Managerial Economics in the 21st Century
GDP as a Country’s Report Card: A Measure of Economic Well-being ...................................................................... 105 GDP Does Not Capture It All ................................................................. 107 Summary .............................................................................................. 109 End of Chapter Assessment: Measuring National Income .................. 111 113 Meaning and Use .................................................................................. 114 Importance of Money ........................................................................... 115 Concept of Banking ............................................................................... 115 Types of Bank ........................................................................................ 117 Central Banking in the Philippines ........................................................ 118 Monetary Policy .................................................................................... 119 Money Creation .................................................................................... 120 Summary .............................................................................................. 121 End of Chapter Assessment: Money and Monetary Policy................. 123 125 The Power of Compounding ................................................................. 126 Investing vs. Saving ............................................................................... 127 Financial Markets and the Economy ..................................................... 128 Real and Financial Assets ...................................................................... 129 Are Properties Investments, Too?......................................................... 130 Key Considerations in Investments ....................................................... 131 Financial Intermediaries........................................................................ 131 Summary .............................................................................................. 132 End of Chapter Assessment: Basic Finance ......................................... 133
CONTENTS CONTENTS
CHAPTER 8: MONEY AND MONETARY POLICY
Preface ........................................................................................................................... vii Acknowledgment ........................................................................................................... ix CHAPTER 1: THE ECONOMIC WAY OF THINKING 1 Is Economics a Science? ........................................................................ 2 How Do Economics Allocate Resources? .............................................. 3 What Is Scarcity? ................................................................................... 3 The Economic Way of Thinking ............................................................. 4 Rational Behavior .................................................................................. 7 Marginal Analysis .................................................................................. 7 Branches of Economics ......................................................................... 9 Methodologies of Economics................................................................ 9
CHAPTER 9: BASIC FINANCE
Basic Circular Flow ................................................................................ 10 Summary .............................................................................................. 11 End of Chapter Assessment: The Economic Way of Thinking ............. 13 15 What Is a Market? ................................................................................. 16 What Is Demand?.................................................................................. 16 What Is Supply? ..................................................................................... 20 Market Equilibrium................................................................................ 24 Movement and Shifting of the Supply and Demand Curve .................. 26 Summary .............................................................................................. 30 End of Chapter Assessment: Demand and Supply .............................. 31 33 What Is Elasticity? ................................................................................. 34 Price Elasticity of Demand .................................................................... 35 Income Elasticity of Demand ................................................................ 40 Cross-Price Elasticity of Demand .......................................................... 43 iii Price Elasticity of Supply ....................................................................... 47 Summary .............................................................................................. 50 End of Chapter Assessment: Elasticity and Its Application ................. 51 53 Consumer Behavior............................................................................... 54 Measuring Utility................................................................................... 55 Indifference Map .................................................................................. 59 The Budget Line .................................................................................... 59 Consumer’s Choice................................................................................ 62 Summary .............................................................................................. 66 End of Chapter Assessment: Consumer Behavior............................... 67 53 Consumer Behavior............................................................................... 54 Measuring Utility................................................................................... 55 Indifference Map .................................................................................. 59 The Budget Line .................................................................................... 59 Consumer’s Choice................................................................................ 62 Summary .............................................................................................. 66 End of Chapter Assessment: Consumer Behavior............................... 67 Price Elasticity of Supply ....................................................................... 47 Summary .............................................................................................. 50 End of Chapter Assessment: Elasticity and Its Application ................. 51
CHAPTER 2: DEMAND AND SUPPLY
CHAPTER 10: FISCAL POLICY AND PUBLIC EXPENDITURE 135 Keynesian Theory of Macroeconomics................................................. 136 Fiscal Policy as a Stabilization Tool........................................................ 136 Monetary Policy vs. Fiscal Policy........................................................... 137 Taxation in the Philippines .................................................................... 139 Economics of Tax................................................................................... 139 Equality and Equity in Tax ..................................................................... 142 Other Benefits of Fiscal Policy .............................................................. 143
CHAPTER 3: ELASTICITY AND ITS APPLICATIONS
v Can the Government Do It All: Case in the Philippines ......................... 144 Privatization .......................................................................................... 144 Public–Private Partnership (PPP) .......................................................... 145 Summary .............................................................................................. 146 End of Chapter Assessment: Fiscal Policy and Public Expenditure ..... 147 149 Business Cycles in the Economy............................................................ 150 Inflation ................................................................................................. 151 Price Index............................................................................................. 152 Purchasing Power of Peso ..................................................................... 154 Regulating Inflation ............................................................................... 155 Zimbabwe’s Case: A Victim of Hyperinflation in the 21st Century Modern Economy ............................................................................ 158 Wages and Employment ....................................................................... 160 Labor Force and Unemployment .......................................................... 160 The Economic, Psychological, and Social Costs of Unemployment...... 161 Types of Unemployment: Causes and Effects....................................... 162 The Connection of Agrarian Reform in the Economy........................... 164 The Role of Agrarian Reform in Economic Development ..................... 165 Agrarian Reform in the Philippine Context ........................................... 165 Summary .............................................................................................. 167 End of Chapter Assessment: Economic Issues .................................... 169 AND THE INTERNATIONAL ECONOMY 171 International Trade................................................................................ 172 Production, Consumption, and Trade ................................................... 173 Absolute Advantage and Implicit Cause ............................................... 174 Globalization ......................................................................................... 175 Roles of Trade Liberalization Organizations.......................................... 175 Summary .............................................................................................. 177 End of Chapter Assessment: Trade, Globalization, and the International Economy ...................................................... 179
CHAPTER 4: CONSUMER BEHAVIOR CHAPTER 4: CONSUMER BEHAVIOR
CHAPTER 11: ECONOMIC ISSUES
CHAPTER 5: REVENUE AND THE COST OF PRODUCTION 69 Definitions ............................................................................................. 70 Is Opportunity Cost a Cost? .................................................................. 71 Accounting Profit vs. Economic Profit................................................... 71 Price and Production............................................................................. 72 Summary .............................................................................................. 80 End of Chapter Assessment: Revenue and the Cost of Production .... 81 CHAPTER 5: REVENUE AND THE COST OF PRODUCTION 69 Definitions ............................................................................................. 70 Is Opportunity Cost a Cost? .................................................................. 71 Accounting Profit vs. Economic Profit................................................... 71 Price and Production............................................................................. 72 Summary .............................................................................................. 80 End of Chapter Assessment: Revenue and the Cost of Production .... 81
CHAPTER 6: MARKET STRUCTURES CHAPTER 6: MARKET STRUCTURES
83 What Is a Market Structure? ................................................................. 84 Perfect Competition ............................................................................. 85 Monopolistic Competition .................................................................... 87 Oligopoly ............................................................................................... 89 Monopoly .............................................................................................. 90 Summary .............................................................................................. 92 End of Chapter Assessment: Market Structures ................................. 93 95 Gross Domestic Product: A Measure of the Nation’s Output............... 96 Final Goods and Services ...................................................................... 97 The Expenditure Method in Measuring GDP ........................................ 100 GDP and the Incomes of Capital and Labor .......................................... 103 Nominal GDP vs. Real GDP .................................................................... 103 95 Gross Domestic Product: A Measure of the Nation’s Output............... 96 Final Goods and Services ...................................................................... 97 The Expenditure Method in Measuring GDP ........................................ 100 GDP and the Incomes of Capital and Labor .......................................... 103 Nominal GDP vs. Real GDP .................................................................... 103 83 What Is a Market Structure? ................................................................. 84 Perfect Competition ............................................................................. 85 Monopolistic Competition .................................................................... 87 Oligopoly ............................................................................................... 89 Monopoly .............................................................................................. 90 Summary .............................................................................................. 92 End of Chapter Assessment: Market Structures ................................. 93
CHAPTER 12: TRADE, GLOBALIZATION,
CHAPTER 7: MEASURING NATIONAL INCOME CHAPTER 7: MEASURING NATIONAL INCOME
Bibliography ................................................................................................................... 181 Index .............................................................................................................................. 189
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2025 Higher Education Learning Solutions for the Business and Accountancy Program 89
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