In Partial fulfillment of the Requirements in Major 10: Production of Social Studies in Instructional Materials

Bachelor of Secondary Education

A.Y. 2010 - 2011

What is your interpretation regarding

the pictures??..

Principles of Economics

Is a social science that deals withthe study of man’s activities andefforts to use the limitedresources for the satisfaction ofthe unlimited needs of man.

The term economics came from theGreek word oikonomos whichmeans “household management”.

Economics was known as political economyand was at the center of study of philosophersduring the 17th century. There were no ideas andphilosophies that explains economics back then.All studies were focused on the political scenarioof the time. Later on, the study of economics wasgiven attention. Different theories, researches,ideas, and points of view hat concerned theactivities of man in the society were developed.

The concept of economics as a focus ofstudy began with the Greeks and Xenophon’sinstructional treatise on efficient managementand leadership entitled Oeconomicus. Hedescribed the Greek economy as a premarketwhere products were neither uniform nor tradedon organized exchange or analyzed for theirown sake. They emphasized human contractthrough the practical nature of leadership andpolicy.

Aristotle, in spite of beingPlato’s pupil, did not agree with histeacher’s concept of an ideal state. Hedefended private property for allclasses and not just for the establishedleaders. In his Topics and Rhetoric,Aristotle viewed exchange as a way osatisfy individual and collective wantsand not as a means for the state toaccumulate wealth.

In contrast to these, Plato in hisRepublic presented a blueprint for aneconomy where cities are founded onkey principles of specialization anddivision of labor that creates mutualinterdependence and further leads toreciprocal exchange.

This process of accumulation of wealth became thepreoccupation of the mercantilists. They emphasized the utilizationof all available lands for agriculture, mining, or manufacturing. Theystressed that all raw materials should be used for domesticproduction because finished products have higher price than rawmaterials. Their ultimate goal is to accumulate silver and gold byselling their finished products and keeping domestic money in localcirculation.

The failure of mercantilism in keeping agricultural outputfrom declining and taxes from increasing paved the way for thephysiocrats.

Francois Quesnay and his group who werecalled Physiocrats believed in the importance ofnature in the economic development of acountry. They strongly agreed that man shoulduse natural resources wisely and properly oattain the maximum advantages from it.

Aside from this principle, Quesnay becamepopular in his Tableau Economique, whichillustrated the flow of the factors of production,goods, and services in the different sectors ofthe economy. According to him, inorder to haveequilibrium in the economy, it is necessary touse the natural resources wisely to attaindevelopment.

These differences in principlesbetween the physiocrats and themercantilists paved the way for therecognition of another group calledClassicists. They were theeconomists from the Classical Schoolled by Adam Smith who is known asthe “father of Modern Economics”.Adam Smith explained the LaissezFaire doctrine or the “let alonepolicy”.

David Ricardo was known for hisbrilliant ideas about the effects of naturalsources like land in the development ofeconomy. According to his principle the Lawof Diminishing Marginal Returns, increasingnumber of people will drive man to cultivateeven the idle lands to support theirnecessities in life.

Thomas Robert Malthus, on the otherhand, discussed the effects of the rapidincrease of population. His theory is knownas the Malthusian Theory. It was written inhis book, An Essay on the Principles ofPopulation. It stated that if populationincreases rapidly than the supply food, it cancause famine and will affect the economicactivities of man.

The Law of Supply and Demandis the underlying principle of thegroup where John Maynard Keynesbelong. According to Keynes, thegovernment plays a significant role inmaintaining equilibrium in theeconomy through public spending andkeeping the balance among demand,supply, and the market prices. Hewrote the book General Theory ofEmployment, Interest, and money.

Karl Marx, the“Father ofCommunism,” sharedhis principles andideals regarding hecause of poverty in asociety. Marx believedthat poverty of theproletariat or workingclass is caused byabusive practices ofthe rich capitalists thatsafeguard their ownselfish interests andtheir accumulation ofwealth.

Social Science-The study is about society - Society is a group of

people that has common objectives, race, goals, and interest.Research and evaluation are needed in order to achieve thetruth when stating certain problems of society. Man’s activities - Individuals strive hard to accomplishtheir responsibilities, duties and functions in society and tosatisfy their needs. Limited resources - scarcity is main cause ofconditions in an economy. This is the reason why mancontinues his struggle for survival. Unlimited activities - man has no satisfactions. Hewants to have so many things in his life. His desire for varietyof good makes living complicated and more challenging.

Any Question??....

Answer the following:

1. He is considered as the leader of the physiocrats.

2. He is known as the Father of Modern Economics.

3. He is an economist who believes in the importance of land.

4. He wrote Topics and Rhetoric.

5. He is known as the Father of Communism.

Adam Smith

David RicardoAristotle

Karl Marx

Got the Perfect Score?

1. Why is man and society the center of study in economics?

2. If you were an economist, how will you define economics?

3. Do you agree hat man has no satisfaction ? Why?

Economics and other

Sciences

Economics as a social science:

Economics – is a social science becausethe center of its study is the people and society.As a science, the scientific method is used inanalyzing certain problems related to andaffecting the economy.

Economics and other sciences –many disciplines of study are relatedto economics. It shows the importanceof the discipline to our lives andeconomy.

History and economics – historyrecords how the tools of early mangave to present way of life. Oneexample is the history of our economicprinciples and policies during thedifferent periods of time. This resultedin the present condition of oureconomy.

Ethics and economics –Themorality of man is one of the mostimportant elements in the progress ofa country.

Political Science- The study of governmentstructure, functions, responsibilities, and law set arevital because all of these and influence our lives andthe economy as a whole.

Chemistry and Economics- the types ofchemicals used in agriculture as fertilizers andpesticides in producing the goods are necessaryconsideration for setting and market price of theproduct.

Physics and Economics- Technology, inventionand innovation are the outcome of scientific studies.

Biology and Economics- it is the study ofprocesses and characteristics of plants and animals.

Mathematics and Economics- The study ofeconomics is facilitated by the use of numbers,statistics, mathematical equation, formula, graph,which are learned in mathematics.

ECONOMICS

CHEMISTRY

BIOLOGY

PHYSICS

MATHEMATICS STATISTICS

ETHICS

POLITICS

HISTORY

Economics is always part of our life and whatever we

make

A. Identification: write the answer on the blank.

1.The study of government structure and policies.

2.Study of plants and animals.

3.The application of science in economics.

4.The recorded struggle of man from the past to the present

5.It concerns the use of graph and statistics.

Political Science

Biology

Scientific Method

History

Mathematics

Significance and Scope

of StudyingEconomics

In economics, you will understand why people are so busy in their struggle.

To develop wise decision-making. Develop Patriotism. Develop Critical Thinking skills. Develop Economic skills.

In general, the study of economics will enhance the mind and ides of the youth for their daily living and survival in the face of different situations in our society.

The scope of economics consists of 2 major branches

Refers to the study of small units of the economy . It focuses on individual buyers and

sellers.

Microeconomics

While this branch tackles the aggregateaccounts of the economy. The Gross NationalProduct (GNP), (GDP), National Income (NI), andInflation are discussed in

Macroeconomics

Let us analyze the following scenario:

The basic problems of local farmers are landless, unfair globalcompetition, and lack of government subsidies. There is big gap between actual wages and cost of living. The government provides economic and socialized housing units to low –income groups. Commercialization, privatization, and lack of government support makeeducation more inaccessible to the poor. The intensifying civil war in the countryside and riding incidence ofcrimes like kidnapping, drug trade, and robbery are indicative of aworsening economic condition. Rice security program depends on importation. Foreign investment grew by 26%. The increasing number of newly hired migrant workers shows worseningdomestic joblessness. Employment in agriculture improved a little.

1. What is your reaction after reading the various situations?

2. Can we consider all of these as economic issues? Why?

3. How do the economic issues differ?

4. Why is it important to tackle and analyze the economic issues and problems of the country.

Stages in Man’s Livelihood

The desire of man to improve his life made him seek ways and tools that can help him on his economic activities.

From the Nature

Significant Role of Agriculture

Utilization of the Gift of the Nature

The use of SimpleTools

Machineries

An Overview of Philippine Economic

History

The Datu was the leader in the earliest communities in thePhilippines called barangay. Each barangay had their own cultureand economic activities.

Exchange of goods was done by our forefathers’ skills andabilities. They showed a high level of technology when hey wereable to build the rice terraces. They were able to have abundantagricultural products, which were used in the exchange of goods.

Early Filipinos and other settlers around the world used stonesas tools. Tools were improved with the discovery of metals.

Our country is also rich withaquatic resources like pearls, corals,and different kind of fishes.

Our forefathers had their ownidentity and source of livelihood beforethe coming of the Spaniards.

We have learned that we have our own culture and economic system,which was altered by the Spaniards.

Encomienda is a piece of land given to the loyal servants of the King ofSpain. The one who received it is called the encomiendero. Theencomiendero, who is usually a Spanish soldier, managed the encomienda.He is the one responsible in maintaining peace and order, teaching spiritualwok, and collecting taxes in his land. That kind of power and authority weregiven to him king of Spain but the encomiendero abused this powers.Maltreatment and abuses were widespread. The King of Spain issued a royaldecree to stop all the abuses of the encomiendero and required alllandowners to register their lands in the Philippines. The decree widespreadanomaly in land registration. Hectares of lands owned by the Filipinos wereignorant and not aware of the provisions of the decree and real intentions ofthe Spaniards.

Governor General Jose Basco y Vargas established the goal ofdeveloping the agricultural sector of the country. The production of silk wasintroduced through the planting of mulberry trees. Governor Basco repairedthe bridges and roads to speed up transportation of goods to the differentparts of the country.

Our natural resources were devastateduring the American and Spanish wars.Americans came here to colonize us. Theyimprove our way of living. Land ownershipemphasized through the implementation of theHomestead Act and the Torrens Systems.Americans tried to bring back the lost lands ofthe Filipinos. They had the intentions to give landto the poor Filipinos, especially the farmers. Butunfortunately they failed because most of theAmericans owned a great number of lands likewhat happened during the Spanish period.

Agricultural Development- theAmerican introduced major crops to the farmers.The Bureau of Agriculture was established in1902.

Progress industries- the first step ofthe Americans was introduce the newmachineries and technology in industries.

Free trade- it is concerned with theexchange of goods and services without tradebarriers like tariff and quota. Tariff is the is a taxlevied on imported goods while quota is thelimitation in the quantity of exported andimported goods.

The Payne-Aldrich Act of 1909- It was the first trade which opened our ports to the United States in 1909. all products of the United States were allowed to Philippine products had Quotas. Only 300,000 tons of sugar and 150,000 pieces of tobacco can enter the American market. Americans limited their imports to protect their own industries.

The Under-wood Simmons Act of 1913 in order to achieved to real essence of free trade between the

Philippines and the U.S. tariffs and quotas were abolished but still the favored the Americans because Philippine products with 20% foreign raw materials are not allowed to enter the Americans market.

The Tydings-Mcduffie Law of 1934 this law established the commonwealth government in the preparation for independence. It brought back our freedom. The law underscores free trade during the government period from 1935 to 1946.

When a country is in a state of war, many of its resources and the raw materials needed for productive purposes are diverted to war – related activities. given the limited resources for productive use, the production of consumer goods declined substantially. Since Japan was at war with the United States, all our trading relations with the U.S. had to stop and consumer goods imported to the U.S. eventually vanished. These factors together with the lack of sufficient local industries contributed to a shortage in the supply of many commodities. During he Japanese Occupation, shortages were reported in almost all commodities including rice, coconut oil, vegetable lard and soap, sugar, cattle, and hogs, and clothing.

Commerce became widespread .

The volume and value of Philippine products increased.

Trade became easy with the improvement of transportation and communication facilities.

Colonial mentality was developed among Filipinos.

Economic Policies of Different Philippine

Presidents

The administration of Roxas wasa period of rehabilitation. There was aneed for economic recovery in ourcountry after the war because therewere a lot of damages in our buildings,communication and transportationfacilities, industrial plants, and the like.Our government was facing a lot ofproblems due to lack of funds. As aconsequence, President Roxas wasforced to accept the offer of theAmericans regarding the 2 lawsenacted, namely; the Bell Trade Act andWar Damage Act.

President Quirino continuedthe economic policies, whichPresident Roxas started. Hisadministration emphasizedimport substitution policy. Heunderscored the control onimportation. His goal was to solvetrade deficit to achieve balance oftrade. There is trade deficit whenthe expenses from import exceedthe export income.

President Ramon Magsaysaystarted to solve the problems on theland redistribution. Through the LandReform Act of 1955, he gave emphasison the welfare of the poor farmers whodesired to own agricultural land. Heestablished the National Resettlementand Rehabilitation Act (NARRA) to giveland to some farmers. He alsoestablished the FACOMA (Farmers’Cooperative and Marketing Association)to organize the farmers.

The administration of Carlos P. Garcia is considered as the most decisive administration because of his Filipino First Policy. His objective was free our economy from foreign intervention and control. The control on import, financial loans, and foreign currencies and tightened.

He gave priority to Filipino industries in thedistribution of resources. He supported the RetailNationalization Trade Act.

President Diosdado Macapagallifted the control on foreign currenciesand allowed the importation of goods,which resulted to devaluation. Hiseconomic policy was decontrol. It iscalled decontrol because he allows theforeign products to enter freely in ourcountry. He signed the Agricultural LandReform Code. It abolished the kasamasystem in tilling the land. It paved theway to the implementation of landreform. He also established the LandBank of the Philippines.

President Ferdinand Marcos served thegovernment for 20 years, the longest term ofoffice for a Philippine president. He continuedthe Decontrol Policy of Diosdado Macapagal. Atfirst, the economy was doing well. NationalIncome increased rapidly; production was high;and land reform was introduced underPresidential Decree Nos.2 and 27. he declaredMartial Law in the country. His extended term ofoffice had bad effects in our economy. Manycorporation were under the administration ofhis family and friends. Cronyism and nepotismwere rampant. Foreign debt became higher andlaws became tougher. There was a negativefigure in national income; public funds werecorrupted and missing; and eventuallyeconomic crisis was prevalent. He was exiled toHawaii during the height of EDSA I.

President Corazon Aquino was the firstwoman president of our country. She was put intopower through a bloodless revolution known asEDSA I. democracy in the country was establishedonce again. She started to organize and reform thepolitics, economy, and the economic status of ourpeople.

Corporations under the cronies of theMacros administration were sequestered.Government corporations, which are considered asnonperforming assets, were sold to private sectors.Privatization was the centerpiece of her reform. Sheimplemented the Comprehensive Agrarian ReformProgram (CARP) to emphasize he economiccondition of he farmers through Republic Act 6657.she initiated the moral recovery among Filipinos.Her administration approved the Value Added Tax(VAT) as a tax reform measure.

Industrialization was the aspiration of President Ramos’ administration. He implemented the medium Term Philippine Development Plan which was called Philippines 2000. it has objectives of economic improvement and upliftment through global competitiveness and people empowerment.

He continued to attract foreign investors to enter the country and put their capital in our industries. Implemented various tax reforms to have funds to finance the different economic and social reforms programs of the government through which we were no longer called, “ The Sick Man of Asia”.

His administration became controversial with the implementation of he Expanded Value Added Tax (E – VAT) to reform tax collection and when our country approved and joined the General Agreement on Tariffs and Trade (GATT).

The 13th president of the Philippines, JosephEstrada is the most celebrated Philippine president.A former movie actor, he was involved in differentcontroversies particularly when he was the top manof the country, but the most controversial was theimpeachment case. The impeachment case led tohis imprisonment.

During his term as President, his economicagenda zeroed in on the alleviation of poverty that’swhy his battle cry was ERAP para sa Mahirap.Because of this, he gained the heart and support ofthe Filipino masses through his charisma. He wasnot able to fulfill his plans and promises o the poorpeople because of he sudden change leadership.

The second woman president of the country,President Gloria Macapagal Arroyo was put I powerthrough the EDSA People Power II after thecontroversial impeachment trial of President JosephEstrada.

Her administration focused all its efforts toimplement the previous administration programs,which were not attained. She emphasized theimportance of transparency in the government. Tocheck graft and corruption, all governmenttransactions must be transparent. Through heradministration is facing many problems like peaceand order, high prices, insurgency, and an attemptto destabilize the government, she is trying toimprove projects and programs that have alreadybeen implemented by the past administrationparticularly projects related to the upliftment of theeconomic status of the poor. She launched theprogram Pagkain sa Bawat Mesa. She has also triedto stabilize the peso – dollar exchange rate.

P - Noy

Our Country’s Resources

Refer to anything are used to producegoods and services that satisfy the needs ofman.

Natural resources composed of land,water, forest, energy and minerals; humanresources; and the physical resources.

We are rich in natural resources. Resourcesare gifts from nature or sometimes called a giftof God. All our natural resources are essentialfor the development of our economy and toimprove the way of life of the people.

Our total land area is 300,000 squarekilometers (Km2) comprising our forests,plains, mountain ranges, hills, mineral land,and plateaus.

Land resources are God – given so it cannot beincreased. Land includes all non – replaceableresources above and below it.

More than 50% of our land isclassified as forestland. Our country ispopular around he world because of ourabundant resources.

Different kinds of trees can befound in our forests, like the molave,dipterocarp, narra, and yakal which arethe needed in our economy.

Forests give a lot of advantageto the people and the economy. Itprovides employment through logging.It generates income for our economythrough the export market. It provideswatersheds and ecological balance forour endangered species of wildlife.

Nowadays, we areexperiencing the effects ofrapid depletion of forests.The flash floods in thedifferent places of ourcountry are due to forestdenudation. It affects thelives of people and theirsources of living. Theextinction of our endangeredspecies of wildlife, thelowering of the water level inour streams and rivers, andthe intensity of the effects ofthe depletion of our forests.

The Country’s Resources

Our water resources areestimated at 1,661,300 squarekilometers, which is larger than ourland resources.

Water resources are renewable.It is the source of different aquaticresources that are needed in our dailylives.

The Philippines is known todayas the world’s largest producer ofTilapia. In 1993, our country producedmore than 96,000 metric tons of tilapiasurpassing of China. We are expectingan increase in our tilapia productionfrom 100,000 metric tons (mt) to200,000 mt in the years to come.

Pollution. Because of lack of disciplineamong us, bodies of water becomepolluted due to improper disposal of bothpersonal and industrial wastes. As aresult, it causes the contamination of thewater and the presence of bacteria like socalled dinoflagellates that causes red tide.

Some of the laws that protect ourwater resources are:

Republic Act3931. this law prohibitsand penalizes persons who throw theirgarbage that can cause pollution of waterresource.

Lack of knowledge.Majority of the fishermanwere not able to finishnormal schooling. They werenot able to acquire skills andknowledge. They need todevelop their abilities as thiswill help them in using themodern and state of the artmachineries and facilities inthe fishing industry.

Republic Act 7160. this is the LocalCode of the Philippines. It implements thelaws on sanitation and cleanliness in theenvironment and proper garbage disposal.

Executive order 54. this law establishedthe Pasig River Rehabilitation Commission. Itsmain objective is to clean, rehabilitate, andsave the Pasig River as one of the historicalrivers in our country. The government has agreat role and responsibility in protecting ourwater resources. The government muststrictly implement the laws and imposepenalties to those who violate the law. It isabout time that the government shows itspolitical will in protection the waterresources.

The land that covers these resources belongto public domain. Mountains, agricultural land,forests, and national parks are owned by the state.

Mineral resources is one of the mostimportant resources of our country. It is notrenewable and can be extinct in the near future.There are three kinds of Minerals: metallic,nonmetallic, and gas.

Mineral resources is important in oureconomy whether metallic or non metallic. Theproduction of gold, silver, and copperdecreases every year. It is very alarmingbecause if the low production continues, we willexperience limited supply of metallic mineralwhich may affect are economy.

Gas, fuel and petroleum are the mostimportant kinds of gas. This third classificationof mineral is a source of energy in our country.

Human Resources and Population

Human resources consistof abilities, knowledge, skills,and manpower, which are usedin the production of hoods andservices. These factors areessential in the productivity ofthe labor force. Without when wetalk of human resources, wealways relate this to population.Population refers to the totalnumber of living in a certainarea. The population of onecountry represents its humanresources.

Consist of knowledge, abilities, skills, and human efforts.

Demography is the study of population.

Population is the number of people in a certain area.

Effects of large populationIncrease in human resourcesThreat to limited resources

Famine Poverty Lack of shelter Unemployment Environmental degradation

Theories on Population

Thomas Robert Malthus is anEnglish economist and priest whowrote the book essay on the principleof population. According to him,population grows faster than thesupply of food. Population increases ingeometric ratio while the food supplyin arithmetic form. He mentioned thatif population growth were uncheckedand uncontrolled, people wouldexperience famine and death.

Fertility theory is related to consumerbehavior, having more children means increase infamily expenses and more responsibilities. At thispoint, parents think of the opportunity cost ofhaving more children. Opportunity cost is thebenefit given up for other things like in the case ofa mother, if she decides to get pregnant and haveanother child, she has to resign from work to takecare of her children at home. So the opportunitycost is the salary that she was previously receivingas a worker. In having more children, there arefactors that the couples must consider like theincrease in family expenses.

1. STAMHO TBORRE UHTSLAMA clergyman who explained one of the population theories

2. OZRE TLANIPOUPO RTGHWOKnown as the fourth stage or demographic transition theory

3. NEUCDAIOTFactor that will help the married couple understand the effects of

having more children

4. HBITRRTEANumber of born children

5. YERFIITLTAbility or the capacity to bear a child

Labor Force

It includes persons aged 15 years and above employed or unemployed with enough skills, abilities, and maturity to be able to participate actively in production activities.

Labor Force Participation Rate

100xPopulationWorkingAge

LaborForceLFPR

There are two types of labor: Mental and Physical labor.

Laborers are classified based on the skills, talent, and abilities they use in performing their job.

A White collar job uses and requires more thinking abilities and skills in the performance of a job while;

Blue collar job uses more physical effort and skills.

Productivity of

Labor Force

Education for every Worker

Health benefits for Workers

Capital and New technology for Every Worker

Solutions to Underemployment and Unemployment

Attracting foreign Investors

Inward – looking Policy

Increase in Government Expenditures for Infrastructure Projects

Migration of Workers to Foreign Countries

To have effective and productive workers, the government must provide :

Sufficient jobs

Job security

Healthy working environment

Just compensation

Proper training

Physical

Resources

- Are the things that are made by man using hisskills and abilities. These resources can be usefulin man’s daily activities.

- refer to material things created by man that areused for further production.

- Physical Resources act as mediation between theraw materials and the labor force to complete theproduction process in the different industries.

Needs and Wants

It is natural for man to have needs in order o survive. The primary needs of man survival are foods, clothing, and shelter.

These factors play a vital role in changing our needs and wants.

Age

Education

Tastes and Preferences

Income

Profession

Abraham Maslow, asociologist, underscores thateach individual has differentneeds. Human needs havedifferent levels regardless of theindividual’s abilities to satisfythese needs.

Self

Actualization

Appreciation

by others

Love

Security needs

Physiological needs

The Needs of Developed Countries

Countries differ from one another in manyaspects. Even the needs and wants ofdeveloped and developing countries aredifferent. The level of development of a countryis measured by the kind of needs and wants ofits people. The needs of developed countrieslike Japan, U.S., Germany, England, and othercountries are very much different from theneeds of developing countries like Philippines,Vietnam, and Thailand.

The needs of man depend on social andeconomic progress of the economy. Materialthings must be provided and freedomsecured to give them a level of economicprosperity. Having met those needs,progressive society will be at hand.

Consider this synthesizer…

Abundant

Material

Progressive

Society

Progressive

Society

Progressive

Society

Scarcity

- Is a natural phenomenon whichsets a limit in the production of goodsand services needed by man. All of usdemand goods, which are definiteamounts and for which we have to payin terms of money. Free goods are thosegoods we consume freely and for whichno amount is paid. Economic goods aregoods we have to pay. Each member ofsociety has to compete with each otherin using the scarce resources to producea limited supply of economic goods.

Shortage

- it should be mentioned that Scarcity is anatural condition prevailing in every countryand it is the reason why we need to maximizethe use of our resources. While scarcity is aseemingly endless problem, shortage is atemporary condition in the economy. The lackof supply in goods is caused by themanipulation of some individuals resulting toan artificial shortage.

of economic problems. There are two conflicting situations:

The unlimited needs of man; and

The limited capacity of productive resources.

1. What to produce?

2. How to produce?

3. How much to produce?

4. For whom are the goods to be produced?

5. How distribute the goods?

Basis of Consumption

Production Consumption

- Deals with buying and using goodsand services to satisfy our human needs.Consumption is a major concern ofeconomics in which the different activitiesof man depend.

- Consumption cannot be separatedfrom production, which depends entirely onconsumption.

1. Direct – direct consumption happens when an individual satisfies himself upon buying and using a certain product.

2. Productive – buying goods to be used in producing other goods describes this type of consumption.

3. Harmful – today, many buy and use prohibited drugs, alcoholic drinks, and cigarettes.

4. Wasteful – buying things that do not give satisfaction to a person is wasteful consumption.

1. Income – is the money received in exchange of produced goods or services.

2. Occasion – the celebration of any occasion makes people buy and give gifts to their loved ones.

3. Advertisements – is a way of motivating and convincing consumes to patronize certain products.

4. Prices – limits consumption. If the price is high, people have second thoughts on buying the commodity especially if it is not a basic good.

5. Values – our own attitudes, behavior, and values affect our consumption. If we value thriftiness, we plan out the things we need to buy and as a result we do not become impulsive buyers.

6. Seasons – affect our consumption since on the weather.

7. Imitations and Bandwagon Effect – we consume more of the same product. Sometimes it is the main reason why people buy and use the same products that they see in others. We want to consume the things that our idols, friends, and neighbors consume.

1. Law of Variety – goods are services are produced in different ways and styles.

2. Law of Harmony – it is normal for any individual who decides to buy products that complement each other because in this way he attains greater satisfaction.

3. Law of Imitation – this law explains that people attain higher satisfaction when they are able to buy the imitate those whom they admire.

4. Law of Economic Order – individuals have a natural tendency to satisfy their needs to live.

5. Law of Diminishing Marginal Utility – utility refers to the satisfaction achieved in consuming goods and services. Marginal utility and total utility are two classifications of utility. The first one is about the added satisfaction you get while the latter is the entirely of satisfaction you get in buying and using products.

Marginal utility – is the principle that limits consumption and makes it predictable.

The Consumption Pattern of Filipinos

Poverty Standard – people who belong to thisclassification are considered the poorest of thepoor because they don’t have the capacity tomeet their basic needs.

Bare – living Standard – for people who belong tothis classification, to satisfy all the basic needs isdifficult. Having the usual three meals a day issometimes not certain.

Decency Standard – people have the chance tochoose the kind of products they want to use.Income is much higher and better which givesthem the assurance of providing all the basicneeds and wants of the family with an extra tospare.

Comfort Standard – income is sufficientenough to enjoy the comforts in life. There isworry – free living. Satisfying all the needsand wants is not a problem. People have theopportunity to save their income.

Luxury Standard – a small percentage of theFilipinos live under this Standard. People buyand use high – quality products.

Indebtedness

Colonial Mentality

Regionalism

Pakikisama (Peer Influence and Pressure)

The Modern Consumer

“All of us are consumers,

whether young or adults.”

1. Analytical

2. Looking for an alternative or a substitute

3. Alert

4. Reasonable

5. Budget conscious

1. Consumer should be united so that they willbe strong enough to fight for their rights.Achieving the goals, purpose, andintentions of any consumer organizationdepends on the cooperation, and unity ofthe members.

2. Protect the environment.

3. Always be alert, watchful, and mindful ofthe wrongdoings and malpractices of thesellers, businessmen, and the government.

4. Support and patronize local products and bepart in developing the local industries which isnecessary for our economic development.

5. Take action and be vigilant. Consumers mustmonitor the proper implementation of prices ofbasic commodities and the other laws against theabusive businessmen and sellers. By doing this,consumers show courage in fighting theirregularities that affect the welfare and rights ofthe consumers.

1. Right to choose

2. Right to proper information

3. Right to have basic needs

4. Right to security

5. Right to organize

6. Right to clean and orderly environment

Republic act no. 71 or the Price Tag Law – the retailers or the sellers of small quantity are required to put a price tag in every commodity that are selling so that price monitoring will be done easily.

Republic act no. 3740 or Law on Advertisement – advertisement of fake products and services is strictly prohibited under this law.

Article 2187, Civil Code of the Philippines (Law on Extra Contractual Obligations)

Republic act no. 3452 or establishing the National Grains Authority – established the National Grains Authority, a government agency that has the authority to buy the rice harvest of the farmers and sell it to Filipino consumers on a lower price.

Article 1546, Civil Code of the Philippines (Law on Sales) - The damage and defects of a product should not be hidden defects in the products.

Article 188, revised Penal Code (Laws on Trademark) – law that penalizes those who will use the brand, container, wrapper and trademarks of other registered products.

Department of Trade and Industry

Bureau of Food and Drugs

Local municipalities

Mass media

Identify the rights and characteristics of the consumers by giving the missing letters.

1._ L _ R T2.V _ G I _ A _ T3._ H O _ S _4.S_ C_R _ T _5._ U _ GE _ C_ N _ _ I _ _ S

Systems of Allocating Resources

Refers to the mechanismdeals with the distribution ofnatural resources, humanresources, and physical resourcesto diverse use in order to answerthe problem of scarcity.

Market is considered as themost important mechanism ofallocation because it is where wecan find the variety of productsthat show how the resources areallocated

- covers the structure of governance composed of institutions and mechanisms that deal with different economic activities that will answer the basic questions on the needs of an economy.

1. Early Communal Villages – the early people lived tribes where they practiced communal living. Each individual worked for the common good. There is unity, cooperation, and concern among members of the community.

2. Feudalism – was an economic and political system that dealt with extensive land ownership. The basis of man’s power depends on the ownership of extensive land. It is the relationship between the landlord known as feudal lord and vassals. Vassals provided service, managing all the activities inside the manor, and protecting the feudal lord at all times. As payment for the services of the vassals, a piece of land called fief, is given to them

3. Mercantilism – during the 16th

and 18th century, mercantilismprevailed in Europe. Gold andsilver were very essential.Everybody wanted to acquiremore gold and silver to becomepowerful. During that time, acountry hat has abundant supplyof gold and silver becamepowerful because these metalswere considered as the mostprecious and were used asyardsticks for power andsupremacy.

Capitalism and Communism

Is an economic system in which to ownership of land, capital, and labor as factors of production is in the hands of the private sector or individual businesses.

This system is also called free enterprise or the free market system.

Is an economic system in which the state controlled the owned all the industries and resources of the country.

Today, no country has reached full communism because not one has achieved a classless society, which is a step towards socialism

Is described as a combination of capitalismand communism. Main industries arecontrolled by the state and individuals areallowed to own the small industries in whichthe state can interfere.

Resources and industries are controlled andowned by he state under a dictator

People are for the state, not the state for thepeople. It is the battle cry in a fascist society.People are obliged to follow the rules, laws,and regulations set by the state. Individualshave no right to complain and defy the rulesof the state.

1. All countries are engaged in trading. 2. Communism is for the poor. 3. There is economic instability in capitalism. 4. Economic planning is necessary for development. 5. the Philippines has experienced dictatorship. 6. it is difficult to distribute the resources and income

equitability among the members of the population. 7. Socialism is a better economic system compared to

capitalism. 8. Capitalistic countries are more developed than any

other country. 9. a perfect economic system is only an imagination. 10. Economic system is a mechanism to answer the

different economic problems.