment
3.) Economic Efficiency
4.) Price level stability
5.) Economic Freedom
6.) An equitable distribution of opportunity, income and wealth.
7.) Economic Security