Economics to individual consumers.

In monetary terms, this is

the allocation of income among households
 is the study of how individuals, business firms,
governments, and societies as a whole make 3. Exchange – This refers to the transferring goods and
choices under conditions of scarcity services to a person or persons in return for
something. At present, the medium of exchange
 Is a broad ranging discipline that uses variety of used in the market is Money.
techniques and approaches to address important
social questions 4. 4. Consumption – refers to the proper utilization of
economic goods. However, goods and services
 It is a study on how people allocate their resources cannot be utilized unless you pay for it.
on a specific matter or situation that can result best
with regards to decision making. 5. 5. Public Finance – This pertains to the activities of
 Came from the Greek word “oikanomia” meaning the government regarding taxation, borrowings and
household management expenditures. It deals with the efficient use and fair
distribution of public resources in order to achieve
Importance of Economics maximum social benefits. Its goal is to use funds to
be properly implemented to generate maximum
 Understand problems facing the citizen and the
and optimum benefits for all members of society.
family

 Help government promote growth and improve the Economic Resources

quality of life while avoiding depression and
inflation 1. Land – refers to resources provided by nature such
as fertile soil, forests, water and mineral deposits.
 Analyze fascinating patterns of social behaviour It is considered economic resources because it has a
price attached to it. It is usually limited resources
 Maximize our profits and consumer’s satisfaction for many economies but some are also renewables.

 How to allocate our money wisely 2. Labour – Is the physical and mental effort human
being used to produce goods and services. It
Two Branches of Economics represents human capital available to transform
raw or national resources into consumer goods
 Macroeconomics – deals with the economic
behaviour of the whole economy or its aggregates 3. 3. Capital – Has two economic definitions as a
such as government, business and households. factor of production. It can represent the monetary
resources companies use to purchase natural
- stands back from individual parts of an economy and
takes an overall view of the economy. resources, land and other capital goods. Capital
also represents the major physical assets
Examples: GNP, GDP, Level of Employment, National individuals and companies use when producing
Income, General level of Prices, Total Expenditures, goods and services.
Government Policies
4. 4. Entrepreneurship – refers to the ability that
 Microeconomics – deals with the economic
behaviour of individual units that constitute a very some people have for organizing and other
small segment of the whole economy resources, land, labour, capital to produce goods
and services.
 Examples: Consumers, firms, owners, investors
5. 5. Foreign Exchange – refers to the dollar and dollar
Division of Economics reserves that the economy has, foreign exchange is
part of economic resources because we need
1. Production – This refers to the process of producing
or creating goods needed by the households to foreign currency particularly dollars in international
satisfy their needs. The factors of productions trading and buying of raw materials from other
Inputs and the goods and services that have been countries
created are called Outputs of production

2. Distribution – refers to the marketing of goods and

services to different economic outlets for allocation
Basic Economic Problems confronting the
development of the Philippines in the 21st
century FACTORS AFFECTING THE DEMAND OF A
COMMODITY
A. POVERTY AND UNEQUAL DISTRIBUTION OF INCOME
• INCOME
- Limited or without resources and cannot earn
sufficient income that can provide the minimum
nutritional requirements for daily living and the • TASTE
basic necessities of clothing and shelter.
• EXPECTATION
B. DEMOGRAPHIC CHANGES AND ITS ECONOMIC
IMPLICATIONS • MARKET

If the economy is growing fast, this increase in labor may

• PRICES OF OTHER COMMODITY
not be an issue. However, if the economy is not growing as
fast as the growth of labor force, the problem of
The prices of many commodities may have an effect on
unemployment may ensue.
the demand of a particular good, the influence of related
C. LOW INVESTMENT IN HUMAN RESOURCE DEVELOPMENT goods is more pronounced.

Modern economies go beyond formation of human capital PRINCIPLE OF DIMINISHING MARGINAL

and pursue the development of knowledge capital in UTILITY
pushing their economies forward. Knowledge capital is
formed through heavy investments in higher education, As a buyer continues to consume a good his total
science and technology, and research and development. satisfaction or utility increases; however, the additional unit
or marginal satisfaction decreases as a buyer consumes an
D. WEAK INFRASTRUCTURE additional unit of good.

- The inadequate infrastructure of a country has SUPPLY CURVE

debilitating effects on the households, individuals,
business firms and economies. • Is a schedule showing a direct or positive
relationship between the price of a commodity and
Demand is an economic principle referring to a consumer's
level of output that the seller is willing to supply at
desire and willingness to pay a price for a specific good or
a given point in time of other things held constant.
service.
OTHER FACTORS AFFECTING SUPPLY OF A
Supply is a fundamental economic concept that describes
the total amount of a specific good or service that is COMMODITY
available to consumers.
• PRICE OF PRODUCTION INPUTS
DEMAND CURVE
• Expectation
• Is a schedule of the willingness and capacity of a
consumer to buy a commodity at alternative prices • Taxes
at a given point in time other things held constant.
• Technology

PRINCIPLE OF DIMINISHING MARGINAL

PRODUCTIVITY

- This means that although the production is increasing,

the additional or marginal contribution of additional
labor to total production is declining.
ELASTICITY • = 0.0 Perfectly Inelastic

• It is a measure used in response to changes in the

determinants of demand and supply.

PRICE ELASTICITY OF DEMAND

• Buyers tend to reduce their purchases as the price

increases and tend to increase their purchases
when the price falls.

• ∞ Perfectly elastic

INTERPRETATION OF PRICE ELASTICITY

• < 1.0 inelastic

Seven Dimensions of Sustainable Development

• = 1.0 unitary

• > 1.0 elastic Under the economic development we could list more
available sources of credit, associative economic
arrangements, partnerships with socially-responsible agri-
businesses, etc.

Ecological factors of importance are: use of crops more

adapted to an unpredictable climate, selection of local
varieties, use of techniques of sustainable agriculture and
fishing

Political entry points are things like better road infrastructure

for access to the markets, agrarian reform, laws protecting
farm labor, promotion of fair trade criteria of production, etc.
Cultural factors include use of local technologies and
knowledge, partnerships with civil society organizations,
capacity building,…

Under social development goes a quick response to natural

disasters, addressing the social factors at the root of the high
birth rate among the rural poor.

Human development sees the importance of adequate

nutrition, and improving resource management skills.

An overall goal of spiritual development is the enhancement

of meaning of agriculture as a way of life.