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BAsic Economic Question!

1. what to produce
2. how to produce
3. for whom to produce

Factor of production
1. Land
3. capital
4. entrepreneurship

factor of supply
1. Cost of production
2. Price of related goods
3. No. of firms in the industry
4. seasonality
5. Expectation of future price

Exemptions to the Law of Demand

1. Giffen Goods - theoritical goods, when price increases demand also increases
2. Snob goods - When a lot of people buy the good.. its demand dies down


Scarcity - the natural limitation of resources

Assumption - principle that economist use to simplify reality

market - is a mechanism by which the buyers and sellers interact

Law of Demand - when price increase quantity demanded decreases when price
decreases quantity demanded increases. its inversely proportional or negatice

Supply - a market expression of the commulative willingness and ability of all

firms to sell different amount of product.

Law of supply - when price increases quantity supply increases when price
deacreases, quantity suplly decreases.

why study economics?

1. to learn new ways of thinking (Cost & Benifits thinking)
2. to understand society
3. to understand global affairs

Division of Economics
1. Microeconomics
2. Macroeconimics

Government Role in Combination Inflation

Fiscal Policy - is the manipulation of government spending and imposition of taxes.
a. Expansionary Fiscal policy - this is commonly known as "Pump Priming" the
economy charaterized by a decreases in tax rate and increases in government
spending to spur growth and employment.
b. Contractionary Fiscal Policy - causes an increase in taxes and decrease in
government spending to combat inflationary pressure in the economy.

Monetary Policy - manipulation of saving and investment of the financial. sector to

achieve the twin objectives of the macroeconomy
a. easy money policy - increase in the supply of money (MS) in the economy to spur
growth and increase economic activity.
b. Tight Money Policy - decrease in the supply of money (MS) in the economy of
fight inflationary pressure.

Purpose of Taxation
1. influence population trents of trade
2. reallocate resources
3. create of sense of identity

Sources and Origin of Taxation

1. The Constilation
2. Statutes of Presidential Decrees
3. Bureau of internal revenue regulations
4. Judicial Decrees
5. Provincial Municipal and Barrio Ordinances
6. Observance of International Agreement
7. Administrative Ruling and Opinions


1. cooperative Code of the Philippines (RA 69398)
2. Cooperative Development Authority (RA 6939)
3. Executive Order 95 and 96 issued by President Fidel Valdez Ramos


1. Open and Voluntary Membership
2. Democratic Control
3. Limited Interest on Capital
4. Education/Training Funds
5. Continuing Membership
6. Cooperation Among Cooperatives

1. Primary - members of which are natural
2. Secondary - members of which are primaries
3. Tertiary - members of which are secondary upward to one or more apex


1. Credits
2. Consumer
3. Producers
4. Marketing Cooperative
5. Service
6. Multipurpose


1. Institutional - members are employees of a specidfic inst.
2. Associational - members are those who have their to specific sector or
3. Community Level - members are based on a certified

Types of taxes
1. Direct taxes
2. the burden cannot be shifted tot he third party
3. Direct taxes are based on income and wealth
4. In most cases direcct taxes are progressive in nature
5. Direct taxes are compulsory in nature
6. Examples: income tax residence tax, real state, immigration tax
8. the tax burden can be shifted to the third party
9. Inderict taxes are based on expenditure and consumption.
10. All Inderict taxes are regressive in nature
11. Indirecttaxes are optional in the sense that they can be avoided

types of price control

1. Price ceiling
2. Price floor