Economic Development

Subject: AEC401_Economic Development
Instructions: This is a 50-point graded activity. Please make your answers brief,
complete, direct, and responsive to the questions.
1) What is the cause of economic problems? Explain (10 pts.)

The economic problem refers to the uncertainties that the economy is having a
hard time complying with or providing. In the demanding and competitive environment
of economics nowadays, it is inevitable to encounter such problems, the most prominent
problems are the unlimited wants and needs of humans that eventually result in scarcity
of resources.
As our population increases, our population faces difficulties to fill those wants
and needs, remember, want and needs will never come to end. Since there are lots of
people, our economy needs to accommodate those with our little supply, with the little
supply yield to deprivation and worse economic failure. The uneven supply and demand
became a problem for our economy. For instance, from a simple need of having rice, it
will evolve into having a different variety of rice—sticky rice, sushi, and such. The
unlimited wants and needs of humans cannot be accommodated by low to no resources.
With all the demands, it is indeed obvious to meet such insufficiency and the level of
satisfaction of the state is low.
2) Briefly explain the following goals of economics: (10 pts.)

a. Promote economic efficiency
With the scarce resource that our economy face, working with effectiveness is
not only enough, but to work with such efficiency is a must. The economy should
have the ability to maximize all of its resources to produce a quality product. It
also involves the right execution and utilization of the economy to take advantage
of the advancement of technologies. To work with minimal effort but produce an
excellent output is the essence of economic proficiency.
b. Attaining a high level of economic growth

Growth is one of the aims of our economy, with the incremental factors that
our economy face, it is necessary for our economy to meet and comply with such
demand. Demand cannot meet if the individuals consisting in our economy are
not at the best fit to perform that is why to address the attainment of growth, the
economy should have been able to deal with the scarcity and work with more
efficiency. Once an economy is able to work with efficiency it corresponds to the
improvement of individuals to have skills that will contribute to the betterment of
our state. But to create growth, the state, and the law should work in
synchronization, The government will provide opportunities, expand the field, and
discover areas that would be applicable to individuals. And the individual, on the
other hand, would acquire all those opportunities, and serve as a driving force for
our economy.
3) Compare the socialist economic system and market economic system in terms of
advantages and disadvantages. (10 pts.)
In the bottom line, Socialism is known to have equity—equity that the state
provides in accordance with its means. On the other hand, the Market, allows the
individual to have freedom in acquiring their needs and wants.
From the said definition, it carries its own set of advantages and disadvantages. Despite
being controlled by the government, it makes sure that the community is part of the
resources of the economy even though there is an absence of contribution from others.
They receive equity, from the controlled resources that they receive, and the state was
able to minimize the deprivation and support all of the individuals. Since there are
individuals who cannot provide, the state prohibits such discrimination because, in their
eyes, they are one. If an individual is contributing then it is praised by the government,
but if someone takes the initiative then the way of giving rewards to such an individual is
through monetary means.
However, since the government is known to be the controller, it is inevitable for

the individual to depend on them, exceeding beyond the expectation is discouraged,
because it breaks the essence of equity. Since it discourages to have competitiveness,
they are prone to being stagnant, such changes greatly affect the backbone of the
economy, thus, believe that relying on what they currently have is the best for them.
On the other hand, in a market economy, they have the means to gamble in means of
prices causing a great benefit for the businesses. They move with such efficiency and
produce effective outputs that the state enjoys. They hone and embrace the innovation
and competitiveness of the individuals as it yields more growth.
Yet, one of the downsides of the Market Economy is that people tend to neglect
their primary needs, they do not minimize poverty, increments inequality, and might
provoke discrimination.
4) Differentiate a mixed market economy from a pure market economy. (10 pts.)
From the definition itself, a mixed economy consists of f different economies,

primarily the market and demand. Since it balances the different factors of other
economies, it provides different satisfaction to the state depending on what they are
trying to provide. They have the ability to be free, and to have their needs and wants
without the intervention of the government, equality, and equity can be achieved as
individuals are given chances to be driven by their self-interest. Among the few of the
many benefits that the Mixed Economy can provide, it is a must for them to act within the
proximity of the law, or else the government would intervene and stop such function.
A mixed economy from the definition itself consists of different economies, primarily the
market and the command. From the nature of its combination, it is preferred by many
since it has fewer restrictions from the government but is still mandatory to abide by the
proximity. More freedom to run the business as long as it is ethical.

On the other hand, Pure Market Economy is just like the Mixed Economy, their
main distinction is that Pure Market Economy is not subject to more variation in running
the economy compared to the Mixed Economy. The main essence of a pure Market
Economy is the allocation of its resources. The mixed Economy has the tendency of
working on its own while the Pure Market Economy usually resorts to the majority.

Thus, to see The Pure and Mixed in a simpler context, Pure Market Economy
clearly relies upon the free market, while the Mixed Economy is a presence of the
market, but the government is an essential part of it and has the power to intervene.

5) Explain why most of the economies in the world today adopt a mixed market economic
system. (10 pts.)
The nature of the Mixed Market Economy, carries a lot of advantages, making it
more preferable to the majority. It grants the state to acquire different opportunity and
strengthen its growth and freedom of the state. They are also exposed to the promotion of
efficiency that yields an effective output. Aside from that, it gives the individuals a
barrier or security in means of way of living and subsequently more.
With the benefits that it carries, it provides a quality of life, while they are letting
their members grow and have freedom, they are still able to monitor and give sanctions if
they are acting in an unlawful and unethical way.

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Subject: AEC401_Economic Development

1) What is the cause of economic problems? Explain (10 pts.)

2) Briefly explain the following goals of economics: (10 pts.)

b. Attaining a high level of economic growth

However, since the government is known to be the controller, it is inevitable for

From the definition itself, a mixed economy consists of f different economies,

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