UCSP ECONOMICS SEM 2

• All societies have an economy which can be viewed as a social institution organized around production, consumption and distribution of goods and services. It operates in generally predictable manner.
• Non-Market Institutions transactions: 1. Reciprocity 2. Transfer 3. Redistribution (no exchange of cash for provisions of goods and rendered services)
• Reciprocity refers to the voluntary giving or taking of objects without the use of money in the hopes that, in the future, they could be given back.
• Transfer is when one person gives something to another with no expectation of getting anything in return. This type of transaction usually happens between family members, friends, and loved ones. The transfer may involve food, clothing, shelter, education, health care, etc.
• Generalized reciprocity is the exchange of goods and services without a definite time frame of when the favor should be returned. Individuals giving out the favors do not expect to receive anything back. Such activity is commonly done among small groups or societies.
• Balance Reciprocity is exchange occurs between groups or individuals with the donor expecting to receive something of equal or similar value. There is no bargaining between two parties, and the exchange of goods occurs at a particular rate set upon by the groups. There is pressure to give back the favors at a specific point in time. Balanced reciprocity demands timely reciprocation that when favors are not received by the donor, they could refuse to continue giving out the favors.
• Negative Reciprocity is the act of exchanging goods where there is a clear intention of gaining more than what was originally given. In this case, the individual receiving the good will try to get away with paying less than its actual worth. Negative reciprocity often involves cheating, stealing, lying, and other forms of deception.
• Redistribution occurs when individuals' goods or services are pooled together by a central authority to be used at a later time. The central authority may refer to a regional collection point, a storehouse, or the national capital. Redistribution collects goods from individuals in a community to be kept by a central authority which will be used in the future by the same group.
• A Market, in economic terms, refers to a bigger setting where buyers or sellers simultaneously trade or exchange goods or services. Markets could imply a global setting where states engage in market transactions to exchange goods or services.
• Money consists of objects that serve as means of exchange for goods and services.
• Prices it is the amount required or agreed upon by the exchanging parties. It is the amount of money used in exchange for a certain product.
• Supply refers to the quantity of goods or services that are available to sell at a given price and period of time.
• Demand refers to the quantity of goods or services that consumers are willing to purchase at a given price and time period.
• Laissez-faire is derived from French words that mean "to leave alone." According to the principle of laissez-faire, the economy functions best when the government does not intervene through regulations, subsidies, privileges, and other types of intervention. The laissez-faire state, therefore, completely does not have any role in managing the market.
• The developmental or interventionist state is a state that intervenes in the market and sets the direction and pace of economic development that will bring about economic development.
• The welfare state is one that plays an important role in the achievement and protection of the economic and social well- being of its citizens. In contrast to the developmental state, the welfare state's involvement is aimed at achieving a good quality of life for the citizens, rather than merely driving economic development.