The document discusses the evolution of economic thought from ancient Greek philosophy through the development of various economic theories, including mercantilism, physiocracy, and classical economics, highlighting key figures such as Adam Smith and Karl Marx. It explores the intertwined relationship between economics and other social sciences, emphasizing the practical implications of economic principles in society. Additionally, it provides an overview of the historical context and economic policies affecting the Philippines, detailing the impacts of colonialism, wars, and various presidential administrations on the country's economy.

2. In Partial fulfillment of the Requirements in Major 10:
Production of Social Studies in Instructional Materials
Bachelor of Secondary Education
A.Y. 2010 - 2011

4. What is your
interpretation regarding
the pictures??..

6. Principles of
Economics

7. Is a social science that deals with
the study of man’s activities and
efforts to use the limited
resources for the satisfaction of
the unlimited needs of man.

8.  The term economics came from the
Greek word oikonomos which
means “household management”.

9.  Economics was known as political economy
and was at the center of study of philosophers
during the 17th century. There were no ideas and
philosophies that explains economics back then.
All studies were focused on the political scenario
of the time. Later on, the study of economics was
given attention. Different theories, researches,
ideas, and points of view hat concerned the
activities of man in the society were developed.

10. The concept of economics as a focus of
study began with the Greeks and Xenophon’s
instructional treatise on efficient management
and leadership entitled Oeconomicus. He
described the Greek economy as a premarket
where products were neither uniform nor traded
on organized exchange or analyzed for their
own sake. They emphasized human contract
through the practical nature of leadership and
policy.

11. In contrast to these, Plato in his
Republic presented a blueprint for an
economy where cities are founded on
key principles of specialization and
division of labor that creates mutual
interdependence and further leads to
reciprocal exchange.
Aristotle, in spite of being
Plato’s pupil, did not agree with his
teacher’s concept of an ideal state. He
defended private property for all
classes and not just for the established
leaders. In his Topics and Rhetoric,
Aristotle viewed exchange as a way o
satisfy individual and collective wants
and not as a means for the state to
accumulate wealth.

12. This process of accumulation of wealth became the
preoccupation of the mercantilists. They emphasized the utilization
of all available lands for agriculture, mining, or manufacturing. They
stressed that all raw materials should be used for domestic
production because finished products have higher price than raw
materials. Their ultimate goal is to accumulate silver and gold by
selling their finished products and keeping domestic money in local
circulation.
The failure of mercantilism in keeping agricultural output
from declining and taxes from increasing paved the way for the
physiocrats.

13. Francois Quesnay and his group who were
called Physiocrats believed in the importance of
nature in the economic development of a
country. They strongly agreed that man should
use natural resources wisely and properly o
attain the maximum advantages from it.
Aside from this principle, Quesnay became
popular in his Tableau Economique, which
illustrated the flow of the factors of production,
goods, and services in the different sectors of
the economy. According to him, inorder to have
equilibrium in the economy, it is necessary to
use the natural resources wisely to attain
development.

14. These differences in principles
between the physiocrats and the
mercantilists paved the way for the
recognition of another group called
Classicists. They were the
economists from the Classical School
led by Adam Smith who is known as
the “father of Modern Economics”.
Adam Smith explained the Laissez
Faire doctrine or the “let alone
policy”.

15. David Ricardo was known for his
brilliant ideas about the effects of natural
sources like land in the development of
economy. According to his principle the Law
of Diminishing Marginal Returns, increasing
number of people will drive man to cultivate
even the idle lands to support their
necessities in life.
Thomas Robert Malthus, on the other
hand, discussed the effects of the rapid
increase of population. His theory is known
as the Malthusian Theory. It was written in
his book, An Essay on the Principles of
Population. It stated that if population
increases rapidly than the supply food, it can
cause famine and will affect the economic
activities of man.

16. The Law of Supply and Demand
is the underlying principle of the
group where John Maynard Keynes
belong. According to Keynes, the
government plays a significant role in
maintaining equilibrium in the
economy through public spending and
keeping the balance among demand,
supply, and the market prices. He
wrote the book General Theory of
Employment, Interest, and money.

17. Karl Marx, the
“Father of
Communism,” shared
his principles and
ideals regarding he
cause of poverty in a
society. Marx believed
that poverty of the
proletariat or working
class is caused by
abusive practices of
the rich capitalists that
safeguard their own
selfish interests and
their accumulation of
wealth.

18. 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 the
truth when stating certain problems of society.
 Man’s activities - Individuals strive hard to accomplish
their responsibilities, duties and functions in society and to
satisfy their needs.
 Limited resources - scarcity is main cause of
conditions in an economy. This is the reason why man
continues his struggle for survival.
 Unlimited activities - man has no satisfactions. He
wants to have so many things in his life. His desire for variety
of good makes living complicated and more challenging.

19. Any Question??....

20. Answer the following:
1. He is considered as the leader of the physiocrats.
2.
Got the Perfect
He is known as the Father of Modern Economics.
3.
Score? Smith
Adam 
He is an economist who believes in the importance
of land.
David Ricardo
4. He wrote Topics and Rhetoric. Aristotle
5. He is known as the Father of Communism.
Karl Marx

21. 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?

22. Economics and other
Sciences

24. Economics as a social science:
Economics – is a social science because
the center of its study is the people and society.
As a science, the scientific method is used in
analyzing certain problems related to and
affecting the economy.

25. Economics and other sciences –
many disciplines of study are related
to economics. It shows the importance
of the discipline to our lives and
economy.
History and economics – history
records how the tools of early man
gave to present way of life. One
example is the history of our economic
principles and policies during the
different periods of time. This resulted
in the present condition of our
economy.
Ethics and economics –The
morality of man is one of the most
important elements in the progress of
a country.

26. Political Science- The study of government
structure, functions, responsibilities, and law set are
vital because all of these and influence our lives and
the economy as a whole.
Chemistry and Economics- the types of
chemicals used in agriculture as fertilizers and
pesticides in producing the goods are necessary
consideration for setting and market price of the
product.
Physics and Economics- Technology, invention
and innovation are the outcome of scientific studies.
Biology and Economics- it is the study of
processes and characteristics of plants and animals.
Mathematics and Economics- The study of
economics is facilitated by the use of numbers,
statistics, mathematical equation, formula, graph,
which are learned in mathematics.

27. CHEMISTRY HISTORY
E
C
BIOLOGY
O POLITICS
N
O
PHYSICS M ETHICS
I
C
S
MATHEMATICS STATISTICS

28. Economics is
always part of
our life and
whatever we
make

29. A. Identification: write the answer on the
blank.
Political Science 1.The study of government structure
and policies.
Biology 2.Study of plants and animals.
Scientific Method 3.The application of science in
economics.
History 4.The recorded struggle of man from
the past to the present
Mathematics 5.It concerns the use of graph and
statistics.

30. Significance and
Scope
of Studying
Economics

31.  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.

32. 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

33. While this branch tackles the aggregate
accounts of the economy. The Gross National
Product (GNP), (GDP), National Income (NI), and
Inflation are discussed in
Macroeconomics

34. Let us analyze the following scenario:
 The basic problems of local farmers are landless, unfair global
competition, 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 make
education more inaccessible to the poor.
 The intensifying civil war in the countryside and riding incidence of
crimes like kidnapping, drug trade, and robbery are indicative of a
worsening economic condition.
 Rice security program depends on importation.
 Foreign investment grew by 26%.
 The increasing number of newly hired migrant workers shows worsening
domestic joblessness.
 Employment in agriculture improved a little.

35. 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.

36. Stages in Man’s
Livelihood

37. The desire of man to improve his life made
him seek ways and tools that can help him
on his economic activities.
From the Machineries
Nature
Significant Role of The use of Simple
Agriculture Tools
Utilization of the Gift of the
Nature

38. An Overview of
Philippine Economic
History

39. The Datu was the leader in the earliest communities in the
Philippines called barangay. Each barangay had their own culture
and economic activities.
Exchange of goods was done by our forefathers’ skills and
abilities. They showed a high level of technology when hey were
able to build the rice terraces. They were able to have abundant
agricultural products, which were used in the exchange of goods.
Early Filipinos and other settlers around the world used stones
as tools. Tools were improved with the discovery of metals.
Our country is also rich with
aquatic resources like pearls, corals,
and different kind of fishes.
Our forefathers had their own
identity and source of livelihood before
the coming of the Spaniards.

40. 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 of
Spain. The one who received it is called the encomiendero. The
encomiendero, who is usually a Spanish soldier, managed the encomienda.
He is the one responsible in maintaining peace and order, teaching spiritual
wok, and collecting taxes in his land. That kind of power and authority were
given to him king of Spain but the encomiendero abused this powers.
Maltreatment and abuses were widespread. The King of Spain issued a royal
decree to stop all the abuses of the encomiendero and required all
landowners to register their lands in the Philippines. The decree widespread
anomaly in land registration. Hectares of lands owned by the Filipinos were
ignorant and not aware of the provisions of the decree and real intentions of
the Spaniards.
Governor General Jose Basco y Vargas established the goal of
developing the agricultural sector of the country. The production of silk was
introduced through the planting of mulberry trees. Governor Basco repaired
the bridges and roads to speed up transportation of goods to the different
parts of the country.

41. Our natural resources were devastate
during the American and Spanish wars.
Americans came here to colonize us. They
improve our way of living. Land ownership
emphasized through the implementation of the
Homestead Act and the Torrens Systems.
Americans tried to bring back the lost lands of
the Filipinos. They had the intentions to give land
to the poor Filipinos, especially the farmers. But
unfortunately they failed because most of the
Americans owned a great number of lands like
what happened during the Spanish period.
Agricultural Development- the
American introduced major crops to the farmers.
The Bureau of Agriculture was established in
1902.
Progress industries- the first step of
the Americans was introduce the new
machineries and technology in industries.
Free trade- it is concerned with the
exchange of goods and services without trade
barriers like tariff and quota. Tariff is the is a tax
levied on imported goods while quota is the
limitation in the quantity of exported and
imported goods.

42. 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.

43.  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.

44.  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.

45. Economic Policies of
Different Philippine
Presidents

47. The administration of Roxas was
a period of rehabilitation. There was a
need for economic recovery in our
country after the war because there
were a lot of damages in our buildings,
communication and transportation
facilities, industrial plants, and the like.
Our government was facing a lot of
problems due to lack of funds. As a
consequence, President Roxas was
forced to accept the offer of the
Americans regarding the 2 laws
enacted, namely; the Bell Trade Act and
War Damage Act.

48. President Quirino continued
the economic policies, which
President Roxas started. His
administration emphasized
import substitution policy. He
underscored the control on
importation. His goal was to solve
trade deficit to achieve balance of
trade. There is trade deficit when
the expenses from import exceed
the export income.

49. President Ramon Magsaysay
started to solve the problems on the
land redistribution. Through the Land
Reform Act of 1955, he gave emphasis
on the welfare of the poor farmers who
desired to own agricultural land. He
established the National Resettlement
and Rehabilitation Act (NARRA) to give
land to some farmers. He also
established the FACOMA (Farmers’
Cooperative and Marketing Association)
to organize the farmers.

50. 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 the
distribution of resources. He supported the Retail
Nationalization Trade Act.

51. President Diosdado Macapagal
lifted the control on foreign currencies
and allowed the importation of goods,
which resulted to devaluation. His
economic policy was decontrol. It is
called decontrol because he allows the
foreign products to enter freely in our
country. He signed the Agricultural Land
Reform Code. It abolished the kasama
system in tilling the land. It paved the
way to the implementation of land
reform. He also established the Land
Bank of the Philippines.

52. President Ferdinand Marcos served the
government for 20 years, the longest term of
office for a Philippine president. He continued
the Decontrol Policy of Diosdado Macapagal. At
first, the economy was doing well. National
Income increased rapidly; production was high;
and land reform was introduced under
Presidential Decree Nos.2 and 27. he declared
Martial Law in the country. His extended term of
office had bad effects in our economy. Many
corporation were under the administration of
his family and friends. Cronyism and nepotism
were rampant. Foreign debt became higher and
laws became tougher. There was a negative
figure in national income; public funds were
corrupted and missing; and eventually
economic crisis was prevalent. He was exiled to
Hawaii during the height of EDSA I.

53. President Corazon Aquino was the first
woman president of our country. She was put into
power through a bloodless revolution known as
EDSA I. democracy in the country was established
once again. She started to organize and reform the
politics, economy, and the economic status of our
people.
Corporations under the cronies of the
Macros administration were sequestered.
Government corporations, which are considered as
nonperforming assets, were sold to private sectors.
Privatization was the centerpiece of her reform. She
implemented the Comprehensive Agrarian Reform
Program (CARP) to emphasize he economic
condition 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.

54. 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).

55. The 13th president of the Philippines, Joseph
Estrada is the most celebrated Philippine president.
A former movie actor, he was involved in different
controversies particularly when he was the top man
of the country, but the most controversial was the
impeachment case. The impeachment case led to
his imprisonment.
During his term as President, his economic
agenda zeroed in on the alleviation of poverty that’s
why his battle cry was ERAP para sa Mahirap.
Because of this, he gained the heart and support of
the Filipino masses through his charisma. He was
not able to fulfill his plans and promises o the poor
people because of he sudden change leadership.

56. The second woman president of the country,
President Gloria Macapagal Arroyo was put I power
through the EDSA People Power II after the
controversial impeachment trial of President Joseph
Estrada.
Her administration focused all its efforts to
implement the previous administration programs,
which were not attained. She emphasized the
importance of transparency in the government. To
check graft and corruption, all government
transactions must be transparent. Through her
administration is facing many problems like peace
and order, high prices, insurgency, and an attempt
to destabilize the government, she is trying to
improve projects and programs that have already
been implemented by the past administration
particularly projects related to the upliftment of the
economic status of the poor. She launched the
program Pagkain sa Bawat Mesa. She has also tried
to stabilize the peso – dollar exchange rate.

57. P - Noy

58. Our Country’s
Resources

59.  Refer to anything are used to produce
goods and services that satisfy the needs of
man.
Natural resources composed of land,
water, forest, energy and minerals; human
resources; and the physical resources.

60. We are rich in natural resources. Resources
are gifts from nature or sometimes called a gift
of God. All our natural resources are essential
for the development of our economy and to
improve the way of life of the people.

61. Our total land area is 300,000 square
kilometers (Km2) comprising our forests,
plains, mountain ranges, hills, mineral land,
and plateaus.
Land resources are God – given so it cannot be
increased. Land includes all non – replaceable
resources above and below it.

62. More than 50% of our land is
classified as forestland. Our country is
popular around he world because of our
abundant resources.
Different kinds of trees can be
found in our forests, like the molave,
dipterocarp, narra, and yakal which are
the needed in our economy.
Forests give a lot of advantage
to the people and the economy. It
provides employment through logging.
It generates income for our economy
through the export market. It provides
watersheds and ecological balance for
our endangered species of wildlife.

63. Nowadays, we are
experiencing the effects of
rapid depletion of forests.
The flash floods in the
different places of our
country are due to forest
denudation. It affects the
lives of people and their
sources of living. The
extinction of our endangered
species of wildlife, the
lowering of the water level in
our streams and rivers, and
the intensity of the effects of
the depletion of our forests.

64. The Country’s
Resources

65. Our water resources are
estimated at 1,661,300 square
kilometers, which is larger than our
land resources.
Water resources are renewable.
It is the source of different aquatic
resources that are needed in our daily
lives.
The Philippines is known today
as the world’s largest producer of
Tilapia. In 1993, our country produced
more than 96,000 metric tons of tilapia
surpassing of China. We are expecting
an increase in our tilapia production
from 100,000 metric tons (mt) to
200,000 mt in the years to come.

66. Pollution. Because of lack of discipline
among us, bodies of water become
polluted due to improper disposal of both
personal and industrial wastes. As a
result, it causes the contamination of the
water and the presence of bacteria like so
called dinoflagellates that causes red tide.

67. Lack of knowledge.
Majority of the fisherman
were not able to finish
normal schooling. They were
not able to acquire skills and
knowledge. They need to
develop their abilities as this
will help them in using the
modern and state of the art
machineries and facilities in
the fishing industry.
Some of the laws that protect our
water resources are:
Republic Act3931. this law prohibits
and penalizes persons who throw their
garbage that can cause pollution of water
resource.

68. Republic Act 7160. this is the Local
Code of the Philippines. It implements the
laws on sanitation and cleanliness in the
environment and proper garbage disposal.
Executive order 54. this law established
the Pasig River Rehabilitation Commission. Its
main objective is to clean, rehabilitate, and
save the Pasig River as one of the historical
rivers in our country. The government has a
great role and responsibility in protecting our
water resources. The government must
strictly implement the laws and impose
penalties to those who violate the law. It is
about time that the government shows its
political will in protection the water
resources.

69. The land that covers these resources belong
to public domain. Mountains, agricultural land,
forests, and national parks are owned by the state.
Mineral resources is one of the most
important resources of our country. It is not
renewable and can be extinct in the near future.
There are three kinds of Minerals: metallic,
nonmetallic, and gas.

70. Mineral resources is important in our
economy whether metallic or non metallic. The
production of gold, silver, and copper
decreases every year. It is very alarming
because if the low production continues, we will
experience limited supply of metallic mineral
which may affect are economy.
Gas, fuel and petroleum are the most
important kinds of gas. This third classification
of mineral is a source of energy in our country.

71. Human Resources
and Population

72. Human resources consist
of abilities, knowledge, skills,
and manpower, which are used
in the production of hoods and
services. These factors are
essential in the productivity of
the labor force. Without when we
talk of human resources, we
always relate this to population.
Population refers to the total
number of living in a certain
area. The population of one
country represents its human
resources.

73.  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 population
Increase in human resources
Threat to limited resources

75.  Famine
 Poverty
 Lack of shelter
 Unemployment
 Environmental degradation

76. Theories on
Population

78. Thomas Robert Malthus is an
English economist and priest who
wrote the book essay on the principle
of population. According to him,
population grows faster than the
supply of food. Population increases in
geometric ratio while the food supply
in arithmetic form. He mentioned that
if population growth were unchecked
and uncontrolled, people would
experience famine and death.

80. Fertility theory is related to consumer
behavior, having more children means increase in
family expenses and more responsibilities. At this
point, parents think of the opportunity cost of
having more children. Opportunity cost is the
benefit given up for other things like in the case of
a mother, if she decides to get pregnant and have
another child, she has to resign from work to take
care of her children at home. So the opportunity
cost is the salary that she was previously receiving
as a worker. In having more children, there are
factors that the couples must consider like the
increase in family expenses.

81. 1. STAMHO TBORRE UHTSLAM
A clergyman who explained one of the population theories
2. OZRE TLANIPOUPO RTGHWO
Known as the fourth stage or demographic transition theory
3. NEUCDAIOT
Factor that will help the married couple understand the effects of
having more children
4. HBITRRTEA
Number of born children
5. YERFIITLT
Ability or the capacity to bear a child

82. Labor Force

83. 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
LaborForce
LFPR x100
WorkingAgePopulation

84.  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.

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

86.  Blue collar job uses more physical effort and
skills.

87. Productivity of
Labor Force

88.  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

89. To have effective and productive workers, the
government must provide :
 Sufficient jobs
 Job security
 Healthy working environment
 Just compensation
 Proper training

90. Physical
Resources

91. - Are the things that are made by man using his
skills and abilities. These resources can be useful
in man’s daily activities.
- refer to material things created by man that are
used for further production.
- Physical Resources act as mediation between the
raw materials and the labor force to complete the
production process in the different industries.

92. Needs and Wants

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

94. These factors play a vital role in changing our
needs and wants.
 Age
 Education
 Tastes and Preferences
 Income
 Profession

95. Abraham Maslow, a
sociologist, underscores that
each individual has different
needs. Human needs have
different levels regardless of the
individual’s abilities to satisfy
these needs.

96. Self
Actualization
Appreciation
by others
Love
Security needs
Physiological needs

97. The Needs of
Developed
Countries

98. Countries differ from one another in many
aspects. Even the needs and wants of
developed and developing countries are
different. The level of development of a country
is measured by the kind of needs and wants of
its people. The needs of developed countries
like Japan, U.S., Germany, England, and other
countries are very much different from the
needs of developing countries like Philippines,
Vietnam, and Thailand.

99. The needs of man depend on social and
economic progress of the economy. Material
things must be provided and freedom
secured to give them a level of economic
prosperity. Having met those needs,
progressive society will be at hand.
Consider this
synthesizer…

100. Abundant
Material
Progressive Progressive
Society Society
Progressive
Society

101. Scarcity

102. - Is a natural phenomenon which
sets a limit in the production of goods
and services needed by man. All of us
demand goods, which are definite
amounts and for which we have to pay
in terms of money. Free goods are those
goods we consume freely and for which
no amount is paid. Economic goods are
goods we have to pay. Each member of
society has to compete with each other
in using the scarce resources to produce
a limited supply of economic goods.

103. Shortage

104.  - it should be mentioned that Scarcity is a
natural condition prevailing in every country
and it is the reason why we need to maximize
the use of our resources. While scarcity is a
seemingly endless problem, shortage is a
temporary condition in the economy. The lack
of supply in goods is caused by the
manipulation of some individuals resulting to
an artificial shortage.

105. of economic problems. There are two
conflicting situations:
 The unlimited needs of man; and
 The limited capacity of productive resources.

106. 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?

107. Basis of
Consumption

108. Production Consumption

109. - Deals with buying and using goods
and services to satisfy our human needs.
Consumption is a major concern of
economics in which the different activities
of man depend.
- Consumption cannot be separated
from production, which depends entirely on
consumption.

110. 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.

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

112. 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.

113. 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.

114. 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.

115. 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.

116. The Consumption
Pattern of Filipinos

117.  Poverty Standard – people who belong to this
classification are considered the poorest of the
poor because they don’t have the capacity to
meet their basic needs.
 Bare – living Standard – for people who belong to
this classification, to satisfy all the basic needs is
difficult. Having the usual three meals a day is
sometimes not certain.
 Decency Standard – people have the chance to
choose the kind of products they want to use.
Income is much higher and better which gives
them the assurance of providing all the basic
needs and wants of the family with an extra to
spare.

118.  Comfort Standard – income is sufficient
enough to enjoy the comforts in life. There is
worry – free living. Satisfying all the needs
and wants is not a problem. People have the
opportunity to save their income.
 Luxury Standard – a small percentage of the
Filipinos live under this Standard. People buy
and use high – quality products.

119.  Indebtedness
 Colonial Mentality
 Regionalism
 Pakikisama (Peer Influence and
Pressure)

120. The Modern
Consumer

121. “All of us are
consumers,
whether young
or adults.”

122. 1. Analytical
2. Looking for an alternative or a
substitute
3. Alert
4. Reasonable
5. Budget conscious

123. 1. Consumer should be united so that they will
be strong enough to fight for their rights.
Achieving the goals, purpose, and
intentions of any consumer organization
depends on the cooperation, and unity of
the members.
2. Protect the environment.
3. Always be alert, watchful, and mindful of
the wrongdoings and malpractices of the
sellers, businessmen, and the government.

124. 4. Support and patronize local products and be
part in developing the local industries which is
necessary for our economic development.
5. Take action and be vigilant. Consumers must
monitor the proper implementation of prices of
basic commodities and the other laws against the
abusive businessmen and sellers. By doing this,
consumers show courage in fighting the
irregularities that affect the welfare and rights of
the consumers.

125. 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

126. 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)

127. 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.

128.  Department of Trade and Industry
 Bureau of Food and Drugs
 Local municipalities
 Mass media

129. Identify the rights and characteristics of the consumers by
giving the missing letters.
1._ L _ R T
2.V _ G I _ A _ T
3._ H O _ S _
4.S_ C_R _ T _
5._ U _ GE _ C_ N _ _ I _ _ S

130. Systems of
Allocating
Resources

131. Refers to the mechanism
deals with the distribution of
natural resources, human
resources, and physical resources
to diverse use in order to answer
the problem of scarcity.
Market is considered as the
most important mechanism of
allocation because it is where we
can find the variety of products
that show how the resources are
allocated

132. - 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.

133. 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.

134. 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

135. 3. Mercantilism – during the 16th
and 18th century, mercantilism
prevailed in Europe. Gold and
silver were very essential.
Everybody wanted to acquire
more gold and silver to become
powerful. During that time, a
country hat has abundant supply
of gold and silver became
powerful because these metals
were considered as the most
precious and were used as
yardsticks for power and
supremacy.

136. Capitalism and
Communism

137.  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.

138.  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

139.  Is described as a combination of capitalism
and communism. Main industries are
controlled by the state and individuals are
allowed to own the small industries in which
the state can interfere.

140.  Resources and industries are controlled and
owned by he state under a dictator
 People are for the state, not the state for the
people. It is the battle cry in a fascist society.
People are obliged to follow the rules, laws,
and regulations set by the state. Individuals
have no right to complain and defy the rules
of the state.

142.  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.