Module 1 - Review Question
Module 1 - Review Question
Economics is a social science concerned with the production, distribution, and consumption of goods
and services. It studies how individuals, businesses, governments, and nations make choices about how
to allocate resources.
Studying economics provides one with not just an understanding of human behaviour, but also
cultivates in students the problem-solving, analytical, communication and persuasion skills that are
critical for success in today's job market.
1) It makes us understand the real world conditions and then go through logical analysis.
2) It helps us understand and appreciate how business, individuals and government arrived at their
decisions.
3) It helps us to understand how the different economic system allocate its resources and used it
efficiently.
Market Economy – The basic characteristic of this economy is that decisions as to the basic economic
problems are determined by the two most important units of the society these are the buyers and
sellers of goods and services. The system depends on prices set by the conditions of demand and supply.
Competition is supreme; there is consumer sovereignty, and the price of the good is the guiding factor
for producers to know what to produce and how much to produce.
The Command Economy or Communistic Economy – In this type of economy the basic economic
problems faced by the economy is solved by the state or the central planners of the government. We
can say that this is a planned and dictated economy wherein then different factors of production are
control and manage by the central authorities.
Socialistic or Welfare economy – This type of economy takes into consideration the contribution of
labor to production. it is called the Welfare economy because it acknowledge the participation of labor
in the production of goods and services thus they should share in the profit or benefits the economy or
the business firms gets from the distribution of this goods and services. The different factors of
production are usually control and managed by the labor sector because they are the dominant factor in
the production of goods and services which encompasses a greater percentage of the population.
D.) Why is there a need to economize? How do you intend to practice economizing habit?
Economizing of resources means making the best possible use of resources. It is necessary that
the available means of the society must be used in the best possible manner, so that the
maximum satisfaction may be achieved.
I will apply the concept of economics in my everyday transactions.
- In what quantity?
-How much?
-What are the equipment, raw materials and machineries needed to produce a certain
product or services?
-What production process, method, and technique to use in the production of such
product or services?
Monopolistic Competition)
4. Economic Growth – How are we going to increase the production and distribution of goods and
services to meet the growing needs of the economy? (Mass production, Specialization, Technology, and
out expansion)