APPLIED ECONOMICS

• 3 STRANDS OF ECONOMICS AS SOCIAL AND APPLIED SCIENCE

  • Wealth
  • Decision-making
  • Allocation
• WEALTH

  -Implies wealth utilization for individuals saticfaction and societys welfare.
• Decision-making

  -As people produce or consume whether it is wealth-using. They make decisions which are vased on aternative choices.
• Consistent with the process of making decisions and choices is the process of allocation.
• 5 Key elements of economics as social and applied economics

  • social science
  • resources
  • human wants
  • allocation
  • scarcity
• Economics is a social science that delas with the allocation of scarce resources to meet the unlimited human wants.
• ECONOMICS AS A SOCIAL SCIENCE

  • It study the modes and aspects of human interactions
• ECONOMICS AS AN APPLIED SCIENCE

  • The study of observing how theories work in practice
• FOUNDERS OF ECONOMICS

  • John Stuart Mill
  • David Ricardo
  • Jeremy Bentham
• John Stuart Mill

  • Harsh critics make good thinkers
• David Ricardo

  • There can be no rise in the value of labour without a fall of profits
• Jeremy Bentham

  • It is vain to talk of the interest of the community, without understanding what is the interest of the individual
• Importance of economics

  • How to achieve social efficiency
  • give info to make informed choices
  • give forecasts for economy
  • How to fix market failure
  • understanding consumer behavior
  • opportunity cost of decisions
  • How to distribute resources
• Poverty

  • It is a restricting condition experienced by millions of families that prevents them in attaining the minimum level of consumption for subsistnce living
• Absolute Proverty

  • It is the lack of income to buy the basic food and necessities for subsistence living
• Absolute Provety

  • this is measured in terms of poverty threshold and poverty incidence
• Relative Poverty

  • Refers to the structure on how the national income is being distributed among households in an economy
• Relative Poverty

  • refers to the structure on how the national income is being distributed among households in an economy
• Relative Poverty

  • this is measured by the Lorenz Curve and the gini Coefficient
• Poverty Threshold

  • it is the income needed to purchase the minimum national requirements and other basic necessities for daily survival
• Poverty Incidence

  • It is the proportion of households in the country with family income lower than the poverty threshold or poverty line
• Lorenz Curve

  • it shows that the share of the various household groups(ranked from the poorest to the richest) on the total national income
• Gini Coefficient

  • It is a measure of income inequality derived from the lorenz curve
• The population of the Philippines has been increasing over several decades because of demographic change, the Philippines is now considered the 12th largest country in the world
• Technology is the manner or processing raw materials or intermediate inputs into transformed outputs through the use of factor inputs
• Labor-intensive Technology

  • A technology that is biased in the use of labor
• Capital-intensive technology

  • refers to use of more capital relative to labor in the production process
• Environmental sustainability and the country's development trust

  • the capacity of our economy to maintain its productive capacity and pursue its development goals will be constraine by the prudent use of natural resources for sustainable development
• Applied economics- the use of this term is believed to have started nearly 200 years ago, in the writings of Jean-Baptiste Say(1767-1832) and John Stuart Mill(1806-1873)
• Econometrics

  • application of statistical and mathematical theories to economics to test hypothesis and forecast future trends.
• Scarcity

  • is the limited nature of resources