ACTIVITY: APPLIED ECONOMICS

Why is the demand curve downward sloping and

supply curve upward sloping?

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How do technologies affect changes in supply? Cite

your own example.

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Criteria

Content 50%
Relevance 25%
Organization
Sentence pattern 25%
Unity of ideas
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Total 100%
 Directions: Solve for the following problems.

1. Solve for the Pricing for simple mark-up rule if Elasticity of demand for Kodak film is;

a. -3

b. 4

c. -2.5

2. Determine the profit-maximizing price if homogeneous product Cournot industry have 6 firms,
MC= $ 15 and Elasticity of market demand is -3/4.

3. Suppose the elasticity of demand for Kodak film in the USA is EU = -2.5, and the elasticity of
demand in Japan is EJ = -5.5 and the Marginal cost of manufacturing film is $6. Solve for the third degree
price discrimination of the two countries.

4. Grocery stores that are open 24 hours a day normally charge higher prices than supermarkets.
Why? Use the concept of price elasticity of demand in your answer.

Directions: Answer the following questions briefly and on point.

 1. On your own idea, explain the importance of good economic decision making.

2. Differentiate external and internal decision makers.

3. Is it ethical for a company to limit the information available to internal decision makers?
External decision makers?

4. What sacrifice does a business owner make when purchasing machinery for the production
plant? What benefit does the owner derive from the sacrifice to purchase the machinery?

5. Assume that you are a lender with three customers who wish to borrow $10,000. You can
lend to only one of them. What information would you require each of them to present for you to answer
the three questions? How would you make your decision?

6. List two examples where you can identify the return of investment and return on
investment .

Directions: answer the following questions briefly and on point.

 1. What is opportunity cost and resource allocation means?.

2. Why do most Metro Manila residents travel to Baguio City by bus, while wealthy
businessmen are more likely to travel by air? Use the concept of opportunity cost in your answer.

3. “Fast-food or quick service restaurants fulfil a valuable role by catering the time-
pressured customers”. Discuss this statement. Use the concept of opportunity cost in your
answer.

4. Make a list of devices that were developed in response to higher opportunity cost of
time used in cleaning the house and doing laundry.

5. Explain further “The cost of stability is often diminished opportunities for growth”.

6. Give your own example of opportunity cost based on real time experience.

II. Research

1. Research and discuss the “ Resource Allocation in the Philippines ”.