5 Subdivisions in Economics 1. Production- concerned with the creation of economic goods Kinds of production 1.

Primary- traditional activities of extracting valuable objects 2. Secondary- involves manufacturing or processing 3. Tertiary- does not involve raw materials for manufacturing but rather the manufacturing of valuable services to fellowmen Factors of production 1. Land resources 2. Labor Force 3. Capital 4. Entrepreneurial Abilities Exchange Consumption Kinds of Consumption 1. Final or Direct Consumption 2. Productive Consumption 3. Wasteful Consumption Distribution Kinds of Distribution 1. Functional Distribution 2. Personal Distribution Public Finance

2. 3.

4.

5.

Tools of Economics 1. 2. 3. 4. Observation- involves seeing and observing for the past and the past Economic Analysis Statistical Analysis- SWS (Social Weather Survey) Experiments

Economic Sectors 1. 2. 3. 4. 5. Individuals Households- income receivers Businesses Government International Sector

Kinds of Businesses 1. Single/Sole Proprietorship

2. Cooperative Partnerhip 3. Partnership 4. Corporation Kinds of International Sector 1. Technology 2. Trade Liberalization 3. Trade Agreement APEC- Asian Pacific Economic Conference NAFTA- North American Free Trade Agreement EU- European Union EEC- European Economic Community Classification of Forests: 1. 2. 3. 4. 5. 6. 7. 8. Boreal Forest- one layer of 20 meter taiga/trees Temperate deciduous forest- broadleaf deciduous Temperate evergreen forest- needle leaf, redwood, eucalyptus Mediterranean forest- evergreen oaks/laurels Tropical Rainforests- wide array of tress Tropical Seasonal forests- bamboos and plants Savannas- widely spaced Mountain Forest- deciduous, needle leaf & pines

Demographic and Social Characteristics 1. 2. 3. 4. 5. 6. 7. 8. Sex and Age Composition & Marital Status Language Religion Summary of Phil. Vital Statistics Fertility- birth rate Mortality- death rate Marriages Migration

Economics- study of human behavior in using resources to satisfy human wants Macroeconomics- large or aggregate units Microeconomics- individual smaller units

Scarcity- state where limited resources are not enough to satisfy the wants and needs of the people at the time when they are actually needed Optimum Allocation- the best solution to scarcity GNP- Gross National Product GDP- Gross Domestic Product Fields of Discipline in Economics: Sociology- deals with man s relation w/ different social groups Political Science- the economy and the govt. work hand in hand Psychology- study of human mind that affects man s behavior Physical Science- the result of advancement in science and technology Philosophy and Theology History and Anthropology- study of the past will help us forecast of the future and learn from past mistakes 7. Commerce and Business Administration 8. Math and Statistics Resources- are materials that are used to help satisfy the human needs Physical Resources/ Physical Environment- consist of everything that exist w/in of around us including the climate and the weather Topography- study of land formation 4 types of resources 1. Inexhaustible resources- resources w/c cannot be used up 2. Renewable resources- resources w/c can be renewed a. Forests- large areas of land by trees Deforestation- destruction of trees Reforestation- uplifting of trees b. Soils c. Plants d. Animals 3. Non- Renewable- resources w/c cannot be replaced a. Coal b. Petroleum- oil and black gold 4. Recyclable- can be used more than once 1. 2. 3. 4. 5. 6.

Human Resources- people who will manipulate machines, handle equipment and plan undertakings to meet the objectives NSCB- National Statistical Coordination Board Labor Force- this consists of workers or laborers from 15 years and above and they are actively engaged in some forms of production Employment- it is the state where the workers or employees are willing and able to work and find job suited to their skills and capabilities Unemployment- a state wherein one could not find a job due to his lack of skills and abilities Literacy- the ability to read and write Functional Literacy- not only the ability to read and write but also the ability to carry out common tasks Implications for Low Literacy Rate: 1. Large youth population 2. Senior citizens are still gainfully working 3. Unemployment and Underemployment rate are still rising Basic Economic Concepts 1. Scarcity a. Choices - Individuals - Businesses - Government b. Possibility Concepts c. PPF (Production Possibility Frontier) 2. Allocation 3. Wants needs 3 economic questions 1. What to Produce 2. How to Produce 3. For whom to Produce Main Problems in Equitable Allocation of resources: 1. Scarce government funds 2. Poverty/Uneven Distribution of income 3. Overpopulation

Main types of economic system 1. Traditional economy- a very simple system w/c applies intuitive system in solving economic problems in primitive societies 2. Command economy- a type of economy where production is decided upon after conscious selection among possible alternatives. It operates like a military where the decisions is made from the top authority and are relayed to the majority of the people in the economy. 3. Market economy- it solves the basic problem in production by conferring with the majority of the people. It operates politically in a democratic process. Democracy is the rule of majority. 4. Mixed Economy- it is the economy that is very much prevalent in some countries that combine the market and command systems.

Feudalism
Feudalism- is a system of relationship among the members of the upper class of medieval Europe whereby a person is given a piece of land in exchange for military and political services rendered. Vassal- belonged to a warrior class Manors- agricultural estates that were formed when the empire was divided after its fall Feudalism- was derived from the word Feodum Vassal s obligation to the feudal lord 1. He must render service at the time when it is needed 2. He is responsible for planning all the activities in the manor 3. Financial obligation at the time when it needed by the lord like marriage of the lord s daughter. Pay part of the ransom money when the lord would be kidnapped, or anytime that the manor needs some financial contributions Causes of decline of Feudalism 1. Land became so significant and there was a widespread use of money in towns and cities 2. Spread of capitalism and gunpowder

Caciquism
Caciquism- a system of landlordism in the Philippines during the Spanish colonial period Cacique- rich landlords Tenants or kasama- farmers who tilled the land

System of Land Agreements 1. Inquilino System- also known as leasing system since rent was paid to the cacique who was an absentee landlord. 2. Kasama System- is the system of partnership where the tenant and the cacique contributed to the cultivation of the land after w/c the production would be divided equally 3. Tenant-servant system- the tenant enjoyed free board and lodging in the sense that he was given a small house and lot near the vast land known as hacienda that he would cultivate 4. Clearing System- this system applies to the virgin land that require some clearing Evils of Caciquism 1. Usury System it is the practice of lending money that prescribed a very high rate of interest like the ff: a. Takipan- it prescribed 100 percent rate of interest per harvest b. Talindua- it prescribed 50 percent rate of interest per harvest c. Terciahan- it prescribed 33 1/3 percent rate of interest per harvest 2. Paternalism- refers to the complete dependence on the lord, where he was viewed as a great provider of everything. This practice, resulted to the laziness among the Filipinos who could no longer decide on their own and could not stand on their own feet 3. Asking of free services- because of utang na loob or debt of gratitude, the money borrowed was paid not only in cash but even in services 4. Curtailment of the right of suffrage- it is not only the land and its harvest that is being controlled by the cacique but even his tenant s mind specifically his choice of candidates

Mercantilism
Mercantilism- is a political theory that was widely accepted in Europe in the 16th and 18th century Mercantilist doctrine- states that wealth of a nation is measured by the amount of gold and silver it has accumulated through export of its products as well as conquest of small states

Capitalism
Capitalism- is an economic system where the control of the enterprise is in the hands of the individuals and the private sector Features: 1. Property ownership- it is the right to aquire, use and dispose anything of value 2. Freedom of enterprise- freedom to enter and leave any business venture. 3. Competition- Since anybody can enter business, more people produce the same product of different brands. 4. Profit motive- it is the core of capitalism

Factors of the characteristics of Capitalism 1. 2. 3. 4. 5. Citizens Business Market Income Government

Disadvantages of Capitalism Society 1. Exploitation 2. Inequalities Economy 1. 2. 3. 4. Surplus production Unemployment Stiff Competition Concentration of the economic resources in the hands of the few

Socialism
Socialism- is the system of public ownership and control of the major means of production while limited ownership and control of small scale industries Karl Marx- Marxism Father of socialism

Factors that gave rise to Socialism 1. Industrial Revolution 2. Rise of bourgeois and proletarian(working) class 3. The enlightenment s secular and nationalistic view of man and society Utopia- ideal society where there is justice and equality Characteristics 1. Controlled private property 2. Equal distribution of wealth

Communism
Communism- is an economic system that allows the complete ownership, management and operation of all the means of production and distribution of goods and services by the government Also derived from the latin word communis w/c means

USSR- Union Soviet Socialist Republicc Russia- 1st communist state Characteristics 1. There is no private ownership of property 2. The economy is centrally planned 3. There is the use of force or violence Strengths 1. There is no competition 2. The individuals work for the benefit of the state 3. The govt. runs the economy of the state Negative Practices 1. The dictator allows public criticism 2. Absence of free enterprise

Facism
Facism- from the Latin word fascis, a bundle or rod, to symbolize authority and power Benito Mussolini- founder of the fascist movement Characteristics 1. The rule of totalitarianism of dictatorship 2. Patriotism and war-like policies 3. The national planning board planned the conomy Advantages 1. 2. 3. 4. Emphasis was centered on the economy Workers enjoy equal wages and benefits Production was not delayed by strikes Limited ownership was allowed