What Is Economics and the Two Sub-Categories of Economics?

What Is Economics and the Two Sub-Categories of Economics?

Module 1: What is Economics and the Two Sub-Categories of Economics?

"Economics is the study of how people choose to use resources". (http://www.vanderbilt.edu)

Resources are not just about money but it also includes land, buildings, talent, time and others.

Choices involve how much time you want to give to your work, family, friends and how much money you want to invest to your business or spend for your personal needs. People use resources to improve whatever they have or even misuse the resources available to satisfy their needs and wants. Economics is not just about the decisions made by governments or businesses which we think have a greater impact to each individual. It is about how we make choices everyday- choices on the use of different resources, and the fact is, all resources that we need each day is limited.

In the world today, we all live in scarcity. We cannot have, all the things that we want or need. We have to make choices! Economics touches almost every aspect of our lives, from unemployment, prices of goods and services, wages and politics. Many problems that dominate newspaper headlines are economic problems. In the Philippines today, economics is one of the big issues like the country's debt, lack of jobs, inflation, increase in taxes and many more.

MACROECONOMICS AND MICROECONOMICS

"Microeconomics starts by thinking about how individuals make decisions. Macroeconomics considers aggregate outcomes. The two points of view are essential in understanding most economic phenomena". (American economic Association)

Microeconomics and macroeconomics can be explained with the following examples:

I received 5,000 pesos from my telework job. Since it's the first time to receive it through my ATM, I was so excited. I already listed the things that I want to buy. First is to buy a new pair of shoes, an expensive bag and some balloons for my 3 nephews. The money that will be left will be given to the youth ministry of our church.

The next day, I went to Lee Plaza and bought a new pair of shoes worth 2,500 and a new bag which costs 1,500 pesos.

When I went to Lee Plaza lobby, I was dismayed that they did not sell 3 balloons or even a single balloon. They sold packs of 50 balloons. I promised my nephews to buy balloons. I decided to either buy the 100 balloons or sacrifice my ministry donation.

I approached the owner and beg to sell 3 balloons for me. And he said ''yes! I realized there's a demand of selling the balloons separately".

I was so happy that I bought everything.. I bought what I promised to my nephews (balloons), my wants (bag and shoes) and the remaining money to be donated to the youth ministry.

In this part of micro economics, it shows how I achieved my goals and to give up my donation in order to