REVIEWER Who owned land during Spanish Period?

Encomenderos, Spanish Clergy, Inquilinos, Tenants

MODULE NO.1: ECONOMIC HISTORY OF THE
of Church, Spanish Elite, Rich Mestizos and Filipino,
PHILIPPINES
Spaniards born in the Philippines, and some Indios.
Route of the Manila Acapulco Galleon Trade
Monopoly System – the controlled production of only
Bolleta/Boleta (Ticket) 250 mexican pesos an one kind of product in specific place.
amount paid in order to join the galleon trade. It costs Bandala System – the policy of forcibly selling one’s
around 200 mexican pesos.
products to the government at a set price.
OBRASPIAS an early banking institution established
Polo y Servicio – forced labor for Filipino males aged
by Spanish priests using money collected in church 16 to 60 in a period of 15 to 40 days a year.
intended for charity
Falla – Exemption fee for Polo y Servicio / forced
Jose Basco y Vargas the 44th Spanish governor
labor
general of the Philippines.
Tribute – direct tax of all Spanish colonies
Sociedad Economico De los Amigos Del Pais an
organization of leading businessmen in the Custom Taxes of Tarrifs – for imported and
Philippines assisted Basco in carrying out economic exported goods.
reforms.
Commodity taxes – for goods such as Tobacco or
Real Campania De Filipinas established by the Abaca
Spanish crown to promote direct trade between the
Gambling Taxes – for vices such as cockfighting
Philippines and Spain.
Tydings-Mcduffie Act – solidified American rule in
Suez Canal a man-made waterway in Egypt which
the Philippines by turning the country into an
shortened travel between Europe and Asia.
American commonwealth territory.
THE AMERICAN COLONIAL PERIOD (1895-1946)
Colonial Mentality – the Filipino traits of preference
Free Trade – an economic policy that disallows for foreign goods and customs.
government intervention on economic activities.
THE JAPANESE OCCUPATION (1941-1945)
Payne Aldrich Act – This law allowed duty free
importation of U.S. goods to the Philippines. Shortage – a phenomenon wherein there is little
supply of a good being demanded.
Simmons Underwood Act – prevented products with
Rationing – Government distribution of basic needs
20 percent raw materials from the Philippines from
in order to control its supply.
entering the U.S Markets.
Niche or Black Market – A market for illegal goods,
THE PHILIPPINE PRE-COLONIAL PERIOD (900-
usually with an informal structure or setup.
100 AD)
Japanese Monetary Policies in the Philippines –
Kaingin System – slashing and burning of forests to
clear it for agriculture. lowering the salaries of government employees’
forcibly increasing contribution to government
Encomienda System – under this system, a piece of insurance schemes. Imposing/Imposition of new sales
land was given as a reward on a King’s soldiers who and luxury taxes encouragement of gambling such as
help conquering territories. cockfighting, horse racing, and jai alai.
Encomenderos – a Spanish individual rewarded with
a piece of land.
MODULE NO. 2: RESOURCE UTILIZATION Salary, however, is compensation quoted on a
monthly or annual basis.
Economics the study of how society uses its scarce
resources, defined by Thomas Carlyle, a 19th-century Capital, in layman's term, is the money used by
Scottish philosopher and writer. entrepreneurs to run their business.

 Studies the efficient allocation of the scarce Entrepreneurial ability is the effort to organize the
means of production toward the satisfaction production process.
of human wants. (Slavin)
Distribution is the allocation of the total product
 A social science concerned with using
(money incomes) among factors of production.
scarce resources to obtain maximum
satisfaction. (Walstad and Bingham, 1993) Land – RENT
 The study of how societies use scarce
Labor-WAGES
resources to produce valuable commodities
and distribute them among different people. Capital -INTEREST
(Samuelson and Norhaus, 1992)
Entrepreneurship-PROFIT
 The study of production, distribution, selling,
and use of goods and services. (Collin,1997) Consumption is the utilization of a good or a service
 The study of how people use their limited for one's very own satisfaction.
resources to try to satisfy unlimited wants. Opportunity cost is the foregone value of the next
(Parkin and Bade, 1991) best alternative - the value of things we give up.
SCARCITY is the imbalance between human needs Production Possibilities Curve
and wants and the means of satisfying them.
Production Possibilities Curve is a curve that
Utility is the total satisfaction received from illustrates the production possibilities for the economy.
consuming a good or service.
Full employment is an economic situation in which
The Concerns of Economics all available labor resources are being used in the
most efficient way possible.
In a market economy, each of these resources is
traded in exchange for a type of income. We sell Benefits of Full Employment
these resources to make income with the very Full employment can provide a number of benefits
purpose of satisfying our wants. both to individuals and to the overall social and
economic balance of a country.
Production is the creation or addition of utility - total
satisfaction received from consuming a good or  Reduced poverty
service.  Improved wages
 Preventing the unemployed from becoming
Land, in economic term, is not just the mere land we
demotivated
thought it was. It includes natural re-sources such as
 GDP growth
minerals, oil, coal, soil, water and the ground in which  Reduction in government spending on
these resources are found. This is used in the unemployment benefits
economy through extraction (mining) and agriculture.  Less government borrowing due to
Labor is the work, time and human effort included in increased revenue
the production. This people are being paid for their Full production is when resources are being
work rendered via wages and/or salaries. allocated in the most efficient manner.
Wage is a compensation based on the number of Underemployment of resources lowers the
hours worked multiplied by an hourly rate of pay. productive output of the nation.
A capacity utilization rate less than 85% is Competition, Trust, Equity, and Efficiency
considered underemployment of our capital
resources. To allow price mechanism work, there should be
competing entities in the industry. If markets
Production efficiency is an economic level at which would not be competitive enough, then the price
the possibilities curve. Productive efficiency occurs system would not work justly and the invisible
only when we are operating on the production hand becomes more obscured.
economy can no longer produce additional amounts
of a good without lowering the production level of Circular Flow Diagram Displays the relationship
another product. of resources and money between firms and
households.
Economic growth is an increase in the capacity of
an economy to produce goods and services, The economic role of government can best be
compared from one period of time to another. explained by taxonomy of its economic policy
aims. The government influences economic
MODULE NO. 3: MIXED ECONOMY activity through two approaches: monetary policy,
and fiscal policy.
What to Produce? All productions must decide what
to goods and/or services they should produce given Monetary Policy Is a kind of policy where the
only limited resources. government regulates the money supply and
interest rates.
How to Produce? There are number of ways to
produce a product of equal quality However, it is Fiscal Policy A kind of policy where government
important to have a clear grasp of all your uses its power to tax and spend
alternatives.
Market failure is a situation where the private
For Whom to Produce? All productions are made for sector cannot able to allocate efficiently by our
somebody to consume. resources by means of using price mechanism or
when the operation of market forces leads to a
The Invisible Hand Theory is amarket force that welfare loss.
helps the demand and supply of goods in a market to
reach equilibrium automatically. Introduced by Adam Government Failure Even with worthy intents,
Smith in, in his book The Wealth of Nations (1776). governments rarely get their policy application
correct. They can tax, control and regulate but
Price mechanism describes the means by which the outcome may be developing of market failure.
decisions taken by consumers and businesses
interact to determine the allocation of scarce Conflict of interest: The chase of self-interest
resources between competing uses. Plays three between politicians and civil servants may lead to
important functions in a market: a misallocation of resources.
 Signaling Purpose Prices perform a Policy myopia: Politicians has that tendency to
signaling function-they vary to demonstrate look for short term solutions rather than making
where resources are required and not. considered analysis of long-term considerations.
 Change of Preferences Producers are able
Regulatory Capture: Industries under the
to gather information about the changing
control of a regulatory body operates in favor of
nature of wants and needs through
the interest of producers rather than consumers.
consumers choices.
 Measuring Function Prices serve to Economic systems define how market entities
measure scarce resources when demand in and market forces interact. There are four
a market exceeds supply. When there is a primary types of economic systems in the world:
shortage, the price is bid up - leaving only Capitalism, Socialism, Communism and Fascism.
those with the willingness and ability to pay
purchase the product. Capitalism is an economic system where private
ownership and control is allowed in accord with
 their own interests and maximize its profits base curves are drawn as 'downward sloping' due to this
on its discretion. inverse relationship between price and quantity
demanded.
Communism is an economic and social system
in which there is no private property. Supply is the total quantity of a good that is available
for purchase at a given price. It is the relationship
Fascism is an economic and governmental between the quantities of a good or service
system led by a dictator, where private ownership consumers will offer for sale and the price charged for
of the means of production exists but the that good.
government has a strong centralized power for
planning. Examples of Quantity Supplied:
Socialism is an economic and political system When the price of a chocolate is P80 the quantity
that pursues to reallocate the wealth more supplied is 300 chocolates a week. If the price of a
equitably by the collective ownership of natural chocolate falls from P80 to P50, the quantity supplied
resources and major industries, such as public will fall from 300 to 200 chocolates.
utilities.
Supply Schedule A supply schedule is a table that
A mixed economy consists of a mixture of shows the relationship between product prices and
markets and economic planning, public quantity supplied.
ownership and private ownership, or free markets
and economic interventionism. Supply Curve: A supply curve is simply a supply
schedule presented in graphical form. It shows the
: DEMAND, SUPPLY AND EQUILIBRIUM quantity supplied at different prices. Supply curves
are drawn as 'upward sloping' due to this positive
Alfred Marshall A great English economist who relationship between price and quantity supplied.
came up with the idea of the law of demand and
supply. Prices are set through the forces of Price Floor and Ceiling
demand and supply as same as the cutting done
by two blades of scissors. Just as you need two Laws that government enacts to regulate prices are
blades in order for the scissors to function. called price controls. Price controls come in two
flavors. A price ceiling keeps a price from rising above
Demand is an economic principle that refers to a a certain level (the “ceiling”), while a price floor keeps
consumer's desire and willingness to pay for a a price from falling below a certain level (the “floor”).
specific good or service.
Price Ceilings are maximum prices set by the
Examples of Quantity Demanded: government for particular goods and services that
they believe are being sold at too high of a price and
When the price of a chocolate is P80 the quantity thus consumers need some help purchasing them.
demanded is 300 chocolates a week, if the price
of a chocolate falls from P80 to P50, the quantity Price Floors A price floor is the lowest legal price that
demanded will rise from 300 to 400 chocolates. can be paid in markets for goods and services, labor,
or financial capital.
'Ceteris paribus' - "KEH-teh-rees PAHR-i-bus" A
latin term means 'other things being equal'. This Equilibrium Economic equilibrium is a state in a
clause in the law of demand refers to other things market-based economy in which economic forces –
except price being equal. such as supply and demand – are balanced.
Economic variables that are in equilibrium are in their
Demand Schedule: A demand schedule is a natural state assuming no impact of external
table that shows the relationship between product influences. Result of opposing economic variables
prices and quantity demanded. gravitating towards their natural state.
Demand Curve: A demand curve is simply a demand
schedule presented in graphical form. It shows the
quantity demanded at different prices. Demand
MODULE NO. 5: ELASTICITY OF DEMAND
Elasticity – measures how sensitive quantity
demanded is to a change in price.