Gacias Ramil Jr G.

FMGT 2-C

Midterm Examination

1. Describe what a supply schedule is and give an example by using the pattern given during our class
discussion on this topic and explain why is it so?
Supply schedule- is a schedule listing the various prices of a product and the specific quantities
supplied at each of these prices.
Hypothetical Supply Schedule for Olive Oil per Month

Situation Price( P) Quantity(Liter)

A 5 20

B 4 18

C 3 16

D 2 14

E 1 3

As per the law of supply, that is, keeping other factors constant, an increase in price results in an
increase in quantity supplied, thereby depicting the fact that from top to bottom as indicated above -as the
price goes high so does the quantity supplies. To give an Illustration, prices of 5 entails having 20
quantity supplied produced on one hand, prices of 1 entails having 3 quantity supplied produced on the
other hand.

2.Briefly discuss each of the basic problems of an economy, which arise from the central problem of
scarcity of resources. If you were a manufacturer, would you consider them in producing your
products. Why or why not. Explain your answer.

Three fundamental and interdependent economic problems are indicated as follows

1. What to produce and how much- This is a decision on what goods and services to produce and their
quantities. This would depend on what is needed, what is wanted, and what has to be produced.
2. How shall goods be produced? This is a decision of what resources are to be used in production, by
whom the goods will be produced, the technological manner in which production will take place.
3. For whom shall goods be produced- This question is now on the problem of distribution. Who will
benefit from the production of goods and services? How much of total production will each customer get.
Will the goods be bought by the rich or the poor?
In view of the fact that were it not for the customer the firms wouldn’t have progressed. So therefore
yes certainly that all of the aforementioned problems would I have taken into account. Customer drives
the industry seeing as they consume the specific commodity. Thus taking into account for whom shall be
produced plays a vital role for the firm per se. If I didn’t take into account for whom shall I produced the
product, I totally would have forgone the cost incurred in production considering I didn’t catch
consumer’s taste and therefore the product consumption or the product demand will dwindle.
Having said that, consumer’s taste really had great an impact on firms, considering consumer taste
entails having some product to produce. And as far as profit is concerned, it would be better to take into
account how shall goods be produced, better machineries account for boost production thus having an
advance machineries is of important
3. Based on your own understanding of Marlow’s hierarchy of needs. Illustrate it correctly showing
the levels of hierarchy and give examples for each level of the hierarchy

Self -Actualization Needs

Self- fulfillment,
realizing full
potential

Love and Belongingness Needs

Friendship, trust, intimacy,
acceptance,

Safety Needs
Protection from elements, security, order, law and stability

Physiological Needs
Air, food, water, shelter clothing, warmth, sex and sleep
4. Describe what a demand schedule is. Support your answer with an illustration to clearly understand
it.
Demand Schedule- is a table that shows the relationship of prices and specific quantities demanded at
each of these prices.
Hypothetical Demand Schedule for olive oil per month

Situation Price( P ) Quantity ( liter)

A 8 1

B 6 2

C 3 4

D 1 10

5. Distinguish price elasticity of demand from price elasticity of supply and give its corresponding
formulas.
Price Elasticity of Demand, on one hand, is a responsiveness of consumer’s demand to change in price
of the good sold.

Price elasticity of supply, however, refers to the reaction or response of sellers or producers to price
changes of goods sold.