________________________________________________________

Economy

oikonomos (Greek) - one who manages a household

households and economies (commonality) - decision-making

Scarcity

limited nature of society's resources

society has limited resources

Law of Scarcity

resources are limited for the unlimited wants of man

- time as the most limited universal resource

- without scarcity, studying economic would be useless

Branches of Economics

1) Microeconomics

2) Macroeconomics

- aggregate/combined perspective

Scientific Methods of Economics

1) Data Gathering

2) Economic Analysis

3) Economic Conclusions

Economics as a Science

a) Social Science

deals with controlled variables

concerned with the efficiency and effective allocation of resources

b) Applied Science

applying economic principles and theories to real-life situations

Methodologies of Economics

1) Positive Economics

positive statements claim that attempt to describe the world as it is - factual

minimum wage laws cause unemployment - may ibang options

2) Normative Economics

claim that attempt to prescribe how the world should be - subjective, interpretation of facts

the government should raise the minimum wage

Economics

study of how society manages its scarce resources

studying economics because resources are scarce

Economists

expert of a scholar of economics

a) how people make decisions

b) how much they work

c) what they buy

d) how much they save

e) how they invest their savings

also study human interaction

examines a buyer and seller goods (supply-demand relationship)

analyze the forces and trends that affect the economy as a whole

a) growth in average income

b) fraction of the population (unemployed)

c) inflation
________________________________________________________

Mankiw's 10 Principles of Microeconomics

Part I: How People Make Decisions (Individual)

economy - group of people dealing with anoteher

1. People face trade-offs

getting something we like means giving up something (e.g., leisure time vs. work)

sacrificial - trading off one goal against the other

necessities vs. family vacation

Guns and Butter trade-off - more society relies on the military (guns) than consumer goods (butter) to
raise the standard of living

Efficiency vs. Equality

Efficiency - property of society getting the most it can from its scarce resources (getting the maximum
benefits); size of the economic pie

Equality - property of distributing economic prosperity uniformly among the members of the society;
how the pie is divided

Sir Jimenez's additionals:

there is no such thing as free lunch - every action has a corresponding consequence

2. The cost of something is what you give up to get it

Trade-offs + decision-making - require weighing costs and benefits in alternating events (cost of action is
not always visible)

Opportunity Cost
Whatever must be given up to obtain some item

3. Rational People think at the margin

People are rational

Rational people - systematically and purposefully do the best they can to achieve their objectives

Marginal change - small incremental adjustment to a plan of action

margin = edge; thus, marginal changes are adjustments around the edges of what people are doing

Water - cheap

Diamonds - unnecessary

Yet, people are willing to pay much more for a diamond than for a cup of water

4. People respond to incentives

Incentives - some that induce a person to act (prospects of punishment or reward)

Incentives are key to analyzing how markets work

- when the price of an apple rises, people decide to eat fewer apples. at the same time, apple orchards
decide to hire more workers and farm more apples

Higher market price = providing incentive for buyers to consume less and an incentive for sellers to
produce more

Influence of prices on the behavior of the consumers and producers is crucial to how a market economy
allocates scarce resources

Eg.

A gasoline tax may encourage people to drive smaller, more fuel-efficient cars

A higher gasoline tax diverts people to carpool, take public transportation and live closer to where they
work
policymakers fail to consider how their policies affect incentives = unintended consequences

Sir Jimenez's additionals:

Cost vs. Benefits

Theory X and Theory Y

Theory X - importance of heightened supervision, external rewards, and penalties

Theory Y - motivating role of job satisfaction and encourages workers to approach tasks without direct
supervision

________________________________________________________

II. How People Interact (Interaction)

5. Trade can make everyone better off

Trade between countries is making each country better off

a) trade affecting families = when looking for job, it competes with the members of another family who
are also looking for a job

b) each family is an economy competing with all other families

c) despite this competition, a family is not better off isolating itself from other families

Trade allows each person to specialize in the activities it does best; trading = offering a great variety of
goods and services at a lower and more beneficial cost

Countries benefit from the ability to trade with one another

- allowing countries to foster what they do best or are known for, for a variety of goods and services

Sir Jimenez's additionals:

Three (3) basic economic questions:

1) what to produce?

2) how to produce it?

3) how much to produce?

Concept of competition:

good because sellers will become more creative and bring quality products to consumers

too much competition and saturation of the market will lessen advantages of the sellers

trade does not have to be tangible

6. Markets are usually a good way to organize economic activity

Soviet Union + Eastern Europe (collapse in late 1980s) - one of the most transformative events

- communist countries = believed that the government officials are in the best position to allocate the
economy's scarce resources

- central planners = decide what goods and services were produced, how much was produced, and who
produced

- theory explores that the government could only organize an economy in a way that promoted
economic well-being for the country as a whole

Market economy

- economy that allocates resources through the decentralized decisions of many firms and households as
they interact in markets for goods and services

- decisions of a central planners are replaced by the decisions of millions of firms and households

- no one is looking out for the economic well-being of society as a whole

Firms - decide who to hire and what to make

Households - decide who to work + where to spend incomes

These two - interact in the marketplace, where prices and self-interest guide their decisions

Sir Jimenez's additionals:

Categories (Economic System)

traditional (barter change)

command (central planning, bordering utilitarianism)

market (you get to choose, invisible hands - individual decisions trickles down to the benefit of the
whole (mas anchored on capitalism)

mixed

7. Government can sometimes improve market outcomes

Necessity of a government - the invisible hand can work its magic only if the government enforces the
rules and maintains the institutions that are key to a market economy

Property Rights - ability of an individal to own and exercise and control scarce resources

- market economies - need institutions to enforce property rights so individuals can own and control
scarce resources

a) farmers will not grow foos if it expects food to be stolen

b) a restaurant will not serve meals unless assures their customers will pay before leaving

c) film company will not make movies if the customers are illegally producing copies

The Goal of Efficiency - invisible hand usually leads markets to allocate resources to maximize the size of
the economic pie

Market Failure - market left on its own fails to allocate resources efficiently

Externality - impact on one person's action on the well-being of a bystander

Ex. pollution

a) when the production of goods pollute the air and create health problems, market left to its own
devices may fail to take this cost into account

Market Power - another possible cause of market failure is market power; ability of a single economic
actor to have a substantial influence on market prices

The Goal of Equality - even when the invisible hand yields efficient outcomes, it can leave disparities in
economic well-beng

a market economy rewards people according to their ability to produce things that other people are
willing to pay
inequality may depend on one's political philosophy (invisible hand does not ensure everyone has
sufficient food, decent clothing, and adequate health care)

Sir Jimenez's additionals:

Merit Good

Market Power

Concentrated

- influence of a firm to the economy

Market Failure

Information Asymmetry

- hindi husto ang information to triumph an economic policy

Concentrated Market Power

- a certain group of power will only decide for the economy (e.g., monopolies)

Public Good

- produkto on non-rival, it does not prohibit consumption when you consume it

- non-excludable (others cannot be prevented from using it)

- free rider problem

Externality

- positive externality

decisions/transactions that has positive effect to people

- negative externality

decisions/transactions that has negative effect

damage is not fully compensated

________________________________________________________

III. How the economy as a whole works

8. A country's standard of living depends on its ability to produce goods and services

Changing in living standards are large = attributable to differences in the country's productivity

Productivity - number of goods and services produced by each unit of labor input

Nation where workers produce a large number of goods and services hourly = higher standard of living

less productivity = more meager existence

GDP vs. GNP

GDP - Gawa Dito sa Pilipinas

kasama ang kita ng foreigner based on the Philippines

mas common gamitin to determine the economy

nasusukat gamit ang expenditure approach

GNP - Gawa Ng Pilipino

remittances of OFWs

9. Prices Rise when the governmenr prints too much money

concept of inflation - when everybody can have it, its value decrease

overall price increase

Mickey Mouse Money - still has value

Inflation - increase in overall level of prices in the economy

eg. January 1921 - Germany's newspaper = 0.30 marks

less than two years - 70,000,000 marks

Gerald Ford - inflation is "public enemy number one"

Inflation (21st century's 1st decade) - 2.5% per year (may take 30 years for prices to double)

government regulates inflation (keeping it at a low level as a goal of economic policy)

caused by a large quantity of money

- government producing large quantities of money = value falls

- prices doubling at a certain period, quantities of money are doubled as well

10. Society faces a short-run trade-off between inflation and unemployment

short-run is much more complex and controversial

a) increasing amount of money in the economy stimulates the overall level of spending and thus the
demand for goods and services

b) higher demand = firms raising prices, but also encourages them to hire more workers and produce a
larger quantity of goods and services

c) more hiring = lower unemployment

increase - printing of money

increase - money supply

decrease - purchasing power of peso

increase - inflation

increase - minimum wage

increase - take home pay

increase - money supply (to suffice increase in minimum wage)

decrease - purchasing power of peso

increase - inflation

decrease - employment

increase – unemployment
Law of Supply and Demand

Market

- group of buyers and sellers meet

Competitive Market

- there are as many buyers and sellers so that each has a negligible impact on market price

- mas formal

- competition sa side ng benta at bili

Perfectly Competitive Markets

- goods being offered are all the same

- buyers and sellers are so numerous that no single buyer or seller can influence the market price

- palengke (produkto ay homogeneous)

4 things to consider

1) number of sellers

2) number of buyers

3) influence on price

4) product

PCM

1) many

2) many

3) none

4) homogenous

Monopoly

1) one
2) many

3) seller

4) homogenous

Oligopoly

1) few

2) many

3) seller

4) homogenous

Common: cartel (kapag nagtaas ang Petron, magtataas din iyong Shell at Caltex)

Monopsony

1) many

2) one

3) buyer

4) homogenous

Grid lines to Meralco (monopsony) - Meralco is a buyer

Oligopsony

1) many

2) few

3) buyer

4) homogenous

Monopolistically competitive

1) many

2) many

3) seller

4) heterogenous (slightly different) - hal. toothpaste na iba iba

Quantity Demanded

- amoung of a good that buyers are willing and able to purchase

Law of Demand

- claim that the quantity demanded of a good falls when the price of the good rises

Ceteris paribus

- all things equal

X - quantity demanded (dependent)

Y - price (independent)

Demand Schedule

- table that shows the relationship between the price of a good and the quantity demanded

Determinants of Demand

1) Income

2) Prices of Related Goods

3) Tastes and Preferences

4) Expectations

5) Number of Buyers

Income

Types of Goods

Normal Goods - good for which an increase in income leads to an increase in demand

Inferior Good - increase in income leads to a decrease in demand

Ex.
Mang Boy - bumibili ng 555 Tuna, tumaas ang sweldo

Effect: bumili ng mackerel (normal goods), medyo hindi na binibili ang tuna (inferior good)

Prices of Related Goods

Substitutes - two goods for which an increase in the price of one leads to increase in the demand for the
other

Complements - two goods for which an increase in the price of one leads to a decrease in the demand
for the other

Quantity Supplied

- amount of a godo that sellers are willing and able to sell

Law of Supply

- quantity supplied of a good rises when the price of the good rises

Supply Schedule

- relationship between the price of a good and the quantity supplied

For Midterm Examination

Microeconomics Examination - Notes

Ten Principles of Economics

Economy - Greek word oikonomos (one who manages a household)

Why household?

- because it faces many decisions

- like a household, a society faces many decisions

a. it needs people to grow food, other people to make clothing, and still others to design computer
software

- once society has allocated people to various jobs, it must also allocate the goods and services they
produce

Scarcity

- management of society's resources is important because resources are scarce

- it means that society has limited resources and therefore cannot produce all the goods and services
people wish to have

Economics

- study of how society manages its scarce resources

- resources are allocated not by an all-powerful dictator but through the combined choices of millions of
households and firms

Economist

- study how people make decisions

a. how much they work

b. what they buy

c. how much they save

d. how they invest their savings

- also study how people interact with one another

- they examine the multitude of buyers and sellers of a good together determine the price at which the
good is sold and the quantity that is sold

- analyze the forces and trends that affect the economy as a whole, including the growth in average
income, the fraction of the population that cannot find work, and the rate at which prices are rising

Ten Principles of Economics

Principle I: People Face Trade-offs

- there ain't no such thing as a free lunch

ex.

student (must decide how to allocate her most valuable resource - her time)

alloting time to studying and leisure/napping - she must give up an hour she could have spent napping
and others in order to finish her studies

Example: Guns and butter - a classic trade-off

- the more a society spends on national defense (guns), the less it can spend on consumer goods (butter)
to raise the standard of living at home

Another ex: clean environment vs high income

Another trade-off

Efficiency vs Equality

Efficiency - society is getting the maximum benefits from its scarce resources; size of the economic pie

Equality - benefits are distributed uniformly among society's members; how the pie is divided into
individual slices

Principle II: The Cost of Something is What you Give Up to Get it

- making decisions requires comparing the costs and benefits of alternative courses of action

Going to college

Benefits - intellectual enrichment + lifetime of better job opportunities

Costs - we think of expenses

Problems - it includes some things that are not really costs of attending college, even you quit school
you need a place to sleep and food to eat

The real cost - time, instead of studying why not seek for a job to earn money

Opportunity cost

- whatever must be given up to obtain some item

Principle III: Rational People think at the margin

Rational people

- systematically and purposefully do the best they can to achieve their objectives, given the available
opportunities

- know that decisions in life are rarely black and white but usually involve shades of gray

Marginal change

- small incremental adjustment to an existing plan of action; adjustments around the edges of what you
are doing

Margin - edge

Principle IV: People Respond to Incentives

Incentive - something that induces a person to act; play a central role in economics; key to analyzing
how markets work

Ex.

Higher price - incentive for buyers to consume less and an incentive for sellers to produce more
Tax on gasoline - encourages people to drive smaller, more fuel-efficient cars; or carpooling, taking
public transportation, and live closer to their workplace

Principle V: Trade can make everyone better off

Trade

- allows each person to specialize in the activities she does best, whether it is farming, sewing, or home
building

- people can buy a greater variety of goods and services at lower cost

- allows countries to specialize in what they do best and to enjoy a greater variety of goods and services

Principle VI: Markets are usually a good way to organize economic activity

Market economy

- economy that allocates resources through the decentralized decisions of many firms and households as
they interact in markets for goods and services

- decisions of a central planners are replaced by the decisions of millions of firms and households

- have proven remarkably successful in organizing economic activity to promote overall economic well-
being

Firms - decide whom to hire and what to make

Households - decide which firms to work and what to buy with their incomes

Free markets

- contain many buyers and sellers of numerous goods and services, and all of them are interested
primarily in their own well-being

An Inquiry into the Nature and Causes of the Wealth of Nations (Adam Smith's 1776 book)

- households and firms interacting in markets act as if they are guided by an "invisible hand" that leads
them to desirable market outcomes

Principle VII: Government can sometimes improve market outcomes

Property rights

- ability of an individual to own and exercise control over scarce resources

Market failure

- a situation in which a market left on its own fails to allocate resources efficiently

Externality

- impact of one person's actions on the well-being of a bystander

Market power

- ability of a single person of firm (or small group) to unduly influence market prices

Ex.

If everyone in town needs water but there is only one well, the owner of the well is not subject to the
rigorous competiton with which the invisible hand normally keeps self-interest in check; she may take
advantage of this opportunity by restricting the output of water so she can charge a higher price

Principle VIII: A country's standard of living depends on its ability to produce goods and services

Productivity

- amount/quantity of goods and services produced from each unit of labor input

- growth rate of nation's productivity = growth rate of average income

Nations where workers can produce a large quantity of good and services per hour = high standard of
living (kabaliktaran sa mababa ang quantity)

Principle IX: Prices rise when the government prints too much money

Inflation
- increase in the overall level of prices in the economy

- economic problem

- Gerald Ford: called it public enemy number one

Germany

January 1921 - daily newspaper = 0.30 marks

November 1922 - 70,000,000 marks

What causes inflation?

- when a government creates large quantities of nation's money, the value of money falls

Principle X: Society faces a short-run trade-off between Inflation and Unemployment

Higher level of prices (primary effect of increasing the quantity of money)

a. increasing amount of money = overall level of spending = increasing demand for goods and services

b. higher demand = firms raising prices, but also encourages them to hire more workers and produce a
large quantity of goods and services

c. more hiring = lower unemployment

Business cycle

- fluctuations in economic activity, such as employment and production; irregular and largely
unpredictable fluctuations in economic activity, as measureed by the production of goods and services
or the number of people employed
EXAM ULTRA COVERAGE
Microeconomics Notes

Definition and Etymology

Economics - alamin kung paano ang pag-allocate ng resources, gaano karami sa ganito o para roon;
nagsisimula sa family - smallest unit

Oikonomia - oikos (household)

Bakit naka-anchor sa pamilya iyong konsepto? - kasi it requires decision-making

Law of Scarcity

- resources are limited for the unlimited wants of man

Ex. cravings - we have plans for today

Most limited resource - time (it cannot be more than or less than 24 hours)

Scientific Methods of Economics

1) Data Gathering

2) Economic Analysis

3) Economic Conclusions

Economical - mahigpit sa pera, efficient

Economic - rightful adjective

Economics as a Science

Social Science

- uncontrolled variables

- concerned with the effiicent and effective allocation of resources

Applied Science
- application of economic principles and theories to real-life situations

Efficiency rate - input divided by output

Methodologies

1. Positive Economics - claims that attempt to describe the world as it is; BASED ON FACTS

2. Normative Economics - claims that attempt to prescribe how the world should be; SUGGESTIONS,
INTERPRETATION

Principle # 1

People Face Tradeoffs

"there is no such thing as free lunch"

- he may not have paid, pero iyong time na mawawala is considerable for it (may nage-gain or may
nawawala)

what is tradeoff

efficiency vs equity

efficient - kapag dinivide sa tatlo equally iyong 9 tons

equity - based on needs, it become equitable (kung ilan iyong tao sa bahay na nangangailangan)

Principke # 7

- tandaan ang word na sometimes

Merit Good

- product/service/anything that the government imposes on the people because they think that it's good
for them

ex. specific law imposed kasi akala nila tama ito - seatbelt law (requires people na nasa harap ng kotse to
wear seatbelts - questions? what do you think was the effect of seatbelt law on vehicular accidents -
naging more secured - naging aggressive - dumami ang vehicular accidents - walang kwenta ang batas
Market Power

- influence of a firm/individual to affect the economy

- paraan para maapektuhan? - prices - Putin has market power - look what happened because of his
geopolitical decisions

oil - sinigang na baboy epekto - tataas kasi lahat ng presyo

Market Failure

- it's when an economy left on its own fails

ex. Zimbabwe - hyperinflation (masyadong maraming umiikot na salapi - bababa ang halaga ng pera)

Externality

- actions of one person/firm/organization affects the economy of a bystander

Four types of market failure:

1) information assymetry - high markets require high levels of transparency and free flow of information
= magandang takbo ng ekonomiya

ex. balik sa seatbelt law - hindi husto ang impormasyon na alam nila upang magtagumpay ang polisiyang
proposed nila - kulang = failure

2) Public Good - produkto o serbisyo na non-rival (pwede pang gamitin ng iba kapag nagamit mo na -
example: panonood ng series sa Netflix or pagdaan sa kalsada); it's non-excludable (others cannot be
prevented from using it)

FREE RIDER PROBLEM - pabuhat; free loaders; an inefficient distribution of goods or services that occurs
when some individuals are allowed to consume more than their fair share of the shared resource or pay
less than their fair share of the costs.

Positive Externality - transaction na maganda ang epekto sa kapwa

Negative Externality - transaction na hindi maganda ang epekto sa kapwa (mag-emit ng smoke iyong
industries = pollution)

Principle # 8
Productivity

GDP vs. GNP

GDP (Gawa dito sa Pilipinas)

- lahat ng outputs sa loob ng teritoryo ng Pilipinas regardless kung foreigner (alien); kung kumita dito
iyong Amerikano na may BPO office sa Pilipinas, parte ito ng GDP

GNP (Gawa ng Pilipino)

- suma ng outputs ng Pilipino regardless kung nasaan sila (remittances, OFW na padala, luxury bags na
ipapadala dito tas ibebenta)

Principle # 9

Inflation - printing too much money = bumagsak ang halaga

Principle # 10

Phillips Curve - inflation and unemployment have an inverse relationship. Higher inflation is associated
with lower unemployment and vice versa.

Mickey Mouse Money - may value pa rin naman pero mababa

Monopoly

Meralco is the seller - power distribution (magpakalat ng kuryente)

Monopsony

Meralco is the buyer sa independent power producer (Meralco as the sole buyer)

Monopolistically competitive market

many sellers

many buyers

influence on price is none

product is heterogeneous (slighty different)

Economics with Land Reform and Taxation

Microeconomics - halimbawa ay ang pang-araw-araw na sitwasyon na kailangan ng decisions

Microeconomic Question

Go the business school or take a job?

What determines the salary offered by a company?

Macroeconomics - pangmalawakan

Macroeconomic Question

How many people are employed in the economy as a whole?

What determines the overall salary levels paid to workers in companies of similar industry?

Law of Scarcity - resources are limited for the unlimited wants of man

Opportunity cost - the cost of something that you give up to get another thing

Utility - the measure of satisfaction (hanggat hindi pa satisfied, hala sige kuha lang lechon)

Saturation point - kapag naumay na sa pagkuha ng lechon (law of diminishing marginal utility) - upon
reaching the saturation point, kaligayahan ay bababa

Market - a place where buyers and sellers meet

Types (Economic System)

Traditional - paniniwala ay base sa tradisyon o customs (hal. nasa bundok na kapatid, namumuhay sa
palitan ng mga prutas o hayop)

Command - may central planner (nagpapatakbo ng mga bagay-bagay; mapagdikta connected sa

utilitarianism - tinatrato ng gobyerno ang mamamayan na resource na kanyang dinidiktahan) ex.
bansang komunista - dinidikta kung ano ang maaaring pag-aari at ialok
Market - free to decide what to buy and sell (ex. Philippines)

Mixed - more than one economic system existing in an area

Types (Market)

Competitive - maraming buyers and sellers; walang may impluwensya sa presyo (kasi maraming buyers-
sellers); produkto ay homogenous

Monopoly - mono/isa = isa ang nagbebenta but many buyers; seller is influential on price (ex. Meralco);
homogenous

Oligopoly - few sellers/many buyers; sellers ang influential (Petron-Caltex-Shell - influence on gas)

Principles

1 - people face trade offs

2 - markets are usually a good way to organize economic activity

3 - government can sometimes improve market outcomes

4 - a country's standard of living depends on its ability to produce goods and services

5- prices rise when the government prints too much money

6- market equilibrium may be impossible

Privatization

- involves the transfer of a natural monopoly to public hands (e.g., electricity) or the introduction or
private services to public sector (e.g., private contractors providing janitors to government hospitals)

- mas gumaganda ang services and goods

- pwede ang PPP (Public-Private Partnerships) - tulungan sa dalawa para magkaroon ng undertaking na
makabubuti sa lipunan

Deregulation

- involves the removal of monopoly rights (e.g., oil deregulation)

- address the issue of cartel

- pagbibigay incentive sa industriya upang pagyabungin ang kanilang industriya

Deflation

- bumababa ng mga presyo ng bilihin

- hindi kaaway ang inflation (kasi indikasyon na ang ekonomiya ay gumagalaw; kailangan lang kontrolin)

Inflation targeting - pag-estima sa inflation per quarter

Hyperinflation

- walang eksaktong %

- katanggap-tangap: 50%

Law of supply

- when the price of the good increases, the quantity supplied of that good increases

- also determiend by input price, expectations, number of sellers

- mas mataas ang presyo, mas maraming gusto magbenta kas dami kita

- relationship: price and quantity supplied: direct or positive (tataas ang presyo, taas supply; same as
baba-baba)

Input price - presyo ng raw materials; kapag tumaas ang presyo ng asukal, maaaring kumonti ang
pandesal na magagamit (increase in input price = decrease in quantity supplied)

Hoarding - bawal sa batas; hindi muna ibebenta ang bigas kapag may darating na bagyo (future price -
increases; quantity supplied - decreases)

Law of demand

- when the price of the good increases, the quantity demanded of that good decreases

- also determined by income, price of related goods, expectation, number of buyers

Inverse - opposite (nagmahal presyo, kakaunti bibili; pag may sale, dami bibili quantity demanded -
tataas)

Income - tumataas income = normal good (tumaas kita, "uy ito na ang bibili ko kaysa dito"); inferior
good (ito iyong binitawan) (Mang A - dating janitor madalas ulam sardinas; naging waiter tumaas sahod;
imbes na sardinas, naging corned beef) = tumaas ang income = corned beef (normal good); sardinas
(inferior good)

Price of related good

Complemence - dalawang produkto ay magkasama (kape-creamer) kapag nagmahal ng presyo ng kape;
hindi na bibili kape tas bababa ang quantity demanded ng creamer

Substitute - tapsilog at tocilog (lilipat kasi nagmahal ang tapsilog; increase in price in one good; increase
in quantity demanded sa other good)

Expectation

- a decrease in future price leads to a decrease of quantity demanded; kapag mamaya o bukas na ang
taas-presyo; tataas na ang quantity demanded (hal. sa gas) - it's all about timing

Mas marami mamimili - marami quantity demanded

Market equilibrium

- situation in which the price has reached the level where quantity supplied equals the quantity
demanded

Agrarian Reform in the Philippines

Agriculture Age

- mayayaman ay haciendero

- mahihirap ay farmers

Industrial Age

- noong dumating ang Thomasites, nagkaroon ng professional work

- lupain dati na sinasaka, nawala

- propesyon ay napunta sa kapital (hal. Metro Manila)

Information Age

- kahit nasaan ka man, maaari kang kumita or access sa additional info

Comprehensive Agrarian Reform Program (CARP)

- agrarian reform law in the PH based on the Comprehensive Agrarian Reform Law (CARL) or RA 6657
outlined by Pres. Cory Aquino in 1987. Schedule of implementatin = 10 years from its effectivity

- hindi masyadong napaigting

Pres. Gloria time

- amended in 2009

- Comprehensive Agrarian Reform Program Extension with Reforms (CARPER) or RA 9700

- purpose - extend its implementation for an additional 5 years

Agrarian Reform

- aka Land Reform

- redistribution of lands, regardless of crops or fruits produced, to farmers and regular farmworkers who
are landless, irrespective of tenurial arrangement, to include the totality of factors and support services
designed to lift the economic status of the beneficiaries and all other arrangements alternative to the
physical redistribution of lands (production or profit-sharing, labor administration, distribution of shares
of stocks) - allowing beneficiaries to receive a just share of the fruits of the lands

Includes

- all agricultural lands alienable and disposable in the public domain (thosw agri lands now reclassified
from mineral and forest lands, private lands devoted to agri, and other lands owned by the govt suitable
to agri)

Excludes

mineral and forest lands

Retention limits

no person may own or retain, directly or indirectly, any public or private agri land exceeding five (5)
hectares

Three (3) hectares - may be awarded to each child of the landowner

a. he is at least 15 years old

b. actually tilling the land or managing the farm

Department of Agrarian Reform (DAR) - govt agency charged with the implementation of ARP of the
govt of private lands

DENR - public lands naman

Taxation

Tax vs. Taxation

Tax - amount of required contributions from the persons and property charged by the government to
sustain the needs of its territory

Taxation - inherent power to tax brought about by the gov't's law

Purposes - raise revenue for the gov't, to move for the equitable distribution of wealth

Principles and Theories

1) Benefit Principle - sino nakakatanggap ng benepisyo ay mas dapat magbayad ng buwis; hindi pwede
ito kasi mahihirap ang beneficiaries eh

2) Ability-to-Pay Principle - most likely adopted, mas malaki kita mas malaki buwis

3) Equal-distribution Principle - may not be applicable to country; distribution of income kasi is not equal

Types

Income Tax - binubuwis sa atin, binabawas sa kita

Business Tax - specifically sa business

Transfer Tax

1) naglipat ng ari-arian kapag a) buhay or b) patay

a) donor's tax - buhay

b) estate tax - patay

Tax Structures/Systems

1) Proportional - pare-pareho % regardless kung magkano ang binili (VAT 12%)

2) Regressive - sa mayayamang bansa, mas mababa ang % ng buwis (incentive ito sa mayayaman)
3) Progressive - habang lumalaki kita, laki tax (250000 below walang tax); ITO SA PILIPINAS

Tax System (Sound ba? Tama ba ang paraan?)

Fiscal Adequacy - sapat ba ang nakokolekta?

Equality or Theoretical Justice - patas ba ang nakukuha sa mga mamamayan?

Administrative Feasibility - tama ba at maayos ang koleksyon?

Consistency or Compatibility with Econ goals - naaayon ba sa plano ng govt?

Escape from Tax

Shifting - paglipat (Jollibee - nakasama na ang VAT na dapat bayaran sa iyong binili)

Capitalization - manufactured goods (sinasama na presyo ng raw materials iyong buwis na dapat
bayaran)

Tax Exemption - legal; bawat isa may exemption

Tax Avoidance - legal; may accounting equation formula to lower tax

Tax Evasion - illegal, hindi nagdeklara ng 30% ng income o hindi nagbayad ng 30% ng due taxes