Chapter4: Distribution (group 3)

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Submitted by : Madeliene Ocampo, Kalvin Kier Arao, Luisito Lumbre, Mirriam Ocenar

Submitted to : Prof. Thes Sagadraca

Subject : Principles of Economics

SChool : University of Makati

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Chapter4: Distribution (group 3)

  1. 1. Chapter 4DISTRIBUTION
  2. 2. Lesson 1FACTOR PRICES AND INCOME DISTRIBUTION
  3. 3. Distribution of the National Income1. Personal Distribution - is the distribution of the National Income among the persons or households which produced the aggregative product of society.
  4. 4. Lorenz Curve
  5. 5. 2. Functional Distribution - distributes income according to one’s function or role in society.
  6. 6. Functional Distribution of the Country’s Output
  7. 7. Lesson 2FACTOR PAYMENTS AND ITS RELATED CONCEPTS
  8. 8. Rent (Upa)Payment, usually monthly, for use of spaceor property.
  9. 9. Wage (pasahod) Price paid for human exertion or effort.Or called payment for manual labor andusually paid in money.
  10. 10. Classifications of Wages1. Time wages -It has the basis of length of the time duringwhich the laborer renders his services.
  11. 11. Classifications of Wages2. Piece wages -wages paid according to the amount of worklabor performs.3. Fees -wages paid to professionals.
  12. 12. Classifications of Wages4. Commissions - based on the percentage of the total sales ofproducts or goods by memebers of the labor force.
  13. 13. Classifications of Wages5. Extra wages -wages in addition to the regular salaries and income of workers.6. Wages-in-kind -non-monetary wages paid to labor.
  14. 14. Two kinds of labor1. 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. 15. Theories of wages1. Subsistence theory of wages2. Minimum wage theory3. Wage fund doctrine4. Marginal productivity theory of labor and wages
  16. 16. Theories of wages5. Demand and supply of labor theory6. Bargaining theory7. Business cycle theory
  17. 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. 18. Demand for labor -the firm hires more labor when the demand for its product goes up.
  19. 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. 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. 21. Interest -a person usually receives income in the form of money.
  22. 22. Interest rates vary among financial instruments because of differences :1. Risk2. Maturity3. Liquidity
  23. 23. Theories of interestAgio or premium theory -future goods are importantAbstinence theory -income not consumedMarginal productivity theory -capital + interest
  24. 24. Theories of interestSupply and demand theory -supply, demand and price go togetherGovernment policies and interest rates -loan paid in long period of time with low interest.PROFIT -entrepreneurs income
  25. 25. ENTREPRENEURIAL PROFITS -Profits are rewards of the entrepreneur for his labor.• Functional return• Residual return
  26. 26. TYPES OF PROFITA. GROSS VIS-AS- VIS NET OR PURE -Remuneration vs. Contractual costB. NORMAL VIS-AVIS EXCESS -Gain profit vs . Profit + excess profit
  27. 27. THE MEASURE OF PROFITS -The amount of profit made.GENERATION OF PROFITS -Contineous profit.RESULT OF MONOPOLY -The goods are unique.
  28. 28. LABOR EXPLOITATION -Give what is due to caesar.PROFIT AND INNOVATION -Innovators introduce the newest goods and services.
  29. 29. RISK AND PROFIT -Positive notion prosper.ORGANIZATION OF PRODUCERS -Unity is the best policy.
  30. 30. COLLECTIVE BARGAINING -Working condition must be observed.EFFECTS OF UNIONS -Strong union and fair competition.BUSINESS CARTELS -Learn,study and create.
  31. 31. Lesson 3LAND REFORM VIS-À-VIS AGRARIAN REFORM
  32. 32. 1.The difference between land reform and agrarian reform.2.The difference between unemployment and underemployment
  33. 33. 3.The types of unemployment4. Philippine unemployment rate5. The Philippines’ rank regarding world poverty
  34. 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. 35. Agrarian Reform -Is not a distribution land but goes beyond the question of land rights. -Promote social justice
  36. 36. Unemployment and PovertyUnemployment - without jobs and actively looked for work within four weeksUnderemployment - employed in a job but not within his field of specialization; receiving less payment for his work
  37. 37. Types of Unemployment Seasonal Frictional Structural Cyclical Real Wage
  38. 38. Unemployment rate - the level of unemployment divided by the labor forceLabor force - the number of people employed and unemployed but finding work
  39. 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

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