Villa, Esmeralda Amor D.

February 5, 2020

BSAIS-3

Economic Development

Activity 1- Introduction

1. Suppose your friend is strong on defense and insists that we must bolster our
national defense, whatever the cost. How can you use your economic logic make him
or her aware of the opportunity costs associated with his or her objective?

Answer: As a friend I can use my economic logic by saying to my friend what will be the
effect of her/his decisions to our nation if he/she chose that. What is opportunity cost?
Opportunity cost is the best alternative forgone to produce or consume something else.
This concept is useful simply as a reminder to examine all reasonable alternative solution
before making a decision. It can help her/his to decide what she/he needs to do or need to
choose.
2. Unemployment imposes serious hardships on –out-of- work individuals and their
families. What are the costs of unemployment to society as a whole? (Keep in mind
the production possibilities curve).

Answer: Costs of unemployment to society as a whole is poverty. For me this is a major

problem of being unemployed, because this is the only way that will help us to survive
our family. It leads us to have a debt, breakdown and do crime. Decreasing the goods and
services can also result of the unemployment. It has a big impact to our economy because
how the governments pay the debts of our country and sustain the needs of the country if
many people don’t have work; they are not able to pay their own taxes. There is also use
of resources, knowledge and technology but they don’t have workers. So it can cause that
other resources will not able to work and some even unused. They say that resources
must be put to work to move back to production possibilities curve.
 Ineffective use of
resources

Poverty because
of the loss of UNEMPLOYMENT Social Problems
income

Less tax revenue

3. Why, in rich nation, is it important that we fully use our resources and technology
to maximize our nation’s input? Is it only the level of total output that is important,
or are the types of output that we produce also important? Do you think that the
distribution f this output is just as important as its total amount?

Answer: It is important that we fully use our resources and technology, not just in rich
nation but also in our nation. It is important because it help the nation to produce fast and
more goods or services. Resources and technology really change, but one nation must
have much alternative way to solve the problem or the scarcity of a nation. Nation must
know how increase production so that it can’t affect it to the nation.
4. Do you think our nation’s output should be distributed according to income or
according to some other standard (such as basic human need)?

Answer: For me, I think our nation’s output should be distributed according to income of
humans and not according to other standard. We have different output so we don’t need
to consider other standards, it must distributed according to the real needs of the country
 such as the poverty and the supply of other products. It will lead to other people to have a
slow lack of willingness to work.

5. Does the efficiency of the price mechanism ensure that our market-based economy is
an equitable one? Why or why not?

Answer: The distribution of goods and services may not be equitable. We may
summarize it by saying that the markets involve positive and negative aspects. In the
market, prices ration away the shortages of highly desirable goods and the less desirable
ones appearing. It is said that market place is very efficient, but not necessarily equitable.

6. Find a good example of economic joke and share it with the rest of the class.

Answer: Inflation allows you to live in a more expensive neighborhood without moving.