CONSUMPTION )- h The HOUSEHOLD is the basic consuming unit in the economy. It maximizes its satisfaction through the proper allocation or mix expenditures within the context of budget allocation. Opportunity cost defined as the value of a forgone alternative of a specific resources. The BUSINESS FIRM serves as the economy's producing unit to satisfy human wants with goods and services. Hire workers and buy raw materials. RESOURCE-OWNERS generates income from the use of resources. The owner of the land on which the factory is constructed charges rent for the use of the property. ECONOMICS 1. ECONOMICS studies how prices of land, labor, and capital are determined, and how these prices are used to allocate scares resources. 2. ECONOMICS looks into the behavior of financial market and how they allocated capital to the rest of the economy. 3. ECONOMICS looks into distribution of income and into ways of helping the poor without causing harm to the country's economic performance. 4. ECONOMICS studies the impact on growth of government spending, taxes, and budget deficits. PAGOSO, DINIO B VILLASIS; INTRODUCTORY MICROECONOMICS;3RD EDITION; RE BOOK STORESOME ECONOMIC PROBLEMS I 1. Unemployment of labor or other resources; I 2. Economic instability that causes highs and lows in production and investment levels; I 3. Low level of growth and development which make it more difficult for underdeveloped and developing nations to rise from their lovvr levels of income and employment; r 4.lnequality in income distribution resulting in the concentration of nation's wealth in the hands of a few; #- 5. Determination of the type of economic system to adopt to fit the country's peculiar conditions and needs. ECONOMIC ACTIVITY Man's basic economic activity consists of efforts to satisfy human wants with the use of goods and services. THREE ELEMENTS: 1. HUMAN WANTS is unlimited and vary from need( food, shelter, clothing). Man is subject to creates wants, developed due to the effects of advertising and demonstrative effects of consumption. 2. THE USE OF RESOURCES. The basic economic resources of the nation consists of lad, labor, capital, and entrepreneurship. 3. TECHNIQUE OF PRODUCTION which shows how resources are used and combined its production