Economics: Key Concepts and Consumer Rights (Lecture Notes)

Vocabulary-style flashcards covering economics concepts, systems, factors of production, consumption determinants, consumer rights, and duties as presented in the lecture notes.

Economics

The social science that studies how people allocate limited resources to satisfy unlimited needs and wants.

Adam Smith

Father of modern economics; author of The Wealth of Nations.

Wealth of Nations

Adam Smith’s famous work explaining the causes of wealth and the role of markets and trade.

Scarcity

The condition in which resources are limited and unable to meet all human wants.

Natural Resources (Yamang Likas)

Resources found in nature that can be exhausted or depleted over time.

Capital Goods

Man-made assets (machinery, buildings, tools) used to produce goods and services.

Needs

Essential things a person must have to live.

Wants

Desires for goods or services beyond basic needs.

Allocation

The process of distributing limited resources among alternative uses.

Consumption

The purchasing and use of goods and services to satisfy wants and needs.

Production

The process of combining resources to create goods and services.

Trade-off

Choosing one option at the expense of another.

Opportunity Cost

The value of the best alternative forgone when a decision is made.

Marginal Thinking

Evaluating the additional costs and benefits of a decision.

Incentive

A motivator that influences choices by offering a benefit.

Traditional Economy

An economy guided by tradition, culture, and beliefs (e.g., Haiti, Bhutan).

Market Economy

An economy guided by free-market mechanisms and voluntary exchange (e.g., USA, Australia).

Command Economy

An economy controlled by government planning and regulation.

Mixed Economy

An economy with free markets plus government intervention in certain areas.

Factors of Production

The resources used to produce goods: land, capital, labor, and entrepreneurship.

Land (Lupa)

Natural resources on or beneath the earth; fixed in supply.

Capital (Kapital)

Assets like machinery, buildings, and infrastructure used to produce goods.

Labor (Lakas-Panggawa)

Human effort used in production; includes white-collar and blue-collar workers.

White-Collar Job

Labor that primarily involves mental work.

Blue-Collar Job

Labor that primarily involves physical work.

Entrepreneurship

Ability and willingness to start and manage a business; coordinates the other factors of production.

Consumption Determinants

Factors influencing spending: price changes, income, expectations, future scarcity, debt, and media influence (demonstration effect).

Price and Consumption

Lower prices tend to raise consumption; higher prices tend to reduce consumption; discounts can stimulate demand.

Income and Consumption (Keynes)

As income rises, consumption generally rises; as income falls, consumption falls.

Future Expectations and Consumption

Expectations of shortages or rising prices can increase current consumption; negative outlook reduces it; positive outlook can boost early consumption.

Debt and Consumption

Higher debt reduces current consumption; lower debt frees up spending.

Demonstration Effect

People imitate media advertising and trends, affecting consumption choices.

Matalinong Mamimili Traits

A smart buyer analyzes product, seeks alternatives, avoids deception, considers price and quality, sticks to budget, resists endorsements, and avoids panic buying.

Consumer Protection Agencies

Government bodies safeguarding consumers: Department of Trade and Industry; Bureau of Food and Drugs; Environmental Management Bureau; Energy Regulatory Commission; Professional Regulation Commission; National Consumer Affairs Council.

Republic Act 7394 (Consumer Act of the Philippines)

Law promoting consumer welfare by setting standards for business operations, safety, fair practices, right to be heard, and representation by consumer groups.

Eight Rights of Consumers

Rights: basic needs, safety, information, choice, to be heard, redress, education/being wise, and a clean environment.

Right to Basic Needs

The right to adequate food, clothing, shelter, health care, education, and sanitation.

Right to Safety

The right to protection against goods and services that are dangerous or harmful.

Right to Information

The right to accurate, clear information and protection from deceptive labels and ads.

Right to Choose

The right to access a variety of goods and services at affordable prices.

Right to be Heard and Express

The right to have consumer concerns and complaints heard by policymakers.

Right to Redress

The right to compensation for harm caused by a product or service.

Right to Consumer Education / Be Wise

The right to education and knowledge to make informed consumer decisions.

Right to a Clean Environment

The right to a healthy environment and the duty to protect it.

Fifth Duty: Mindful Awareness

Being vigilant about the use, value, and quality of goods and services.

Duty: Action

Actively and verbally pursuing fair treatment in transactions.

Duty: Social Responsibility

Considering the impact of consumption on other communities.

Duty: Environmental Awareness

Recognizing environmental effects of consumption and choosing sustainable options.

Duty: Solidarity

Joining with consumer groups to strengthen collective bargaining power.