APECO - 3rd Quarter Exam

1. How economic resources important?

Economic resources such as land, labor and capital are important
because economic resources are the inputs we use to produce and distribute
goods and services. The precise proportion of each factor of production will
vary from product to product and from service to service, and the goal is to
make the most effective use of the resources that maximizes output at the
least possible cost. Improper use of resources may cause businesses, and
even entire economies, to fail.

2. Differentiate the macroeconomics & microeconomics

Macroeconomics is a division of economics that is concerned with the
overall performance of the entire economy. It studies the economic system as
a whole rather than the individual economic units that make up the economy.It
focuses on the overall flow of goods and resources and studies the causes of
change in the aggregate flow of money, the aggregate movement of goods
and services, and the general employment of resources. It is about the nature
of economic growth, the expansion of productive capacity, and the growth of
national income. While, microeconomics is concerned with the behavior of
individual entities such as the consumer, the producer, and the resource
owner. It is more concerned on how goods flow from the business firm to the
consumer and how resources move from the resource owner to the business
firm. It is also concerned with the process of setting prices of goods that is
also known as Price Theory. It studies the decisions and choices of the
individual units and how these decisions affect the prices of goods in the
market.It examines alternative methods of using resources in order to
alleviate scarcity.

3. What are the basic economic problems?

Each countries have their own economic problems but despite the
relatively impressive economic performance of the Philippines from the past
few years, many people, especially the poor, have been complaining about
not feeling its benefits. The basic economic problems in the Philippines are
Unemployment, Poverty, and Booming population.

4. Define the meaning of Market.

Market is an interaction between buyers and sellers of trading or
exchange. It is where the consumer buys and the seller sells. And it is
classified in three:
Goods market, where we buy consumer goods. Labor market, where workers
offer services and look for jobs, and where employers look for workers to hire.
And financial market, which includes the stock market where securities of
corporations are traded.

5. Explain the law of supply and demand.

The law of supply and demand is one of the most basic principles in
economics. In simplest terms, the law of supply and demand states that when
an item is scarce, but many people want it, the price of that item will rise.
Conversely, if there is a larger supply of an item than consumer demand
warrants, the price will fall.Supply and demand rise and fall until they achieve
balance. When the demand for an item balances with the supply of that
product, the market is said to be at equilibrium. The concept of supply and
demand can also extend beyond the buying and selling of goods to describe
behaviors across the economy. In addition, the law of supply states that, using
the assumption “ceteris paribus”, there is a direct relationship between the
price of a good and the quantity supplied of that good. Thus, as the price
increases, the quantity supplied of that product also increases and vice versa.
However, the law of demand states that, using the assumption “ceteris
paribus”, there is an inverse relationship between the price of a good and the
quantity demanded for that good. Thus, as price increases, the quantity
demanded for that product decreases and vice versa.