Even if a suitable alternative cannot be found, no one
forces the consumer to pay a certain price for a product
PRICES OF BASIC COMMODITIES
PRICES - is the amount of money expected, required,
or given in payment for something.
COMMODITY is a basic good used in commerce that
is interchangeable with other commodities of the same
type; commodities are most often used as inputs in the
production of other goods or services. The quality of a
given commodity may differ slightly, but it is
essentially uniform across producers.
NEUTRAL
 If the market is less competitive, prices tend to favor
some groups more than the others.
 They favor neither the consumer nor the producer.
 They are a result of competition between buyers and
sellers.
 The more competitive the market, the more efficient
the price adjustment process.
FLEXIBLE
 Unforeseen events such as weather, strikes, natural
disasters, and even wars affect the prices for many
items.
 Buyers and sellers react to the new level of prices
and adjust their consumption and production
accordingly.
 Price flexibility also allows the market economy to
accommodate change.
Price Flexibility. The computer on the left is an older
model. The computer on the right is a newer model. If
the prices for both computers were adjusted for inflation,
the earlier model would cost more.
Why do you think this is so?
FREEDOM OF CHOICE
Because a market economy typically provides a variety
of products at a wide range of prices, consumers have
many choices available to them.
If the price is too high, a lower-priced product can
usually be found.
in a competitive market economy.
No Administrative Cost
 Competitive markets tend to find their own prices
without outside help or interference.
 No bureaucrats need to be hired, no committees
formed, no laws passed, or other decisions made.
 Even when prices adjust from one level to another,
the change is usually so gradual that people hardly
notice.
EFFICIENT
 Prices are efficient because they are easily
understood by everyone. This allows people to make
decisions quickly and efficiently, with a minimum of
time and effort.
 This allows people to make decisions quickly and
efficiently, with a minimum of time and effort.
 Prices are even used to influence driving behavior.
LABOR AND WAGES
CATEGORIES OF LABOR
The four major categories of labor are based on the
general level of skills needed to do a particular kind of
job.
UNSKILLED LABOR
 Workers who lack the training to operate specialized
machines and equipment.
SEMI-SKILLED LABOR
 Workers with mechanical abilities.
SKILLED LABOR
 Workers who are able to operate complex equipment
and who can do their tasks with little supervision
belong to the category.
PROFESSIONAL LABOR
 Workers with higher-level skills, such as doctors,
teachers, lawyers, and executives of large
companies, comprise the category.
LABOR
NONCOMPETING LABOR GRADES
COST OF EDUCATION AND TRAINING
 Cost is one of the more difficult barriers to
advancement. Some individuals have the ability
and initiative to obtain additional technical skills,
but they may not have the money to pay for the
training. Many students have the aptitude to
become college professors, but they lack the
 resources needed for four to six years of post-
college study.
LACK OF OPPORTUNITY
 Some people may live in areas where additional
training and education are not available. Others
may have the resources and grades to get into a
specialized program such as medical school, but
still may not be able to enter because the nearby
schools have limited openings.
LACK OF INITIATIVE
 Although they know that more skills are needed to
get a better job, other individuals lack the initiative
to get ahead. These people may never acquire
additional training or education because they are not
willing to put forth the extra effort.
FACT
 In the Philippines, the daily wage ranges from P 250
to P 481, depending upon the area.
 This amount is liable to impose tax and other
required deductions (SSS, Philhealth, and so forth.).
 With low compensation ranges, it's no big surprise
why a huge number of Filipinos work abroad where
the compensation is ideal to accommodate their
families.
Wage Determination
WAGE RATE – a standard amount of pay given for
work performed.
Differences in wage rates can be explained in two
ways.

1. traditional tools of supply and demand

2. influence of unions in the bargaining process

TRADITIONAL THEORY
OF WAGES

Professional managers and

athletes, for example, are
FACT
generally more scarce than
ditchdiggers or fruit pickers
and are more valuable to their
employees.

THEORY OF NEGOTIATED
WAGES

Unions, for example, may get

higher wages for their members,
The top 10 countries with the highest minimum wage
but not always because labor is in
short supply relative to the
demand.
Minimum Wage

 P426 per day

Overtime pay

 25% premium on hourly rate

Night shift differential if work between 10:00 pm to

6:00 am

 10% premium on hourly rate

13th Month Pay (after 1 month of service)

 1/12 of the total basic salary earned by an employee

within a calendar year

Special Non-Working Day

 30% premium if worked

Regular Holiday Pay

 100% premium if worked, paid if unworked

Service Incentive Leave

 5 days after 1 year of service

Maternity Leave

 Daily Maternity Benefit Equivalent to one 100% of

her average salary credit for 60 days or 78 hours

Paternity Leave

 7 days leave with pay (married only)

Parental Leave for Solo Parents

 7 days leave with pay

CONTRIBUTIONS

Social Security System Contribution

PAG-IBIG Contribution

PHILHEALTH Contribution