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Chapter. 7 Analysis of Demand

What is Demand?
-Demand is defined as the quantity of a commodity that a buyer is willing to purchase at alternative prices at a given point in time. There is demand for almost all commodities under the market system.

Demand Curve
-A Demand curve is a graphic representation of the relationship between the price of a commodity and the quantity of it demanded; other things being equal.

Elasticity of Demand
-The degree of responsiveness of the change in demand as a result of change in price, however, varies with several factors.

Consumer Behavior
-According to economists and consumers in general demand for goods and services because they derived utility from its consumption. By Utility, we mean a level of satisfaction or happiness.

Chapter.8 Analysis of Supply

What is Supply?
-Supply is the amount of goods and services which sellers are willing to sell or supply in the market at various alternative prices at a given point in time.

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The Supply Curve
-Supply Curve is a graphic representation of the relationship between the amounts which sellers are willing to supply the market with a particular commodity at various prices, other things held constant.

The Cost of Production
-The price of the inputs used in the production process. The basic factor inputs we will discuss in this section are labor, capital, land, and enterprise.

Opportunity Cost
-Deeply rooted in the basic assumptions of economics.

The production Function
-Is a technical relationship between inputs and output in a production process.

Price Elasticity of supply
-The amount of influence exerted by a change in price on a change in the quantity of goods supplied. Chapter.9 Market Equilibrium

Concept of Equilibrium
-The process of resolving the conflict in the diverging behavior of buyers and sellers in the market is a movement toward an equilibrium.

Market Equilibrium

-A condition in the market where the quantity demanded is equal to the quantity supplied.

3 Chapter.10 Market Structures

Perfect Competition
-refers to markets where no firm or consumer is large enough to affect the market price or output

Pure monopoly
-In direct contrast to a market where there is perfect competition is a market structure with a single producer or seller of a commodity or service.

Oligopoly
-is a market structure characterized by few sellers in a large market.

Monopolistic Competition
-a market structure wherein there are many sellers who are supplying goods that are slightly differentiated.

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Understanding Macroeconomics
Chapter.11 The Circular flow of Gods and Services This chapter has fall of flow. First flow is the Simple flow has two kinds of section households and firms interacting in two markets- a market for factors inputs and a market for commodities, or outputs. Households consist of individuals in an economy who owns the productive resources, including land, labor and capital. These resources but sell only their services in the input market. The households do not sell themselves but they only sell their labor services. Firms are directly involved in the production of goods and service. They do this by buying the services of the resources owned by households. The Difference is the Household is the seller and the Firm are the buyers. Savings and Investments in a circular flow. Households allow to use part of their income for non-consumption, or savings. The term savings is defined as income not used for current consumption.

Chapter.12 National Income Accounting This chapter discuss the circular flow of goods, services, and money, we were implicitly introduced to the various approaches in measuring economic activities and economic performance. We can measure these by these by the amount of goods and services produced in the output market. Since the value of these goods and services is equal to the cost of production, economic performance can also be measured by the factor payments made by firms and received by households as factor incomes. Value added refers to the additional contribution of the firm in transforming an intermediate product into a processes commodity. Industrial-origin approach this is similar to the value-added approach discuss earlier. Instead of summing up the value added of different firms the market value of the production of major industrial

sectors is added. The market value includes the value added of the sector, the indirect taxes set of subsides, and the capital consumption allowance for each 5 sector. Factor-income approach under this approach, we add all the income received by owners of resources for the services of their resources in the production process. Final expenditure approach another alternative in measuring the gross national product of an economy is to add all the expenditure of the end-users of the output produced in a given year.

Chapter 13 Simple Theory of Income Determination This chapter the concept of equilibrium discussed in this chapter is quite different from the market equilibrium discussed is chapter 9. Market equilibrium is the agreement between the producers and consumers of a particular commodity on the unit price and quantity to be produced and consumes. General equilibrium, In the other hand, is the agreement of all sectors(producers and consumers of all commodities)in the economy of the amount of total production and total demand. The simple theory of income determination was used to show how an economy attains general equilibrium. The condition for the attainment of the state of equilibrium was also discussing. The equality of savings and investment is critical in the attainment of this state of rest.

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Dimensions of the Philippine Economy

Chapter 14 The Agricultural Sector This chapter talks about Agriculture. Agriculture is defined as the science and art of crop and livestock production it covers plant and animal production.There are three major patterns of agricultural development: traditional agriculture, modernizing agriculture, and modern agriculture. Tradition agriculture is also known as subsistence farming. The second stage of agricultural development is the modernizing stage its main future is the increased importance of commercial production in farming .The third level of agricultural development is the modern agriculture stage. In this stage, agricultural processes are specialized and are characterized by a large portion of the product being produced for commercial purposes. The importance of agriculture in the economy is important because this is a developing country its size and its contributions to the economy. In the Philippines, it comprised 15.1% of the GDP as of 2001. Agriculture is important because it is the source of food.

Chapter 15 The Industrial Sector This Chapter talks about industrial Sector. The industrial sector is the part of the economy engaged in various economic activities, including manufacturing, mining and quarrying, construction, and the provision of public utilities. Manufacturing activities constitute the bulk of the industrial sector. Mining and quarrying is an important category of industries in the industrial sector. It is also known as the extractive industry because it is engaged in the extraction of precious metals and other minerals from the natural and mining resources of the country. Construction this category refers to the building of factories, commercial structures, and

residential buildings. The industrial sector is important for its contribution to the generation of income and employment and for its pivotal role in economic growth. 7

Chapter. 16

The Services Sector

The services sector comprises many sub-sectors including transportation, private services, government services, trade, finance, and many others. The importance of these sub-sectors in the economy lies in that they link industries, sectors, consumers, producers, and other economic actors through various transactions while pursuing their respective interest and objectives. Thus, an efficient services sector can transport good faster, transmit information quickly, facilitate transactions smoothly, reduce transactions costs, and provide services that enhance the expanding needs of consumers. On the other hand, an inefficient services sector implies that goods are delivered on time to the end-users, information is not properly transmitted, and the needs of consumers are not adequately answered. In effect, transactions among economic sectors and players are very costly that lead to the inefficient use of resources. There are many ways of improving the efficient of the services sector including the removal of monopoly power of some vested interest and opening the sector to other players including other local services providers and foreign players.

Chapter 17 The Public Sector The ability of the government to decide what goods and services to produce and supply to the general public varies with its capacity and efficiency to tax. Taxation is means to transferring purchasing power from the private sector to the public sector. The government can use the money it collects as taxes to provide public services (police protection, public parks, and national security for example), redistribute income, stabilize the economy, and promote economic growth. Meeting these responsibilities of the government requires a huge amount of resources that cannot be paid by tax revenues alone. To fill in the gap, the government can sell part

of its assets, borrow money from the public or from other countries, or print money, 8 Chapter 18 The Financial Sector The creation of money and financial intermediation are the two important roles played by the financial sector in making the economy work. Money as we have earlier shown, facilitates the transfer of goods and services between buyers and sellers. Since the commercial banking system actively participates in the creation of money, it helps to facilitate the millions of economics transactions in the society. Similarly, the efficiency of the financial sector in mobilizing savings in the economy and translating this into investment helps prevent possible disequilibrium. If savings were not translated into investments, the economy could only create limited employment opportunities which would result in a sluggish economic performance.

Chapter 19 Trading with Other Nations This Chapter talks about trading to other nations. Trade with other countries has both positive and negative consequences. On the plus side, it offers the benefits of specialization in production and higher levels of consumption. However, overdependence on trade may prevent the country from developing its industries. Too much dependence on foreign trade can also subject our country to the adverse effects of deteriorating terms of trade and the restrictive trade policies of our trading.

Chapter 20 Growth and Development In this chapter, we analyzed the significance of economic growth in the material survival of a society. The promotion of economic growth is an important objective of any society, but it is a difficult goal to attain. Certain conditions must be met to attain economic process. Both internal and external factors restrict many nations today in their earnest efforts to promote the growth of their economies.

Pilgrim Christian College Capistrano-Akut Sts., Cagayan De Oro City

The Project in Economics

Submitted To: Mrs. Eunie S. Dela Pena Economics Subject Teacher

Submitted By: Karl B. Lavisto 4th yr.Noah Student

Table of Contents

Part 2 the Market System
-Chapter 7 Analysis of Demand -------------------- 1 -Chapter 8 Analysis of Supply---------------------1-2 -Chapter 9 Market Equilibrium--------------------2 -Chapter 10 Market Structures--------------------3

Part 3 Understanding Macroeconomics
-Chapter 11 The Circular Flow of Goods and Services----4 -Chapter 12 National Income Accounting----------------4-5 -Chapter 13 Simple Theory of Income Determination--5

Part 4 Dimension of the Philippine Economy
-Chapter 14 The Agricultural Sector----------------6 -Chapter 15 The Industrial Sector-------------------6 -Chapter 16 The Services Sector---------------------7 -Chapter 17 The Public Sector------------------------7 -Chapter 18 The Financial Sector-------------------8

-Chapter 19 Trading with other Nations-----------8 -Chapter 20 Growth and Development-------------8

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