• BASIC MICROECONOMICS TASK •

Answer the following questions:

a) What is Economics?
➢ Economics is a social science that analyzes the decisions that people, firms, governments,
and entire society make in the face of scarcity, as well as the incentives that impact and
reconcile those decisions. When personal choices are joined collectively, they result in social
decisions.
➢ It is the study of the production, distribution, and consumption of commodities and services. It
is concerned with the behavior and interactions of economic agents as well as the operation of
economies.
➢ The study of how humans use their limited resources to satisfy their boundless desires.
b) What are the 10 Principles of Economics?
➢ How individual make economic decision
1. People face tradeoffs
2. The opportunity cost of something is what you give up to gain it
3. Rational people think at the margin
4. People respond to incentives
➢ How people interact with each other
5. Trade can make everyone better off
6. Markets are usually a good way to recognize the economy
7. Governments can sometimes improve market outcomes
➢ Economy is a whole
8. A country’s standard of living depends on its ability to produce goods and services
9. Prices rise when the government prints too much money
10. Societies face a short-run trade-offs between inflation and unemployment
c) What three major problems confront the field of Economics? Why are these problems crucial to the
sustainable development of a country like the Philippines?
➢ What to produce?
• Each economy should decide what products and services to provide, as well as the
qualities of the commodities. Consumer and producer decisions interact to determine how
society's limited resources will be used. In a market system, purchasers make the majority
of the decisions, acting in their best interests to meet their requirements. For example, if
mobile phones are in high demand, firms will profit from producing and selling them. It is
hardly worth creating radio sets if no one wants to buy them. If a producer develops an
item that purchasers do not buy in large quantities, there will most likely be insufficient
earnings. To fit consumer preferences, the producer will need to improve the service
performance and modify it.
 ➢ How to produce?
• A product can be manufactured using a variety of ways. Bags, for example, can be made
by hand or by a vending machine. Vending machines demand more power and capital
investment than handicrafts, which takes more time and work. As a result, society must
choose between several methods of producing the item. Similarly, identical decisions are
required for all commodities and services. Furthermore, the decision is influenced by the
availability and cost of certain production elements. Typically, a society chooses a strategy
that makes the best use of its given resources.

➢ For whom to produce?

• It entails determining who will be the final purchaser of the goods or services produced.
Every good supplied is made for a certain segment of society since no product can satisfy
all social groups owing to disparities in consumer purchasing power. Inequality in the
allocation of money can be observed in society, resulting in a difference in the consumer's
paying ability. For example, graded rice is produced for those with higher purchasing
power, but non-graded rice is produced for persons with lesser purchasing power. Luxury
products and services are reserved for the wealthy. Final products and service allocation is
based on the same principles as how money is distributed among the producing elements
(land, labor, capital, entrepreneurship)

➢ The three economic problems are vital for the Philippines' sustainable development because they
have an impact on daily life, have the potential to alter the development process, and help Filipinos
have a better quality of life. If we can find a solution to this issue, it would be possible to achieve
economic development, which accesses more and better job possibilities and boost everyone's
financial stability. It is possible to produce high-quality goods and advance toward sustainable
development if we, as consumers, optimize our actions by having an unbounded desire.
d) Distinguish the 2 major fields of Economics? Cite three news articles as examples in distinguishing
the 2 major fields of study. Label these articles as to what specific economic activity is being highlighted.
➢ Microeconomics and Macroeconomics are the two major branches of economics. Microeconomics
is the field of economics concerned with the choices made by individual decision-making units in
the economy—typically consumers and firms—and the implications of those decisions on particular
markets. Macroeconomics is the field of economics concerned with the influence of decisions on
the whole, or aggregate, amount of economic activity.

➢ News Articles in Microeconomics

• Filipino wallets in hot oil as onion, garlic prices might go on the rise (Yahoo News,
September 1, 2022) (Production)
• Maya Bank hits P5B in deposits, over 650,000 customers in three months (Business World
Online, September 15, 2022) (Exchange)
• Small retailers welcome to lower sugar price to P70/kilo (Philippine News Agency,
August 25, 2022) (Distribution)
 ➢ News Articles in Macroeconomics
• Philippine GDP slows to 7.4% in Q2 2022, spoiled by inflation (Rappler, August 9,
2022) (Production)
• PHL manufacturing growth slows in July (Business World Online, September 9, 2022)
(Production)
• National budget seen to benefit from peso depreciation (Business World Online,
September 15, 2022) (Exchange)

e) Why is Economics considered an elite course in other nations?

➢ In my opinion, the reason why Economics has become a prestigious subject in other countries is
because privileged individuals are more likely to have the financial means, social position, and
intellectual capacity to manage the economy. They will learn and practice critical thinking and
problem-solving techniques in economics since, in the majority of cases, it is they who will function
as future change agents and leaders. Being a part of a huge group with a share of authority or
influence makes it simple for them to comprehend individuals, organizations, markets, and
governments and to react more effectively to the challenges and possibilities that arise when
conditions alter in the future.
f) With the BS Economics being quantitative in all of its curricular offering, would you venture taking it?
Why?
➢ Yes, if I want to pursue a double degree, I want to get a BS in either economics or accounting once
I finish my studies. Even though they are both business-related courses, finance and economics
have different scopes and ideas. Studying economics will undoubtedly be helpful to me in the
future because it will improve my ability to think critically, solve problems, and use numbers. If I
start my enterprise, economics will be an effective instrument for me in the future as it will teach me
how to think strategically and make decisions to optimize the result.

Prepared by: Lian Joy L. Cervantes

BSBAFM 1A ( BU-CBEM)