1. ECONOMY
Economy is the institutionalized system for production,
distribution, and consumption of goods and services.
Primary sector is the part of the economy that involves the
gathering or extracting of undeveloped natural resources.
Ex: fishing, mining, forestry and agriculture.
Secondary sector is the part of the economy that involves
turning the raw materials produced by the primary sector into
manufactured goods.
Ex: houses, furniture, automobiles, canned goods, etc.
Tertiary sector is the part of the economy that involves
providing services.
Ex: medicine, broadcasting, teaching, laundering, etc.
The Agricultural Revolution. Agriculture emerged as human
inventiveness brought together plows and animal power that
generate surplus. Because producing food no longer consumes the
time and energy of all, individuals assume specialized economic
roles in permanent settlements, producing crafts, designing
tools, and constructing dwellings. Trading networks increasingly
link towns, exchanging food, animal, and other goods.
Cottage Industry is an activity where work at home produce goods
and sold in outdoor markets.
The Industrial Revolution. The phase has great sudden changes in
the society brought by the application of the mechanical power
to production.
Industrialization introduced five revolutionary changes to the
economics of Western societies.
1. New Form of energy
2. The spread of factories
3. Manufacturing and mass production

2. 4. Specialization
5. Wage labor
Postindustrial Economy in which economy activity centers on
service work and high technology. It is the age of technology
and communication.
TYPES OF ECONOMIC SYSTEMS
Capitalism represents an economic system in which natural
resources and the means of producing goods and services are
privately owned.
Distinctive features:
1. Private ownership of property
2. Pursuit of personal profit
3. Free competition and consumer sovereignty= laissez faire
SOCIALISM
The key elements:
1. Collective ownership of property
Karl Marx asserted that private ownership of productive
property creates social classes and invariably generates an
economic elite.
2. Pursuit of collective goals. Socialism proposes that
production should be designed to serve social needs, and
whether it is profitable or nor is of secondary importance.
3. Government control of the economy. Instead of laissez faire
approach, socialist societies place the economy under
government control. Thus, socialism creates a centrally-
controlled economy like the Gosplan in Russia.
MIXED OR DEMOCRATIC SOCIALIST ECONOMY is an economy which
there is strong elements of both capitalism and socialism.
Corporation is legally recognized organization whose
existence, powers, and liabilities are separate and
distinct from those of its owner or employees.