Answer the following;

1. How does economics apply to your daily life as a student?

Economics in a way prepares you on how to live in today’s world. From an individual perspective,
economics frames many choices we have to make about work, leisure, consumption and how much
to save, even if we are only a student.

Economics apply to our daily life as a student by helping us to decide on what we are going to make
that provide us more utility or personal satisfaction. We are called to make choices at our homes,
marketplace and schools. How much to spend and save, how to allocate our savings between
different kinds of financial assets, whether to take a Tricycle or Multicab, how are we are going to
pay and budget our allowance, and so on. Economics guide us on how to manage our time and
money, like choosing the right balance between work and leisure, and it improves our standard of
living.

2. Under normal circumstances, when price of a commodity falls, the quantity demanded will
______. (Increase, decrease, unchanged). Why?

Under normal circumstances, when price of a commodity falls, the quantity of the demand will
increase.

Because according to law of demand, other things being constant, if the price of a commodity falls,
the quantity demanded of it will rise and if the price of a commodity rises, its quantity demanded
will decline. The utility/satisfaction of the consumer goes on decreasing with every additional
consumption of the commodity and hence, the consumer will buy more goods only when the price
decreases. That is why the quantity demanded and price are inversely related this means that as the
price of the goods increase the demand of that commodity decreases and vice versa. 

3. Available resources are limited and human wants are unlimited, what can you suggest about
this situation?

If you look around carefully, you will see that scarcity is a fact of life. We can’t avoid or remove the
scarcity of almost everything resources, but it can be lessened by the right decisions and correct
choices. In other word people must make choices related to goods and services.

Human as we are, we people have insatiable needs. In this situation I suggest that we have to control
our expenses base on what we earn, to use of resources efficiently so that nothing will be put into
waste. And also I suggest that the Governments must make choices among various programs they
desire to continue of pursue as they face scarcity. At every level, must make choices about how to
use its resources. In the real world, everything costs something; in other words, every resource is to
some degree scarce. 

4. What usually constitutes the main source of a government’s income?

Income sources refers to the component which constitutes the largest proportion of an income
recipient's total income. Various combinations of income sources can be used to derive this
classification. For example, at the most detailed level, the income sources are combined into five
components: wages and salaries, self-employment income (farm and non-farm), government
transfer payments, investment income and other income.

Revenues refer to all cash inflows of the national government treasury which are collected to
support government expenditures but do not increase the liability of the national government. A tax
is a compulsory contribution mandated by law and exacted by the government for a public purpose.
The major tax collecting agencies of the national government are the Bureau of Internal Revenue
and the Bureau of Customs. These are the main source of government’s income: Taxes on income
and profits are imposed on all taxable income earned or received by a taxpayer, whether as an
individual, as a partnership, or as a corporation, during a particular period of time, usually lasting
one year. Taxes on domestic goods and services are imposed on the use or sale of locally
manufactured goods as well as local services availed of within the domestic territory. Taxes on
international trade and transactions include import and customs duties, and other international
trade-related collections of the government. Taxes on property are imposed on the ownership of
movable or immovable property levied at regular intervals and on the transfer of real or personal
property. Other taxes primarily include collections from the motor vehicles tax, immigration tax and
forest charges. Non-tax revenues refer to all other impositions or collections of the government in
exchange for services rendered, assets conveyed, penalties imposed, etc.

5. Which do you think is best economic system to be used? Why?

Throughout the past centuries, capitalism and democracy have proven themselves the most
successful systems of economic and political order. Capitalism has become the predominant system
around the world. Only a few isolated countries such as North Korea have been able to resist the
success of capitalism through the use of brutal force. The market has become the main mechanism
for economic coordination and the maximization of profits. It is the most effective way to provide for
the needs of people and foster the democratic and moral values of a free society. Yet the worst
recession in decades has widely, and understandably that shaken people's faith in our system. The
success of democracy was also impressive. Researchers find democracy economic system has a
positive effect to reforms, private investment, the size and capacity of government, and a reduction
in social conflict, and it can increase economic growth.

For me, I think the best economic system to be used is democracy economic system because it helps
the government, as well as the country, to eradicate the various programs and policies that are not
beneficial for the people of the country. It associated with higher economic freedom that help the
economy to grow through suggesting and improving ideas. Democracy can be defined as a form of
government in which every citizen has an equal say in who will run the country and the decisions
that will be made. While forms of democracy all over the world will vary in its form of
implementation the one constant that remains is the ability of the citizen to be able to vote in
elections to make important decisions about the laws that will pass and who will be elected as
leader. Democracy has also been tied closely to economic development as more countries in various
parts of the world become democratic. Consequently, their economies become more modern and
improve due to the impact of globalization.  This form of early democracy demonstrates that when
the people are in charge of their own decisions, the economy will thrive and prosper providing
numerous benefits to all its citizens. Through the process of democratization, power can be given to
the working class which in turn improves the economic development of the working class and the
nation as a whole. Both economic development and democratization reinforce each other.