APPLIED ECONOMICS

SECOND ACTIVITY

1. Why do you have to study economics? (minimum of 50 words only)

I have to study economics to learn how individuals, businesses, governments, and
nations make choices about how to allocate resources. Studying economics will improve my critical
thinking, decision-making skills, time management, and Problem Solving abilities and can have more
job opportunities. It can also give you a high level of mathematical and statistical skills
and the ability to apply economic principles and models to problems in business, finance and the public
sector.

2. What are the different economic resources and their resource payments? (50 words)

There are four different economic resources. First one is Land which includes all-
natural resources used in production process like mineral and oil deposit, water, and fertile oil. The
payment for the use of land is called rent. Second is Labor or Human Resources. It refers to the
physical and mental talents to produce goods and services like teachers and doctors. Wage is the
income to laborers, who own their labor. Third one is Capital, it is a manufactured resource or also
known as capital goods used in producing consumer goods like buildings, tools, equipment,
bridges and etc. Interest is the payment for the use of capital. Lastly, the Entrepreneurial
Ability which need special skill to produce goods and services like managerial and organizational
skills. The one involve here is the owner. The profit is the income of an entrepreneur after
deducting the payments from the owners land, labor and capital.

3. How is production differ from consumption? Give examples for each(25 words per example)

 Production can be understood as creation or making of any product. Consumption is

what the populace consumes. Therefore, the ultimate goal is to have production meet
consumption standards so that the population is well taken care of. An example of production is
making of furniture, harvesting corn to eat, Cars, clothing, sandwiches, and toys. An example of
consumption is when many members of the population go shopping, eating a snack and some
cookies, when a person consumes 2 bushels’ vegetables per day. It is the act of consuming
something.