 it the evolutionary growth of various

activities developing from a simple to a

complex system.
 Primary aims to satisfy the consumer’s basic
and secondary needs.
 Its role is to produce goods and services
which consumers need.
 One measure of economic growth is the GNP.
 defined as the total market value of goods
and services produced by a country in any
given period.
 is the main objective of business which
distinguished it from charitable institutions
and government agencies.
 It is the prime motivator in a capital system.
 is the study of how a society produces and
distributes its desired goods and services. It
deals with how society uses its resources to
produce goods and services.
 LAND – pertains to all natural resources,
including timber, minerals, petroleum, and
the land itself.
 LABOR – refers to the physical and mental
input of the people who produce the goods
and services.
 CAPITAL – involves money.
 ENTREPRENEUR OR BUSINESSMAN – buys
and organizes these three factors of
production to provide goods and services.
 Power
 Profit
 Service to the community
 Prestige (widespread respect and admiration
felt for someone or something on the basis of
a perception of their achievements)
 Livelihood ( a means of securing the
necessities of life)
 Social approval
 PHYSIOLOGICAL OR BIOLOGICAL NEED – the
essentials for survival such as the need for food,
clothing, shelter, sex, air, water.
 SAFETY NEED – the desire for security, stability
or protection against danger.
 SOCIAL NEED – the need for group
belongingness, affection, love and friendship.
 EGO OR SELF-ESTEEM NEED – the need for
self- recognition or group satisfaction.
 SELF-FULFILLMENT NEED or SELF-
ACTUALIZATION– the need for the realization
of personal goal or ambition.
 INDUSTRIES – involve the conversion of raw
materials into finished products.
 COMMERCE – involves the process of buying
and selling where the goods are moved from
the point of production to the point of
consumption.
 SERVICE ENTERPRISES – are primarily
concerned with the satisfaction of the needs
and wants of the consumers.
 1. CAPITALISM – is a system in which the
means of production are owned and operated
by private individuals.
 It is a system of economic organization
wherein privately-owned capital, and
property rights are privately invested with the
ultimate aim of personal gain.
 2. SOCIALISM – means the ownership of
production and capital by the government
and the regulation by society, as a whole, of
the process of production and distribution,
and of the giving of essential services.
 Also called a mixed economy. It is in effect, a
free enterprise system with government
participation.
 3. COMMUNISM – stands for the collective
ownership by the government of
consumption goods and production goods.
 In this country, the state owns and controls all
means of production. The government plans
economic activities.
 is only possible if a country has maximized
the use of its human and natural resources.
 Means of livelihood
 Extent of economic activity
 Medium of exchange
 1. HUNTING AND FISHING PHASE – our
ancestors obtained food by hunting and
fishing taken directly from the mountains,
seas, and the bounties of nature. They did
not breed nor domesticate animals.
 2. PASTORAL PHASE – this phase made it
necessary for man to satisfy the needs of his
group during seasons of inclement weather
and the realization of a greater need for
planning, saving, and setting aside of stocks.
 3. HANDICRAFT PHASE – items or objects
were made by skilled and trained manual
laborers. It was the period of the medieval
guilds. They made excellent workmanship of
sculpture, tapestries, jewelry, fine musical
instruments, furniture, crystal, porcelain, and
other wares which are still admired and
treasured to this day.
 4. AGRICULTURAL PHASE – man began to
work as a farmer or a fisherman.
 5. INDUSTRIAL PHASE – this is characterized
by the presence of manufacturing companies
in certain areas like Metro Manila. It was the
period when machineries were used in
factories and industrial plants.
 1. HOUSEHOLD ECONOMY – the needs of
the family were satisfied largely by the efforts
and contributions of all members of the
family.
 2. VILLAGE ECONOMY – when several
families organize a village, economic and
social relations spread among the various
families resulting in the rise of the village
economy.
 3. NATIONAL ECONOMY – this phase
involves the grouping of villages into bigger
and broader social units.
 4. INTERNATIONAL ECONOMY – with
better and modern means of transportation
and communication, a country expands its
economic relationship through international
trade and diplomatic cooperation.
 1. BARTER ECONOMY – during the primitive era,
exchange was done through barter which was the direct
exchange of goods for goods, services for services, goods
for services or services for goods. Money was not used;
instead commodity was offered.
 2. MONEY ECONOMY – through time and evolution,
money was used as a medium of exchange. Money solved
the problem of barter economy, when such object became
standardized in value and regular in appearance so that it
became identified and accepted by the general public as a
medium of exchange.
 MONEY – is anything which is characterized by its general
acceptability, it redeemability in precious metals, or public
acceptance in any institution using it.2
 3. MONEY AND CREDIT ECONOMY – when
transactions continued to increase in volume
and frequency, it became imperative to allow
others to purchase one’s goods to engage one’s
services with payments to be paid at some
future date. This was proven when credit
transactions in modern business became far
greater in volume than cash transactions.
 CREDIT – is the power to obtain economic goods
and services in exchange for the promise to pay
the agreed equivalent at some future time.
 1. SOLE PROPRIETORSHIP – a form of business
ownership organized and managed by only one
person.
 - It should be registered in the name of only
one person.
 ADVANTAGES:
 a. Easy to set up/start.
 b. Decision making is left entirely to owner.
 DISADVANTAGES:
 a. Demanding on owner’s personal time.
 b. Growth limited by owner’s financial means.
 2. PARTNERSHIP – a business organization where two or more
persons contribute money, property, or talent to carry on a
business.
 - Agreement is required to be in writing.
 LIMITED PARTNER – has limited liability for business debts.
 GENERAL PARTNER – has unlimited liability.
 ADVANTAGES:
 a. Relatively easy to set up.
 b. Checks and balances maintained with two parties around.
 DISADVANTAGES:
 a. Dissolution of partnership by any personal rifts between
partners.
 b. Equal profit sharing despite unequal attention and time
given by partners to business.
 CORPORATION – is an artificial being created by the operation of
law, having the rights of succession and the powers, attributes, and
properties expressly authorized by law or incident to its existence.
 ADVANTAGES:
 a. Maximum flexibility.
 b. Limited liability of individual share.
 c. Greater room for professionalism.
 d. Dissolution is least likely to occur.
 e. Can involve a wide range of people in business including
employees.
 f. Reduced tax burden on owners.
 DISADVANTAGES:
 a. Complicated setting-up process.
 b. Limited influence on management by individual stockholders.
 c. Tendency to institutionalize bureaucracy.