Economics
whole rather than the individual
Economics is about allocation.
Scarcity – implies natural limitation in the
availability of a resource
⮚ If there is scarcity, one must do proper
allocation. (wise decision-making)
Shortage – means temporary and man-made
unavailability
Opportunity cost - the loss of potential gain
from other alternatives when one alternative is
chosen
Economics as a social science talks about the
human behaviour and the methods and
systems used by them in order to indicate what
is needed for consumption.
Economics is also a study of allocation and
making decision (cost and benefit)
There are 5 elements of economics:
1. Social Science
2. Scarcity
3. Allocation
4. Human Wants
5. Resources
Factors of Production:
1. Land – ex. Rent
2. Labour – ex. Wage
3. Capital – ex. Interest
4. Entrepreneur – ex. Profit
There are 2 branches of Economics:
1. Microeconomics
⮚ Is concerned with the behaviour of
individual entities such as the consumer,
producer, and the resource owner.
⮚ Is more concerned on how goods flow
from the business firm to the consumer
and how resources move from the
resource owner to the business firm.
⮚ Has a smaller scope compared to the
macroeconomics
2. Macroeconomics
⮚ Is a division of economics that is
concerned with the overall performance
of the economy
⮚ It studies the economics system as a
economic units that make up the
economy
Scarcity occurs because people have
unlimited wants and have limited resources;
therefore, there must be choices done as
to:
a. What to produce
b. How to produce
c. For whom to produce
So, the manner of the 3 basic economic
questions is either capital intensive
(machines) or labour intensive (people).
There are 4 types of economic systems:
a. Traditional Economy (cultural)
Advantages:
● Sets forth certain economic roles
for all members of the community
● Stable, predictable, and
continuous life
● Revolves around family
● Communities stay relatively close
and small
Disadvantages:
● Discourages new ideas and
technology
● Stagnation and lack of progress
● Lower standard of living – lack
modern convenience
● Have few mechanisms in place to
deal with disasters such as floods
and drought
b. Command Economy (authority)
Advantages:
● Central authority is in command
of the economy
● Capable of dramatic changes in a
short time
● Little uncertainty over choice of
career, where to work and losing
job
● Many basic education, public
health and other public services,
available at little or no cost
Disadvantages:
 ● Does not meet the wants and
needs of the people
● Lacks efficient incentives to get
people to work
● Requires large bureaucracy
which consumes resources
● New and different ideas are
discourages, no room for
individuality
c. Free Market Economy (price)
Advantages:
● Overtime, can adjust to change
● Individual freedom for everyone
● Little government interferences
● Decentralized – not concentrated
in the hands of few
● Variety of goods and services
● Higher degree of consumer
satisfaction
Disadvantages:
● Rewards only productive
resources; does not provide for
people too young, too old and too
sick to work
● Work / business face uncertainty
as a result of competition and
change.
d. Mixed Economy
Advantages:
● None
Disadvantages:
● None
⮚ A combination of traditional, command
and market economics
⮚ Need government intervention – creates
laws protecting property rights and
enforcing contracts
⮚ Government provide for national
defence, roads and highways systems,
conversation, and environmental
protection.
Economics Systems
⮚ Model to answers the 3 basic economic
questions (what to produce, how to
produce and for whom to produce)
There are 2 processes:
1. Consumption
2. Production
Philippine Development Plan (PDP) 2017–
2022
⮚ Implementing the Philippine
Development Plan (PDP) 2017-2022
requires coordination among
government agencies, private sector,
civil society, and development partners.
The efficiency of the coordination
depends on the adherence to the
intended outcomes, while the
effectiveness of the plan is evaluated in
terms of the extent of improvement in
quality of life of Filipinos, especially the
poor and marginalized.
⮚ Medium plan blue print and anchored on
ambisyon 2040
⮚ Address Filipino Aspirations
What is a “Matatag, Maginhawa at Panatag na
buhay”?
1. Own at least one car
2. Decent work
3. Own a medium – sized home
4. Have enough money for day-to-day
expenses
5. All children are college-educated
6. Relax with family and friends
7. Business owner
8. Able to take occasional trips around
the country
PDP has 3 major pillars:
1. Malasakit
- There will be great trust in public
institutions and across all of society.
Government will be people-centered,
clean and efficient.
- Fair and swift administration of
justice
- Promote Filipino culture and values
 2. Pagbabago
- There will be greater economic
opportunities, coming from the
domestic market and the rest of the
world
- Special attention : Disadvantages
subsectors and people groups
- Building safe and secure
communities
- Reduce vulnerability of individual
and families
- Accelerating Human Capital
Development
3. Patuloy na Pag-unlad
- Increasing growth potential
- Modern technology and product
- Innovation= harmonized research
and development
- Intervention to manage population
growth will be implemented
- Investments for human capital
development
Enabling and supportive economic
environment
⮚ Macroeconomic stability, supported by
strategic trade and fiscal policies
Cost Benefit:
⮚ Ascertain the accuracy of any decision
and provide foundation for comparison
Marginalized benefit = marginalized cost
Marginalized Benefit – increased benefit
related to a decision made to consume one
more unit of something
Marginalized Cost – increased cost related
to a decision made to produce one more
unit of something
Implicit Cost – not tangible and sometimes
does not require money and is any cost that
has already occurred but not necessarily
shown or reported as a separate expense
Explicit Cost – is the actual expenditure
incurred by a firm to purchase or hire the
inputs it needs in the production process
and are “out-of-the-pocket” costs and
accounting costs as they are shown in the
company’s books
Variations in benefit and cost due to stage of
recognition:
a. Spatial Dimensions:
⮚ Decision maker may not be aware of
social or public effects
Ex. Corporate Social Responsibility
(responsibility towards society/
environment)
b. Temporal Dimensions:
⮚ Only think about the present costs and
benefits
⮚ Has a temporary mind set
Variation in benefit and cost due to differences
in valuation:
⮚ People differ on how they value things
a. Spatial Dimensions:
⮚ May or may not value social effects
Ex. Research and development
b. Temporal Dimensions:
⮚ See value in future benefits
Ex. Insurance and smokers
Positive and Normative Economics:
Positive Economics – presents data and
answers what the current situation is
Normative Economics – prescription or
answers what should be done
SONA 2019
1. Salary Standardization Law for Teachers
and Nurses
⮚ He asks Congress to pass the Salary
Standardization Law which will raise
salaries for all national government
workers, including teachers and nurses.
2. Boracay Rehabilitation Plan
⮚ So I told the Agrarian Reform, go to the
place, have it inspected because I will
declare the whole of the island a land
 reform program. And I gave the islands
piece by piece to the Atis, the natives of
the place para walang masabi. Marami
kasi ginawa ko raw [applause] para
linisan ko, ibigay ko sa mga kaibigan ko.

3. Entry of the 3rd TELCO Provider

⮚ Do not worry about this. There is no
corruption at all. I guarantee you, upon
the grave of my father. I do not allow --- I
do not talk to them. I challenge this new
player to fulfill its commitment to provide
fast and reliable telecommunication
services to our people, especially in the
underserved areas.

4. Mandatory ROTC for Grades 11 and 12

⮚ We expect support for legislative
initiatives aimed at strengthening
defense-related systems such as the
proposed National Defense Act, the
Unified Military and Uniformed
Personnel Separation, Retirement, and
Pension Bill, and the revival of the
mandatory ROTC in Grades 11 and 12.
[applause] I think a military training
would be good for everybody. We are
aware of the fact that there are times in
AFP and PNP personnel, while in the
performance of their duties, get unjustly
sued. Providing them with free legal
assistance to help and boost their
morale