Submitted by : Madeliene Ocampo, Kalvin Kier Arao, Luisito Lumbre, Mirriam Ocenar Submitted to : Prof. Thes Sagadraca Subject : Principles of Economics SChool : University of Makati

1. Chapter 4
DISTRIBUTION

2. Lesson 1
FACTOR PRICES AND INCOME
DISTRIBUTION

3. Distribution of the National Income
1. Personal Distribution
- is the distribution of the National Income
among the persons or households which produced
the aggregative product of society.

4. Lorenz Curve

5. 2. Functional Distribution
- distributes income according to one’s function
or role in society.

6. Functional Distribution of the Country’s
Output

7. Lesson 2
FACTOR PAYMENTS AND ITS
RELATED CONCEPTS

8. Rent (Upa)
Payment, usually monthly, for use of space
or property.

9. Wage (pasahod)
Price paid for human exertion or effort.
Or called payment for manual labor and
usually paid in money.

10. Classifications of Wages
1. Time wages
-It has the basis of length of the time during
which the laborer renders his services.

11. Classifications of Wages
2. Piece wages
-wages paid according to the amount of work
labor performs.
3. Fees
-wages paid to professionals.

12. Classifications of Wages
4. Commissions
- based on the percentage of the total sales of
products or goods by memebers of the labor force.

13. Classifications of Wages
5. Extra wages
-wages in addition to the regular salaries and
income of workers.
6. Wages-in-kind
-non-monetary wages paid to labor.

14. Two kinds of labor
1. Physical labor
(Skilled labor, semi-skilled labor, unskilled labor)
2.Mental labor
(Professional labor, labor of administration and
supervision, labor of invention and creation)

15. Theories of wages
1. Subsistence theory of wages
2. Minimum wage theory
3. Wage fund doctrine
4. Marginal productivity theory of labor and wages

16. Theories of wages
5. Demand and supply of labor theory
6. Bargaining theory
7. Business cycle theory

17. Labor theory of value
-wage paid to labor is equal to the amount of
work applied to produced a commodity or its cost.

18. Demand for labor
-the firm hires more labor when the demand for
its product goes up.

19. Labor productivity and labor mobility
- the expected productivity of the workers lies
behind the demand for labor.
-labor mobility is the ability of labor to move
from one place industry or sector of economy to
another

20. Supply of labor
-in determining the amount of the labor supplied
to an industry or firm the supply curves of all factors
tend to be upward-sloping in the short-run.

21. Interest
-a person usually receives income in the form of
money.

22. Interest rates vary among financial instruments
because of differences :
1. Risk
2. Maturity
3. Liquidity

23. Theories of interest
Agio or premium theory
-future goods are important
Abstinence theory
-income not consumed
Marginal productivity theory
-capital + interest

24. Theories of interest
Supply and demand theory
-supply, demand and price go together
Government policies and interest rates
-loan paid in long period of time with low interest.
PROFIT -entrepreneurs income

25. ENTREPRENEURIAL PROFITS
-Profits are rewards of the entrepreneur for his
labor.
• Functional return
• Residual return

26. TYPES OF PROFIT
A. GROSS VIS-AS- VIS NET OR PURE
-Remuneration vs. Contractual cost
B. NORMAL VIS-AVIS EXCESS
-Gain profit vs . Profit + excess profit

27. THE MEASURE OF PROFITS
-The amount of profit made.
GENERATION OF PROFITS
-Contineous profit.
RESULT OF MONOPOLY
-The goods are unique.

28. LABOR EXPLOITATION
-Give what is due to caesar.
PROFIT AND INNOVATION
-Innovators introduce the newest goods and
services.

29. RISK AND PROFIT
-Positive notion prosper.
ORGANIZATION OF PRODUCERS
-Unity is the best policy.

30. COLLECTIVE BARGAINING
-Working condition must be observed.
EFFECTS OF UNIONS
-Strong union and fair competition.
BUSINESS CARTELS
-Learn,study and create.

31. Lesson 3
LAND REFORM VIS-À-VIS
AGRARIAN REFORM

32. 1.The difference between land reform and agrarian
reform.
2.The difference between unemployment and
underemployment

33. 3.The types of unemployment
4. Philippine unemployment rate
5. The Philippines’ rank regarding world poverty

34. Land Reform
-The distribution of land from the landlords to
the tenant farmers in order to improve the plight of
these tenant farmers

35. Agrarian Reform
-Is not a distribution land but goes beyond the
question of land rights.
-Promote social justice

36. Unemployment and Poverty
Unemployment
- without jobs and actively looked for work
within four weeks
Underemployment
- employed in a job but not within his field of
specialization; receiving less payment for his work

37. Types of Unemployment
 Seasonal
 Frictional
 Structural
 Cyclical
 Real Wage

38. Unemployment rate
- the level of unemployment divided by the labor
force
Labor force
- the number of people employed and
unemployed but finding work

39.  7.1%-rate of unemployment in the Philippines in
July of 2011
(www.dole.gov.ph)
 No.70 among 141 countries all over the world on a
Population Below poverty line research