Identify what is being asked in the following statements.

Choose the best answer in the box.

Scarcity Poverty Incidence Train Law
4P's Build, Build. Build Income
________1. The basic economic problem.
________2. The proportion of Filipinos whose income is not enough to meet even the
basic needs.
________3. A law that corrects a longstanding inequity of the tax system by
reducing personal income taxes for 99% of taxpayers.
________4. A human development measures of the National Government that provides
conditional cash grants to the poorest of the poor, to improve health, nutrition,
and the education of children.
________5. The government's aggressive infrastructure program to jack up
infrastructure and social spending.

Answers to Basic Economic Questions/Problems in a Capitalist EconomyWhat and how

much to produce?How to produce?For whom to produce?� The consumer is regarded as
the king
� The basic objective of the producers is to earn maximum profits
� Producers will likely produce goods and services which would
yield higher profits
� An increase in the demand for a particular
commodity will lead to a rise in its price. A rise in the price, given the cost of
production will lead to more profits� The basic objective of the producers is to
earn maximum profits. � A producer must minimize the cost of production
� The cost of a technique of production is determined by the prices of inputs
and the input prices are determined by price
mechanism in the factor market� Distribution of total output of goods and
services depends upon the distribution of income. � Incomes of different
individuals as determined by price mechanism determines the distribution of goods
and services. � As a result of this inequal distribution of income, the
distribution of goods is also very much inequal.Answers to Basic Economic
Questions/Problems in a Capitalist EconomyWhat and how much to produce?How to
produceFor whom to produce?Technique of production to be used
� The producer chooses that technique of production which is least costly.
� The cheapest way of producing a commodity depends on relative resource prices:
� If labor is relatively cheaper than capital, the producer will adopt a labor-
intensive technique � If capital is cheaper than labor, capital intensive
technique, will be
employed by the producer.� The rich people get a larger share of the national
product.
� The poor people with low incomes, receive a smaller share of the national
product.
Interview your parent/ guardian (preferably people who can recall changes in the
country's economy in the past 5-10 years).
Below are sample questions you may ask:
� Have prices of basic commodities increased in the last 5-10 years?
� How did it affect the consumption of the household?
� Were there significant increases in income/ wages as well? � What significant
economic problem/s was/were present during the day?
What have you observed in the course of the interview? Were the issues then vary
from the present? Explain.