Introduction

Based on Dr. Tereso Tullaos

textbook entitled,
Elements of Economics.

Definition

a social science that

deals with the
efficient allocation of
scarce resources
among its alternative
uses to satisfy
unlimited human
wants and needs

http://www.hsu.edu/uploadedImages/Econed/2007%20Economics%20Fair.jpg

Definition

As an allocation of wealth (arising

from the scarcity of resources)
As creation and consumption of
wealth (expansion of wealth)
As a science of choice

Scientific Method
1.
2.

3.
4.
5.

Formulation of the problem

Establishing possible answer or
hypothesis
Gathering data and information
Treatment and analysis of data
Interpretation of results together
with the conclusion

Scientific Method
Formulation of the
Problem
Arises from existing
issues or limitations of
previous studies

Examples include causes

of poverty, implications
of the minimum wage on
the unemployment rate,
etc.

Scientific Method
Establishing a Hypothesis
Preliminary answer to the problem

http://biology.ucf.edu/~pascencio/images/Hypothesis.jpg

Scientific Method

Gathering Data and Information

Approach depends on the objectives of
the study

Historical approach trace the roots of

contemporary issue or problem
Experimental method compare effects of
outside intervention, for example of food
assistance, on consumption patterns

Methods include survey, FGDs, using

key informants

Scientific Method

Treatment of Data
Refers to the method of arranging,
manipulating, and testing data so
that it may be suitable for analysis

General description of the data set

(i.e., central tendency)
Manipulated to make inferences or
conclusions about the characteristics
of the data set

Scientific Method

Interpretation of
Results &
Conclusions
Answering the
problem
Conclusion may
accept or reject
the hypothesis
http://www.drybonesproject.com/blog/D09215_3.gif

Positive vs. Normative

Economics

Positive Economics is descriptive in

approach. It illustrates what is
happening to various actors, sectors
and institutions within and outside
the economy.
Normative Economics is prescriptive
in approach. It directs us on what
ought to be done.

Other Tools

Use of Mathematics effective in

describing relationships between
economic variables
Using Models aids in illustrating
hypotheses, theories, and estimates
Using Graphs representations of
economic models

Other Tools

Using Statistical Analysis verifies

the validity of economic
relationships as applied to reality
(i.e., econometrics)
Ceteris Paribus everything else
remaining the same or all else
constant

http://www.spsu.edu/cccenter/career/Starting_Line2.jpg