Economics as a Social Science
Social Science
A study of society or parts of it by utilizing the scientific method of observation, hypothesis formulation, testing, and experimentation.
Economics tries to understand how members of a society behave and organize themselves to meet their individual and communal material needs and desires.
Other Related Social Sciences to Economics
Anthropology
The most comprehensive of the social sciences. It covers the biological, psychological, social, and cultural aspects of human life. It studies every aspect of human society, including social structure, aesthetic expression, language, and the belief system.
Political Science
Studies the mechanics of the distribution of power and is concerned with the relationship between authority and the masses.
Psychology
Studies society from the viewpoint of the individuals and groups. It finds out how society influences the individual's personality and how the individual responds to social stimuli and pressures.
Sociology
Studies society by analyzing human groups, institutions, and social relationships. It analyzes the social patterns that result from numerous individual reactions.
History
Systematic recording of past events and also a detailed and in-depth interpretation of the causes and effects of past events on the lives of the members of a society.
Resources
Natural, human, and man-made wealth that can provide satisfaction through the production of goods and services.
Wealth is an abundance of valuable material possessions or resources.
Categories of Resources
Natural
Forms of wealth derived from nature, including land, forests, mountains, rivers, and seas.
Human
Human labor is the most basic form of wealth. Brain power is also part of the human wealth of an economy.
Physical
Man-made things used in the production of commodities and services. SlideShare_Presentation (5)
Human Wants
The main concern of economics is the fulfillment of human wants among the competing uses of resources.
Categories
- Material
- Nonmaterial
Aspects (characteristics to be considered)
Physical – involves certain mechanism of nerves, muscles, and sense organs programmed to respond to certain stimuli.
Subjective – based on the consciousness of enjoying pleasure and avoiding the unpleasant in anything that one does.
Concept of Scarcity
Scarcity
Means more than limited, for everything in the material world is limited but not everything is scarce.
The concept of scarcity arises because of certain qualities of resources and human wants.
Resources are prolific in that they can be substituted for capital in the production of commodity.
Human wants are numerous and are multiplying as a result of several factors.
Concept of Economizing and Efficiency
There is a need to choose among the competing uses of resources in order that each scarce commodity will yield the highest level of satisfaction to the individual and to society. This involves the process called allocation.
Allocation
A process of choosing among competing ends which resources are going to be employed for the production of commodities chosen to satisfy the human wants that have a higher value in the priority system.
To economize is to choose something with the minimum costs or to choose that which will give maximum benefit to the individual and to society.
Efficiency is the proper use of resources to get the maximum benefit to society.
Allocation Process
There is no unique way of allocating or choosing how resources should be utilized to meet human needs.
Some societies have used customs and traditional beliefs as a basis for allocating the society's wealth and the fruits of its resources.
There are societies where planning boards decide where resources are to be employed on the basis of societal objectives and political orientations.
In many societies today, the price or market mechanism is used as a basis for allocation.
Why Study Economics?
Understanding the allocation process in an environment of scarcity.
Knowing why the government collects taxes from our incomes, from the things we buy, and from the things we own.
Knowing the basis for collecting taxes and the allocation of government revenues for various expenditures.
Understanding the economic explanation why the government provides the people with such services as education, public utilities, roads, and national defense.
Role of money
Knowing the basis of commercial relations among nations.
Knowing how societies increase their resources in order to grow and to improve the welfare of their members.
Learning the importance of economizing.
Guest Writing:
By: Tereso S. Tullao, Jr., Ph.D.
Prepared by: Gregar Donaven E. Valdehueza, MBA