ECONOMIC INSTITUTION

- is a social institution organized around

production, consumption and distribution
of goods and services.
 NON-MARKET
INSTITUTION

- No exchange of cash for provisions of

goods and rendered services
 NON-MARKET INSTITUTION
TRANSACTIONS

A. Reciprocity
B. Transfer
C. Redistribution
 RECIPROCITY
NON-MARKET
INSTITUTION
TRANSACTIONS

- refers to voluntary giving or taking of

objects without the use of money that in
the future in can be reciprocated.
 RECIPROCITY
NON-MARKET
INSTITUTION
TRANSACTIONS

 barter
 hospitality
 gift-giving
 sharing
 RECIPROCITY
NON-MARKET
INSTITUTION
TRANSACTIONS
 RECIPROCITY
NON-MARKET
INSTITUTION
TRANSACTIONS

Utang na Loob
-is an act of kindness or favor that is
expected to given in return
 RECIPROCITY
NON-MARKET
INSTITUTION
TRANSACTIONS

Forms of Reciprocity by Marshall Sahlins

1. Generalized
2. Balanced
3. Negative
 NON-MARKET
RECIPROCITY
INSTITUTION
TRANSACTIONS Forms of Reciprocity

1. Generalized
-refers to the exchange of goods and
services without a definite time frame of
when a favor should be returned.
 NON-MARKET
RECIPROCITY
INSTITUTION
TRANSACTIONS Forms of Reciprocity

2. Balanced Reciprocity
-the exchange occurs between groups or
individuals with the donor expecting to
receive something of equal or similar value.
 NON-MARKET
RECIPROCITY
INSTITUTION
TRANSACTIONS Forms of Reciprocity

2.Balanced
Reciprocity
 NON-MARKET
RECIPROCITY
INSTITUTION
TRANSACTIONS Forms of Reciprocity

3. Negative Reciprocity
-this happen when the groups try to maximize
their gains while giving as little as possible.
-they are motivated by the desire to acquire a
large number of goods using minimal resources
 B. TRANSFER
NON-MARKET
INSTITUTION
TRANSACTIONS

-a redistribution of income that is not by

actual exchange of goods and services.
 B. TRANSFER
NON-MARKET
INSTITUTION
TRANSACTIONS

Ex.donation or financial assistance from

rich relative or farm subsidies by the
government
-Transfer of productive assets due to inheritance could quality as transfer
payments
 NON-MARKET
INSTITUTION
TRANSACTIONS C. REDISTRIBUTION
-it occurs when individual’s goods and
services are pooled together by central
authority to be used at a later time.
MARKET TRANSACTIONS
 MARKET TRANSACTIONS
MARKET
- refers to a bigger setting where buyers or
sellers exchange goods or services.
- It could imply a global setting where state
engage in market transactions toexchange
goods and services
 MARKET EXCHANGE

atleast two people involved

-one has a product
-one has a money
Using a system of barter and bargaining, the two individuals agree upon a specific price for a specifi
quantity of the product.
 MARKET EXCHANGE
Requires:
 a medium of exchanged
 a rate at which products are exchanged for
money
 Parties who are involved in exchanged
(ex. Buyer & seller)
MARKET EXCHANGE
 Element of Market Transaction

a. Money – it consists of objects that

serve as means of exchange for goods
and services.
b. Prices- it is the amount required or
agreed upon by the exchanging
parties.
 Element of Market Transaction

c. Supply – it refers to the quantity of goods

and services that are available to sell at a given
price and period of time.
d. Demand – it refers to the quantity of goods
and services that consumers are willing to
purchase at a given price and time period.
Element of Market Transaction
 Types of States According to
Market Roles

1. Laissez –Faire State

2. Interventionist or Developmental State
3. Welfare State
 Types of States According to
Market Roles
1. Laissez –Faire State
-derived from the French word “ to leave alone”
-the economy function best when the
government does not intervene through
regulations, subsidies, privileges and other
type of interventions.
 Types of States According to
Market Roles
1. Laissez –Faire State
-therefore completely does not have any
role in managing the market.
 Types of States According to
Market Roles
1. Interventionist or Developmental State
-the state intervenes in the market and
sets direction in the pace of economic
development that will bring about
economic development.
 Types of States According to
Market Roles
2. Interventionist or Developmental State
-implement policies, subsidies, protection
of tariffs and local industries and
prioritization of some industries over
others.