Midterm Flashcards
An orderly working body joined in a regular interdependence to serve a common purpose
System
A set of economic institutions that dominates a given economy
Economic system
Is a set of rules of conduct of established ways of thinking or doing things.
Institution
Principal objective of economic system
To solve the basic economic problem
Goal of economic system
High standard of living for all citizens
Basic economic problems
Production
Consumption
Distribution
Growth
Sum total of the productive activity of an entire population
Economy
Smallest units in any economy
Individual
Firm
Are the unit of organization and the locus of decision-making
Firms
Production unit
Plant
Firms that produce similar or identical products
Industry
Classifications of economic systems by R. Subade
- Custom or traditional economy
- Command or planned economy
- Market economy
- Mixed economy
Classifications of economic system by Sicat
1) Planned economy A. Communist economy B. Socialist economy 2) Mixed or regulated capitalism 3) Free economy or free capitalism
Reaction to mercantilism
Laissez faire
Reaction to the abuses of capitalism
Socialism
Criteria for economic system
- as to ownership of the means of production
- as to economic decision-making
- as to presence or absence of price-control
- as to availability of goods in the market
- as to presence or absence of consumer rights
Comprises a group of buyers and sellers who engage in trade
Market
3 (4) fundamental questions
- What goods and services shall be produced?
- How shall they be produced?
- For whom shall they be produced?
(4) How much shall be produced?
Stages of Philippine economy
- Direct appropriation economy
- Pastoral economy
- Agricultural economy
- Town economy
- National economy
- appropriated the gifts of nature to satisfy their wants
- gathered fruits and plants in the forest for their food
- defended on hunting and fishing using simple implements or tools
Direct appropriation economy
- people domesticated animals
- they lived a nomadic life
- trade was by means of barter
- slaves were bought and sold
- wealth considered of animals
Pastoral economy
- man settled down and cultivated soil
- with greater economic security, population increased rapidly
- family became the unit of production
Agricultural economy
- towns rose
- merchants formed themselves into guilds
- engaged in handicrafts and industries
- trade was confined to a certain place
Town economy
- trade was no longer confined
- trade extended across national boundaries
- foreign trade gave rise to mercantilism
- industry was controlled by individuals who possessed capital
- laborers borrowed money foe capitalists and sold finished goods
National economy
An economic organization or system in which means and methods of production are controlled, owned and operated by private individuals and through private initiative
Capitalism
An economy in which the forces of demand and supply operate freely
Free economy
Other name of free economy
Free-enterprise system or economy
A form of society guided by the principle of equality, cooperation and concern for the poor and powerless
In modern era, this is associated with working class or political power
Socialism
An economic system in which there is common or joint ownership of property by the state
Communism
A type of economic system for decision-making which makes its economic choices through a sort of economic commander in chief or group of men whose wishes are the command of the producer
Command economy
A system wherein all economic activities are planned centrally
The means of production particularly in major industries are often publicly owned and administered
Individual initiative in making economic decisions is replaced by centralized economic planning and control
Planned economy
A type of economic system for decision-making whose economic choices are decide by the past.
A product is produced a certain way because it has always been that way
Traditional economy
An economy in which both public and private institutions exercise economic control
Mixed economy
Is an orderly working body joined in a regular interdependence to serve a common purpose
system
Most simple form of business
Easiest to register
Oldest form of business organization
Single or sole proprietorship
Advantages of sole proprietorship
Decisions made only by owner
Simple process to start
Profits belong to owner
Pride of ownership
Lower taxes
Disadvantages of sole proprietorship
Unlimited liability
Limited life of business
Difficult to raise capital
Risk of loss is not shared
Business owned and operated by two or more people
Bind themselves to contribute money, property or industry to a common fund
Partnership
Advantages of partnership
Easy to start
Not many regulations
Not as difficult to raise capital
Combination of knowledge and skills
Disadvantages of partnership
Unlimited liability
Profits are shared
Limited life of business
Disagreements
Types of partnerships
General
Limited
Joint venture
Partners divide responsibility
Equal shared assumed
General partnership
Partners have limited liability
Limited input in management decisions
Not often used for retail
More complex and formal than general
Limited partnership
Acts like general partnership
Limited period of time or single project
Joint venture
Business owned by stockholders but operated by officers
Most common form of business organization
Limited liability of owners
Corporation
Advantages of corporation
Easy to raise capital Limited liability Unlimited life of business Hire specialized skills Shared risks
Disadvantages of corporation
Difficult to start
Less direct control
Double taxation
Limited activity
Types of market structures
Monopoly
Oligopoly
Perfect competition
Monopolistic competition
Inner dimensions of health
Physical Mental Emotional Social Spiritual Sexual
Outer dimensions of health
Societal
Occupational
Environmental
Methods used in economic health evaluation
Cost minimization
Cost effectiveness
Cost utility
Cost and benefit analysis
Enrollees
Formal sector
Indigents
Retirees
Individual paying program
