University of the Cordilleras
College of Teacher Education
Module1:
ECONOMICS AND DEVELOPMENT
ECONOMICS
- Comes from the Greek word “oikanomia” meaning “household
management”.
- “study of economic activities of a man. It is only concerned with the wealth-
getting and wealth-using activities pf a man”
- a broad ranging discipline that uses a variety of techniques and
approaches to address important social questions.
- Proper allocation and efficient use of variable resources for the maximum
satisfaction of human wants. (Fajardo)
- study of how societies use scarce resources to produce valuable
commodities and distribute them among different people. (Samuelson)
- scientific study which deals with how individuals and society in general make
choices. (Sicat)
- branch of knowledge that deals with the production, distribution and
consumption of goods and services. (Webster)
Nature of Economics:
1. Economics as a SCIENCE
-Economics is also a systematic study of knowledge and facts. All the theories
and facts related with both micro and macroeconomics are
systematically collected, classified and analyzed.
- Economics deals with the correlation-ship between cause and effect.
-All the laws in economics are also universally accepted.
- Theories and laws of economics are based on experiments.
- Economics has a scale of measurement.
Types of Science:
Types Explanation
Positive Science - deals with all the real things or
activities.
- deals with all the practical
things.
- gives the solution what is?
What was? What will be?
Normative Science - deals with what ought to be?
What ought to have
happened?
- offers suggestions to the
problems.
- statements dealing with these
suggestions are coming under
normative statements.
2. Economics as ARTS
-“Knowledge is Science, Action is Art”, T.K Metha
- art is the practical application of knowledge for achieving particular goals.
- gives guidance to the solutions of all the economic problems.
3. Economics as SOCIAL SCIENCE
- deals with the study of man’s life and how he lives with other men.
- concerned with human beings and his behavior.
- deals with relationship established in the production and consumption of
goods and the transfer of wealth to produce and obtain those goods among
people.
Importance of Economics:
1. physical existence in this world depends upon economics.
2. people cannot live without production and consumption.
3. guides how to make a living, how to use our money wisely, how to run a
business, how to distribute properly our available resources and how to
maximize our profits and consumer’s satisfaction.
4. understand problems facing the citizen and the family.
5. help government promote growth and improve the quality of life.
Divisions of Economics:
1. Production
- process of producing or creating goods needed by the households to satisfy
their needs.
- factors of production are called inputs which we call the raw materials and
outputs as the finished product.
2. Distribution
- marketing of goods and services to different economic outlets for
allocation of individual customers.
- in monetary terms, it’s the allocation of income among individuals.
3. Exchange
- process of transferring goods and services to a person or persons in return for
something.
- At present, the medium of exchange used in the market is money.
4. Consumption
- proper utilization of economic goods.
- Spending money for goods and services in order to yield direct satisfaction.
5. Public Finance
- pertains to the activities of the government regarding taxation, borrowings
and expenditures.
- deals with the efficient use and fair distribution of public resources.
DEVELOPMENT
- progressive process.
- involves the interaction of different factors.
- focuses on improving fiscal, economic, and social conditions
Dimensions of Development:
1. Spiritual development
- acknowledging one’s spiritual in nature, human beings and society to
do the strong sense of justice.
2. Human Development
- existing measures of human development, which are limited to health,
education and income.
- indicate some improvements over time.
3. Social and Cultural Development
- promoting resource access and upholding property rights.
- promoting environmental awareness, inculcating environment ethics
and supporting environment management action.
4. Political Development
- empowering the people.
- maintaining peace and order.
5. Ecological Development
- adopting environmental management weapons in policy and decision
making.
- protecting the environment and conserving natural resources.
6. Economic Development
- maintaining a sustainable population.
- maintaining productivity and profitability of environment and natural
resources.
7. Sustainable Development
- maintaining or protecting all the factors:
a. Holistic Science and Appropriate Technology
b. National Sovereignty
c. Global Cooperation
d. Population
e. Gender sensitivity
