Nicole Ashley E.

Vergara
BSA 3
Economic Development

PRELIM EXAM

Directions: Discuss fully and illustrate with examples.

1. What is economic development? Discuss thoroughly its meaning, scope

and measurement. (50 points)

Economic Development is the process in which people in a country become wealthier, healthier,
better educated, and have greater access to good quality housing. Economics is the social science
that studies the production, distribution, and consumption of goods and services. It's the study of
scarcity, the study of how people use resources and respond to incentives, or the study of
decision-making. Economics studies various factors that affect society, the use of goods and
services, the involvement of individuals, businesses, countries, and governments.. Economics
examples are when rice crop production increases, the farmers decrease the price of the rice
crop so that they can sell off their produce. And If the supply is too high then the demand the
amount of rice needed to feed the people of the Country, the produce had to be wasted and
farmers lose their cost of production.

2. What is macroeconomics and microeconomics? What are the key differences? How do they
affect business? (50 points)

Microeconomics
• Microeconomics is concerned with prices and production in single markets and the interaction
between different markets.
• is the study of how individuals and companies make choices regarding the allocation and
utilization of resources.
• It also studies how individuals and businesses coordinate and cooperate, and the subsequent
effect on the price, demand, and supply.

Macroeconomics
• is the branch of economics that studies the economy as a whole.
is a branch of economics that studies how an overall economy the market or other systems that
operate on a large scale behaves.
Examples of macroeconomic factors include economic outputs, unemployment rates, and
inflation.
 MACROECONOMICS. VS. MICROECONOMICS

HOW DO THEY AFFECT BUSINESS?

Microeconomics focuses on the role consumers and businesses play in the economy, with
specific attention paid to how these two groups make decisions. These decisions include when a
consumer purchases a good and for how much, or how a business determines the price it will
charge for its product. While Positive macroeconomic variables stimulate economic growth and
create financial stability within an economy. They involve an increased demand for products and
services. Positive macroeconomic factors inject more cash into an economy and encourage
industries to expand.