D

L3: ECONOMIC INSTITUTIONS

  • Economic Organization - coordinating the other production factors - land, labor, and capital. The organization is performed by the entrepreneur described as the “captain of industry”.

  • Property - is best understood as a socially acknowledged right rather than a material object. It involves the right of ownership which differs from a simple possession of goods or commodities.

  • Economic Exchange - the process by which individuals and organizations give each other valuable goods and services in return for different goods and services.

  • Division as Labor - refers to the distribution of work in reference to age, gender, skill, or qualification. In an economic organization, tasks are specialized and there is interdependence among various statuses and roles.

  • Economic Socialization - a process by which people learn the values and behavior needed to fill positions in the economic community.

  • Price - refers to the monetary value of goods and services. It is determined by the interplay of supply and demand.

  • Laws of Supply and Demand - states that when demand is greater than supply, the price increases; and when supply is greater than demand, price decreases.

4 TYPES OF ECONOMIC ORGANIZATIONS

  1. ==Sole Proprietorship== - known as a “one man-business”. It is an economic organization in which the proprietor solely manages the business and undertakes the risks of the business. The proprietor owns capital and performs all the functions of an entrepreneur.
  2. ==Partnership== - a type of economic organization where business is carried on by 2 or more men called partners. It’s a business arrangement in which 2 or more individuals share the capital, profits, and liabilities of a business venture.
  3. ==Corporation== - a legal entity that’s separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that an individual possesses that is, a corporation has the right to enter into a contract or loan, and is often referred to as a “legal person”.
  4. ==Cooperatives== - a business organization that is established for the purpose of providing services on a non-profit basis to its shareholders or members who own and control it.

TYPES OF COOPERATIVES IN THE PHILIPPINES

  1. Credit Cooperative - the one that promotes and undertakes savings and lending services among its members.
  2. Consumer’s Cooperative - one of the primary purposes of which is to procure and distribute commodities to members and non-members.
  3. Producer’s Cooperative - the one that undertakes a joint production whether agricultural or industrial.
  4. Marketing Cooperative - the one which engages in the supply of production inputs to members and markets their products.
  5. Service Cooperative - the one who engages in medical and dental care, hospitalization, transportation, insurance, housing, labor, electricity, light and power, communication, professional and other services.
  6. Multi-Purpose Cooperative - the one that combines 2 or more of the business activities of these different types of cooperative.