Technological University of the Philippines

Ayala Blvd., Ermita, Manila

College of Industrial Technology
ESS5-M

Assignment No. 1

Engineering and Economics

Submitted by:
STA. INES, REZZILIN L.
BET-AET-NS-4A

Submitted to:
MR. HASER D. DESTAJO
Instructor

Date Submitted:
Month Date, Year
 Self-assessment Questions

1. Explain the difference between need and want.

- “Need” is something that is required in order to exist and function. “Want” is

something that can raise your quality of life. According to these standards, a need
implies accessibility to food, clothing, housing, and healthcare, and want
includes everything else.

2. Explain the difference between consumer goods and producer goods.

- Consumer goods are items that are bought for individual use. Consumer goods
are products that customers ultimately employ to satisfy their wants. These
products directly meet consumer needs. Producer goods are products that a
business uses to make more of its own products. Producer goods are those that
manufacturers utilize to create new products or to continue on with the production
process.

3. Give a personal example of how the law of demand (lower price, you buy
more) has influenced you as a consumer. Discuss the process of making
decisions.

- Demand increases and supply remains the same will cause an increase in the
price. The shortage of products increases the value of the product. An example of
this is the tripled price of onions due to the recent market shortage that has
happened. Demand decreases, and supply remains the same, the price reduces.
If the demand continues to decline, there will be a surplus of the product in the
market, subsequently dampening the product’s value. Supply increases and
demand remains unchanged will cause an easy availability of a product causes a
decrease in its price, manifesting an oversupply scenario if the demand remains
intact for long. Supply decreases and demand remains unchanged the price will
increase.

4. According to the law of demand, what will happen when a Mexican restaurant
decides to cut the price of their tacos by 50% for their “Taco Tuesday”
special?

- Although it is not required for me to purchase any of the food that I see, consumers
like me buy in drive-thrus at the restaurant. Just because it is 50% discounted,
buyers will purchase food. And, for this reason, many people will also come
5. Cite the differences between monopoly, oligopoly, and perfect competition
and give examples.

- A monopoly exists when just one company produces a good and there are no other
competitors. In comparison, an oligopoly exists when a small number of very large
businesses manufacture products that are similar but somewhat different. Perfect
competition exists when all businesses sell the same goods, market share has no
effect on prices, businesses can enter or quit the market without any restrictions,
consumers have complete or perfect information, and businesses are unable to
set prices. A common example of a monopoly is electricity companies, natural gas,
and water. They are monopolies because it is expensive to enter the market and
because competitors are unable to offer the same services in numbers and at costs
similar to the dominant company. Examples of oligopolies include steel
manufacturing, oil, railroads, tire manufacturing, grocery store chains, and wireless
carriers. Other industries with an oligopoly structure are airlines and
pharmaceuticals. Consider a farmers market where every vendor offers the same
brand of jam as an example of perfect competition. Since they all use the same
recipe and charge the same price for their products, there is little difference
between them.