Branches, Divisions,

and Tools of
Economics
 Branches
of
Economics
 Macroeconomics
• It deals with the economic behavior of the
whole economy or its aggregates such as
government, business, and households
• And aggregate is composed of individual
units.
• The operation of the various aggregates and
their interrelationship is analyzed to provide a
profile of the economy as a whole
Macroeconomics is concerned with
the discussion of topics like gross
national product, level of
employment, national income,
general level of prices, total
expenditures. It is also as
employment and income analysis.
 Microeconomics
• It deals with the economic behavior of
individual units such as the consumers, firms,
and the owners of the factors of production.
• Such specific, economic units constitute a
very small segment of the whole economy.
• Their activities are presented and discussed
in details
 For Example :

the price of rice, the number of

workers of a certain firm, the
income of Mr. Ong, the
expenditures of PLDT

Microeconomics is also known as

Price Theory
 *** When we study the income or
expenditure of Bank of the
Philippines Islands, we are dealing
with Microeconomics
But when we deal with the total
income or total expenditures of the
whole banking industry, then we
are involved in the study of
Macroeconomics
*** When we discuss the individual
consumer, we are dealing with
Microeconomics

**** When we talk about the

aggregate consumers, we are
studying Macroeconomics
 While Microeconomics and
Macroeconomics focus on different
subjects, they rely on virtually
identical tools.

Both use the supply and demand.

 Division
of
Economics
 PRODUCTION
This refers to the process of
producing or creating goods needed
by the households to satisfy their
needs.

The factors of production are called

inputs
The goods and services that have
been createdare called ouputs of
production
 DISTRIBUTION

This refers to the marketing of goods

and services to different economic
outlets for allocation to individual
consumer

In monetary terms, this is the

allocation of income among persons
or household
 EXCHANGE

This is a process of transferring

goods and services to a person or
persons in return for something

the medium of exchange used in the

market is money, meaning we can
exchange our money with goods and
services.
 CONSUMPTION
This refers to the proper utilization
of economic goods

Goods ad services could not be

utilized unless you pay for it.

Consumption is spending money for

goods and services in order to yield
direct satisfaction
 Public Finance
This pertains to the activity of the government
regarding taxation, borrowings and expenditures.

It deals with the efficient and fair distribution of

public resources in order to achieve social
benefits.
This means government programs and projects
which are funded with taxes and loans are
properly implemented and managed to generate
maximum and optimum benefits to all members
of society
Tools of Economics
 Logic
It is a science that deals
with sound thinking and
reasoning
 Mathematics
It is a science that deals
with numbers and their
operations
 Statistics
It is the branch of
mathematics that deals
with the analysis and
interpretation of data.