Economics is a social science which deals to the phenomena of wealth getting and wealth spending activities of man to satisfy human wants. It is a classified body of knowledge concerning human relationships, clustered about man's effort to earn a living.
Four fields of Economics:
1. Production - process of creating, adding, increasing more utilities of the goods to satisfy human wants.
2. Distribution - proper apportionment or division of the income among the social needs. (Principles of Budgeting). Example is the pie graph of the household income. It is also the proper channeling of the goods from the producer to the ultimate or final buyer.
3. Exchange - it is a form of activity engaged by the sellers and buyers in a place known as market (known as marketing).
4. Government - an institution the protects, assists, regulates, manages, operates, and owns some industries.
Economic System - it is defined as combination of principles and practices according to which their daily activities are brought into relation with one another in order to provide for their daily needs or consumption.
Types of Economic System:
1. Capitalism
2. Socialism
3. Communism
4. Mixed Economy
Objectives of the Economic System:
1. Goods and services must be produced.
2. Efficiency must be encouraged.
3. Individual shares should be properly distributed in order to provide for the daily needs and consumption.
Major Economic Problems:
1. What kind of goods and services are to be produced? (QUALITY)
2. How many are to be produced?
3. How are they to be produced? (STATE OF TECHNOLOGY)
4. For whom are they to be produced?
Basic Units in an Economic System:
1. Household - it plays a dual role in the system. First, it acts as a buyer. Second, it provides the needed natural resources (e.g., capital, labor, and agricultural land).
2. Business Concern - It gives the nature and kind of business. It also explains the different forms of business organization and the total assets needed as to the kind of business organization.
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