SUPPLY AND DEMAND

DEMAND is the desire or need of human beings to consume a good or avail of a service. It is the willingness
or ability of the consumer to pay goods and services.
Demand Schedule
Chart or table showing the price of the good and the quantity demanded
Demand Curve
Graphic representation of the relationship between the price of a commodity and the quantity demanded
Law of Demand
- states that as Price (P) increases the quantity demanded (Qd) decreases ; as the Price (P) decreases
the quantity demanded (Qd) increases, considering all other factors remain constant.

Determinants of Demand
PRICE is the only factor influencing the demand for a commodity.
1. Change in the income of consumer
2. Change in taste and preference
3. Change in the number of consumers(population)
4. Change in the price of related goods
A. COMPLIMENTARY GOODS
B. SUBSTITUTE GOODS
5. Expectations in the change of price

Related Goods and Services

 Substitutes are goods that can serve as replacements for one another; when the price of one
increases, demand for the other goes up. Perfect substitutes are identical products.
 Complements are goods that “go together”; a decrease in the price of one results in an increase in
demand for the other, and vice versa.

Law of Supply and Demand

if price is higher, supply is greater while demand is lower; if price is lower, supply is lesser while
demand is greater.

Equilibrium

– States that the individual quantity demanded depends on the market price

– Consumers are willing to purchase exactly the amount of the goods that produces are willing to produce.

– Refers to a situation in which the price has reached the level where quantity supplied equals quantity
demanded (equilibrium point)

– Shows the agreement between the seller and buyer in terms of price and quantity of the product.

Equilibrium Conditions:

- Qd and Qs are equal

- producers and consumers have agreed to sell and buy respectively at one price and at one quantity.

1. Equilibrium price – the price that balances the demand and the supplied (where Demand and
Supply intersects at a certain price in the graph)

2. Equilibrium quantity – the quantity supplied and quantity demanded at the quantity price
(where the Demand and Supply intersects at a certain quantity in the graph)

2. SURPLUS - where S is more than the D

3. SHORTAGE - where Sis less than the D

NATIONAL INCOME

This is the aggregate income of the country earned by the nationals through the production of goods and
services for a certain period of time.

Sum of all factor incomes received by the owners of factor inputs for the use of the services of their resources.
GDP– This is the measure of the final output produced by the factors of production located in the domestic
economy regardless of who owns these factors. This is the broadest quantitative measure of a nation’s total
economic activity. This represents the monetary value of all goods and services produced with in a nation’s
geographic borders over a specified period of time. This is also used to measure the economic performance of
a certain country.

GNP– This is the measure of the market value of the final goods and services produced by the national
agencies/citizens of a country in a given year.

- measures the total income earned by the citizens of an economy regardless of the country where their
factor services were used.

Four (4) components in calculating national income

1. Household expenditure/consumer expenditure
2. Producer expenditure/gross investment
3. Government Expenditures on goods and services
4. Net exports/exports minus import
2. PURPOSE OF TAXATION

1. To collect revenue for the government

2. To redistribute income
3. To correct adverse balance of payments
4. To check consumption of goods which are considered undesirable
5. To protect local/infant industries
6. To influence population trends to trade
7. To reallocate resources
8. To create a sense of identity
3. SOURCES AND ORIGIN OF TAXES
1. Constitution
2. Presidential Decrees
3. BIR Regulations
4. Judicial Decisions
5. Local Gov’t Ordinances
6. Observance of International Agreements
7. Administrative Ruling and Opinions

CLASSIFICATION OF TAX ACCORDING TO RATE OF INCREASE:

 Progressive Tax – the higher the income the higher the tax
 Proportional Tax – the tax rate is constant and unaffected by the level of income
 Regressive Tax- the higher the income the lower the tax rate.

CLASSIFICATION OF TAXES ACCORDING TO PAYMENT

1. Direct tax ( professional tax, community tax, income tax

2. Indirect tax ( VAT)

LAND REFORM
3. Is a program that aims to provide lands to farmers;
4. Involves the transfer and control of land ownership to the tiller and farmers.

AGRARIAN REFORM

 The redistribution of lands, regardless of crops or fruits produced by farmers and regular farm workers
who are landless, irrespective of tenurial arrangement
 Include the totality of factors and support services designed to lift the economic status of the farmers
and their beneficiaries to physical redistribution of lands, such as production, profit sharing, labor
administration and the distribution of shares of stocks.
PRINCIPLES OF AGRARIAN REFORM

1. To promote social justice

2. To move the nation towards sound rural development and industrialization
3. To establish owner-cultivatorship of economic sized farms as basis of Philippine agriculture.

*RA 6657 – Comprehensive Agrarian Reform Law of 1988 signed by the late Pres. Corazon Aquino.
RA 6657 - Comprehensive Agrarian Reform Law on June 8, 1988 signed by the late Pres. Corazon Aquino. It
is an act Instituting the CARP in order to promote social justice and industrialization, providing mechanism for
its implementation and other purpose.

COVERAGE OF CARP

1. All alienable and disposable lands of the public domain devoted to or suitable for agriculture.
2. All lands of the public domain in excess of the specific limits as determined by the senate.
3. All other lands owned by the gov’t devoted to or suitable for agriculture.
4. All public lands devoted to or suitable for agriculture regardless of the agricultural products
raised or can be raised.

RETENTION LIMITS

1. Five(5) hectares for land owners

2. Three (3) hectares to be awarded to each child of the landowner subject to:
a) At least 15 years old and actually tilling the soil or directly managing the farm.

BENEFICIARES

1. Agricultural lessees and share tenants.

2. Regular farm workers
3. Seasonal farm workers
4. Other farm workers
5. Actual tillers or occupants of public lands.
6. Collectives or cooperatives
7. Other directly working on the lands.

SALIENT FEATURES OF CARP

1. Covers all agricultural land and not only devoted to rice and corn.
2. Covers only those privately-owned tenanted lands but also that of agricultural lands owned by Multinational
Corporations and commercial firms.
3. Lower retention limits of three hectares.
4. Rights of indigenous communities are protected to ensure their economic and socio-cultural well being.
5. Lands awarded to beneficiaries shall be paid to Land Bank of the Philippines in 30 annual amortization at six
percent interest per annum.

 UNIVESAL PRINCIPLES OF COOPERATIVES

1. Open and voluntary membership

2. Democratic control
3. Limited interest on capital
4. Education/training funds
5. Continuing membership
6. Cooperation among cooperatives.

TYPOLOGIES
A. According to level of cooperatives
1. Primary – members of which are natural
2. Secondary – members of which are primaries
3. Tertiary – members of which are secondary upward to one or more apex organizations

B. According to Services rendered

1. Credits
2. Consumer
3. Producers
4. Marketing cooperative
5. Service
6. Multipurpose
 ANNA'S DEM AND
SCHEDULE FOR
T ELEPHONE CALLS
QUANTITY
PRICE DEMANDED
(PER (CALLS PER
CALL) MONTH)
$ 0 30
0.50 25
3.50 7
7.00 3

Price of soybeans per bushel ($)

10.00 1
15.00 0
6
5
4
CLARENCE BROWN'S 3
SUPPLY SCHEDULE
FOR SOYBEANS 2
QUANTITY
SUPPLIED 1
PRICE (THOUSANDS
(PER OF BUSHELS 0
BUSHEL) PER YEAR)
$ 2 0 0 10 20 30 40 50
1.75 10 Thousands of bushels of soybeans
2.25 20 produced per year
3.00 30
4.00 45
5.00 45