onomics as Applied Science Module 3

Lesson 3: The Philippine Socioeconomic

Development in the 21st Century

Essential Question:
Tamad nga ba ang mga Pilipino kaya sila marami sa kanila ay mahirap hanggang
ngayon?

Basic Economic Problems of Society

All societies are faced with basic questions in the economy that have to be
answered in order to cope with constraints and limitations. These are:

1. What to produce and how much -society must decide what goods and services
should be produced in the economy. Having decided on the nature of goods that
will be produced, the quantity of these goods should also be decided on.

2. How to produce -is a question on the production method that will be used to
produce the goods and services. This refers to the resource mix and technology
that will be applied in production.

3. For whom to produce - is about the market for the goods. For whom will the
goods and services be produced? The young or old, the male or female market,
the low-income or the high-income groups?

How these questions are answered depends on the nature of the economic system
in place. The economic system is the means by which society answers the basic
economic problems.

ECO105-Applied Economics
onomics as Applied Science Module 3

Economic Systems

The economic system is the means through which society determines the answers
to the basic economic problems mentioned. A country may be under any of the
following types or even a combination of the three economic systems.

1. Traditional Economy. Decisions are based on traditions and practices upheld

over the years and passed on from generation to generation. Methods are
stagnant and therefore not progressive. Traditional societies exist in primitive and
backward civilizations.

2. Command Economy. This is the authoritative system wherein decision-making

is centralized in the government or a planning committee. Decisions are imposed
on the people who do not have a say in what goods are to be produced. This
economy holds true in dictatorial, socialist, and communist nations.

3. Market Economy. This is the most democratic form of economic system. Based
on the workings of demand and supply, decisions are made on what goods and
services to produce. People’s preferences are reflected in the prices they are
willing to pay in the market and are therefore the basis of the producer’s
decisions on what goods to produce.

The 2030 Agenda for Sustainable Development, adopted by all United Nations Member
States in 2015, provides a shared blueprint for peace and prosperity for people and the
planet, now and into the future. At its heart are the 17 Sustainable Development Goals
(SDGs), which are an urgent call for action by all countries - developed and developing - in
a global partnership. They recognize that ending poverty and other deprivations must go
hand-in-hand with strategies that improve health and education, reduce inequality, and
spur economic growth – all while tackling climate change and working to preserve our
oceans and forests.

ECO105-Applied Economics