MICROECONOMICS

ECC 122

Shiela L. Fuentes BSENTREP 1C

Exercises/drill
Write a narration of your daily routine where economics is used in your
daily students’ lives.
As a student in the midst of pandemic, I usually earn more money because
the allowance that is given by my parents will be split into half, the half
would go to my little bank in my closet and the half would be the expenses
on my strolling/foods or whenever I want to buy something.
Evaluation
I. Define the following terms.
1. Economics
 The branch of knowledge concerned with the production, consumption,
and transfer of wealth
2. Microeconomics
 A branch of economics that studies the behaviour of individual units
such as households, individuals and enterprises within the economy.
Microeconomics is distinct with the study of Macroeconomics, which
studies the economy as a whole entity
3. Macroeconomics
 The part of economics concerned with large-scale or general economic
factors, such as interest rates and national productivity
4. Scarcity
 Refers to the limited availability of a resource in comparison to the
limitless wants. Scarcity may also be referred to as paucity of resources.
5. Opportunity cost
 In microeconomic theory, opportunity cost is the loss or the benefit
that could have been enjoyed if the best alternative choice was chosen.
As a representation of the relationship between scarcity and choice, the
objective of opportunity cost is to ensure efficient use of scarce
resources.

II. Essay. Explain substantially.

1. Illustrate the circular flow of economy.

 As you can see in the Circulation Flow model the resources, money, and
many other things just flow in that four categories, wherever you start
a business or you are connected to this you will always know that
money, resources, and etc. just flow back and fourth.
2. Give 2 countries for each economic system and feature those country’s
economic status.

 (1)The United States has a mixed economy. It works according to an

economic system that features characteristics of
both capitalism and socialism. Real gross domestic product (GDP)
increased at an annual rate of 4.3 percent in the fourth quarter of 2020,
reflecting both the continued economic recovery from the sharp
declines earlier in the year and the ongoing impact of the COVID-19
pandemic, including new restrictions and closures that took effect in
some areas. (2) The Philippines has a mixed economic system which
includes a variety of private freedom, combined with centralized
economic planning and government regulation. Philippines is a member
of the Asia-Pacific Economic Cooperation (APEC) and the Association of
Southeast Asian Nations (ASEAN). It is expected that GDP for the 1st
quarter of 2021 will remain in negative territory, while the rest of
Southeast Asia will bounce back from recession. President Rodrigo
Duterte's team estimates GDP growth for 2021 would settle between
6.5% and 7.5%,and hit the 8% to 10% range in 2022.
3. Name an economist that different economic eras and explain how they
made impact to the economic thoughts.
Robert E. Lucas, Jr., in full Robert Emerson Lucas, Jr., (born Sept. 15,
1937, Yakima, Wash., U.S.), American economist who won the 1995 Nobel
Prize for Economics for developing and applying the theory of rational
expectations, an econometric hypothesis. Lucas found that individuals will
offset the intended results of national fiscal and monetary policy by making
private economic decisions based on past experiences and anticipated
results. His work, which gained prominence in the mid-1970s, questioned the
conclusions of John Maynard Keynes in macroeconomics and the efficacy of
government intervention in domestic affairs. His work has brought about a
rapid and revolutionary development: the application of the rational
expectations hypothesis, the emergence of an equilibrium theory of business
cycles, and the macroeconometric evaluation of economic policy. Lucas has
also made major contributions to several other fields of economics.