Republic of the Philippines

NORTHERN ILOILO POLYTECHNIC STATE COLLEGE

Estancia, Iloilo

School of Management
Bachelor of Science in Business Administration

Final Examination 100

Agricultural Economics
2nd Semester, A.Y. 2020-2021

Name: _________________________________________ Yr. /Sec.: __________ Date: _____________

Subject Professor: Prof. Jonamae V. Buli

I. Illustrate and Explain! Briefly explain or described what is being asked. (10 points each)
Note: Each number/answer (1-6 illustration and explaination) should be written seperately
on each coupon bond/yellow paper. In a marginal manner (1’ on top and bottom, 0.75 on
left and right side).

1. How important an agriculture to Filipinos?

GDP from Agriculture in Philippines decreased to 415945 PHP Million in the second
quarter of 2021 from 434002 PHP Million in the first quarter of 2021.

The importance of agriculture in the economy of the Philippines is measured as the

value added of the agricultural sector as percent of GDP. Agriculture includes forestry,
hunting, and fishing, as well as the cultivation of crops and livestock production.
Agriculture plays a significant role in the Philippine economy. Involving about 40 percent
of Filipino workers, it contributes an average of 20 percent to the Gross Domestic
Product. This output comes mainly from agribusiness, which in turn accounts for about
70 percent of the total agricultural output. But, as the source of our food supply is the
main importance of agriculture in the lives of Filipino. Arguably the most important
aspect of agriculture is that it's the source of the world's food supply. No matter where
or what you are eating, the ingredients in your meals came from somewhere. All roads
lead to agriculture.
 However, agriculture in the Philippines is one, if not the essential industry in the
country. It consists of forestry, crop production, livestock farming, and aquaculture
cultivation. Its output sustains the local demand and considered to be essential
commodities within the country. Commercial crops assist both the agricultural export
industry as well as the domestic demand and consumption. Growing crops for food
consumption and fiber have been a lifelong activity in the Philippines. In the last few
years, cultivating a million hectares of land has steadily increased. Perhaps what has
been a common scenario recently is how locals are developing their backyard to raise
their plants. These plants are vegetables and fruits to sustain their own demand ever
since the coronavirus COVID-19 pandemic has started in the Philippines.

2. How budget constraint affects utility and satisfaction of every consumer?

To understand how a household will make its choices, economists look at what
consumers can afford, as shown in a budget constraint or budget line, and the total
utility or satisfaction derived from those choices. When we graph a budget constraint,
the quantity of one good is on the horizontal axis and the quantity of the other good on
the vertical axis. The budget constraint line shows the various combinations of two
goods that are affordable given a specific budget or level of consumer income.
Consider Jose’s situation. Jose likes to collect T-shirts and watch movies. In the figure,
we show the quantity of T-shirts on the horizontal axis while we show the quantity of
movies on the vertical axis. If Jose had unlimited income or goods were free, then he
could consume without limit. However, José, like all of us, faces a budget constraint.
Jose has a total of PHP560 to spend. The price of T-shirts is PHP140 and the price of
movies is PHP70. Notice that the vertical intercept of the budget constraint line is at
eight movies and zero T-shirts. The horizontal intercept of the budget constraint is four,
where Jose spends of all of his money on T-shirts and no movies. The slope of the
budget constraint line is rise/run or –8/4=–2. The specific choices along the budget
constraint line show the combinations of affordable T-shirts and movies.
Utility is the term we use to describe the satisfaction or happiness a person gets from
consuming a good or service. Jose obtains utility from consuming T-shirts and consuming
movies. Like all consumers, we assume Jose wishes to choose the combination of T-shirts and
movies that will provide him with the greatest total utility.

3. What is the law of demand?

The law of demand is one of the most fundamental concepts in economics. It works with
the law of supply to explain how market economies allocate resources and determine
the prices of goods and services that we observe in everyday transactions.
The law of demand states that quantity purchased varies inversely with price. In other
words, the higher the price, the lower the quantity demanded. This occurs because of
diminishing marginal utility. That is, consumers use the first units of an economic good
they purchase to serve their most urgent needs first, and use each additional unit of the
good to serve successively lower-valued ends.

For Example, Michelle is shopping for shirts. She chooses one, then notices that the
shirts are on sale, and gets another two shirts.

This is an example of moving along a demand curve. Nothing except for the price has
changed, so when Michelle notices the price change, she buys more shirts.

4. What role does the composition of the population plays in the demand for particular
commodities?
The size or composition of the population can affect demand. The more the family of
Balogo are vegetarian due to health issues the lesser the demand of meat.
 The Family of Balogo
300

250

200
Price of Meat

150

100

50

0
0 1 2 3 4 5 6 7 8 9 10
Quantity of Meat

5. Can a country live alone without engaging to exporting/importing goods to other

countries? Explain your answer.
Exporting and importing helps grow national economies and expands the global market.
Every country is endowed with certain advantages in resources and skills. For example,
some countries are rich in natural resources, such as fossil fuels, timber, fertile soil or
precious metals and minerals, while other countries have shortages of many of these
resources. Additionally, some countries have highly developed infrastructures,
educational systems and capital markets that permit them to engage in complex
manufacturing and technological innovations, while many countries do not.

The country’s total export sales in May 2021, amounting to USD 5.89 billion, increased
at an annual rate of 29.8 percent, from an increase of 74.1 percent in the previous
month. In May 2020, total export sales declined at an annual rate of -26.7 percent
annually.
 Total imported goods in May 2021, which amounted to USD 8.65 billion, increased at an
annual rate of 47.7 percent. In April 2021, the annual increase was higher at 152.8
percent, while in May 2020, imports decreased by -40.5 percent annually.

6. Describe a typical Filipino farm.

A farmer can earn a decent income from 1.5 hectares of land if he is cultivating high
value crops like vegetables or cut flowers. However, if he is tilling traditional crops like
rice, corn or coconut, there is no way he will earn a decent income from farming. No
matter how efficient the farmer is in tending his farm, no matter how much assistance
or subsidies the government provides to such a farmer, it will be impossible for him to
earn an income adequate to support the needs of a family of five or six members with
the land size that he has. It is worth pointing out that most of our farmers are engaged
in the cultivation of traditional crops.

Filipino farmers are the highest in the rating of poverty, they are the one who

are more underprivileged despite of great work they provide. The agriculture is one of
 the main provider of the growth of the Philippines’ economy, but the agriculture sector

are neglected and our farmers are mistreated.

II. Enumeration. Answer the following in any order. (20 points)

* 1-6 Tastes and preferences

*7-12 Basic Characteristics of Philippine farm

*13- 16 Problems of Philippine Agriculture

III. Name them. (20 points)

1. Research different kind of fish whether fresh/dried fishes that we export? Name them; put brief
description and pictures if possible. At least 5.

***Good luck and God Bless***