ECON REVIEWER

A.
● Economics is the study of how individuals and nations make choices about
how to use scarce resources to fulfill their wants. A resource is anything that
people can use to make or obtain what they want.
● Whenever you make such as spending decision, each available choice
competes with every other available choice.
● Scarcity means that people do not and cannot have enough income, time, or
other resources to satisfy their every desire. Also a condition arises because
society doesn’t have enough resources to produce all the things people would
like to have.
● When a society provides for the needs of its people, it answers three basic
● economic questions. In so doing, it makes decisions about the way its limited
resources
● are going to be used. These three choices about WHAT, HOW, and FOR
WHOM to produce are not easy for any society to make. Nevertheless, a
society has few options. It must answer these three basic questions as long
as there are enough resources to produce all the things people want and
need
● Scarcity always exists, whereas shortages are always temporary. Shortage
often exist after major typhoons, floods, terrorism that destroy goods and
property. Temporary shortages of products such as gasoline may be caused
when imports are dramatically decreased forany reason.

B.
● The term economics comes from the ancient Greek word oikos (household)
and nemein (managea), which in effect meant managing a household, using
limited funds available in the most economical manner possible.
● Economics is the study of human efforts to satisfy what seems like unlimited
and competing wants through the careful use of relatively scarce resources.
● Scarcity is the basic problem in economics. Economics is the study of how
individuals and nations make choices about how to use scarce resources to
fulfill their wants.
● All societies must face the three basic questions of WHAT, HOW, and FOR
WHOM to produce.
● The huge increase in everyone’s income would not solve the economic
problem. Thus, the problem of scarcity is not due to a shortage of money, but
lack of resources needed to make all the things people want.
 C. ECONOMIC AS A SOCIAL SCIENCE
● Economics is classified as a social science because it deals with the
study of human’s life and how he lives with other men.
● There are three strands in the development of the definition of
economics. The first focuses on wealth. In previous decades,
economics has been defined- as a science of wealth getting and wealth
using. The second stresses the decision-making process. Currently,
economics has been defined a s a science of making choices. The
third concentrates on the allocation process. Many define economics
as a social science that deals with the allocation of scarce resources to
meet the unlimited human wants.
● Economics then, pertains to the study on how society creates its
material wealth, how it makes

D.
● Natural resources like marine resources drawn from the wealth of oceans,
timber obtained from forest resources, agricultural lands that yield grains and
other food crops, and the mineral resources extracted from various mining
sites, among others. These various forms of natural resources can directly
provide goods for current consumption used as raw materials
or intermediate inputs for the production of goods.
● Human resources, are qualities of human being that may include, labor,
intelligence, creativity, health, education, talents and many more. These
various characteristics of peoplegive them capacity to create value directly
through the provision of services and indirectly by becoming factor inputs of
production.
● Lastly, we have Physical resources or man-made resources that include
various types of buildings, equipment, technology, bridges, airports, factory,
plants, and other physical infrastructure that can be used to provide present
and future satisfaction.
● Because of the physical limitation and alternative uses of resources, the
concept of opportunity cost becomes prominent in the study of economics.
The choice in the use of resources in a particular activity should take into
consideration the benefits forgone from other alternatives which were not
chosen. Thus, there are sacrifices for the opportunity costs in
everything that we do.
E.
● A need is a basic requirement for survival.
● A want is a means of expressing a need.
● These differences are brought bydifferentiating factors on the consumption
habits of people by taste, income, environment, socioeconomic status, and
other factors among consumers.Since the factors can be influenced
intrinsically and externally, it is possible that human wants can expand and
multiply. This expansion and multiplication of human wants is one ofthe key
reasons why we have an economic problem.