Carlo Junelle R.

Cabral BSBA-MKT MGT-

12M2

ACTVITY #1

1. How will you define microeconomics?

Microeconomics is the study of the behavior of individuals and organizations in making

decisions about the distribution of scarce resources, as well as the interactions between these
individuals and firms. It generally pertains to markets for products and services and addresses
both personal and economic concerns. Furthermore, microeconomics does not attempt to
explain which actions should be taken in the market, but rather the consequences of changes in
given conditions. Microeconomics, for example, can assist a company in maximizing its
production and capacity in order to offer cheaper pricing while remaining competitive.

2. What is the difference between “wants” and “needs”?

Wants and needs can both be generally viewed as psychological elements that influence
human behavior. However, needs can be distinguished from wants based on their level of
importance. Needs are items that are necessary for life and do not alter over time, such as
shelter, food, and clothing. Wants, on the other hand, are objects that a human desire now or in
the future. In a nutshell, needs are regarded as essential to our existence and well-being,
whereas wants are goods and services that an individual desires as part of his caprices.

3. What do you think are the major concerns of the economy and how it will benefit the
consumer?

Inflation, I believe, is the most serious economic concern because it affects practically every
country. In general, inflation occurs when prices rise as a result of rising production expenses,
such as raw materials and salaries. The economy may suffer if inflation becomes too high.
Conversely, if inflation is kept under control and at normal levels, the economy may thrive,
resulting in decreased inflation and increased employment. As a result, customers will benefit
from having more money to spend on products and services, and the economy will prosper and
grow.

4. What is the contribution of Full employment and Full production to the economy?

Having full employment and full production in a country brings growth to their economy
because it will not cause any major problems such as inflation, scarcity, or poverty. These two
factors have a relationship since full employment of labor results in full production of output. If
the economy is at full employment and all workers are working, the level of production will be
increased further, which leads to GDP growth. Also, this will improve economic growth, which
enhances the standard of living by lowering costs and raising wages.

5. What do you think is the effect of globalization on the economic growth in the
Philippines?

Globalization has had a wide-ranging impact on the Philippine economy. It improved

money flows and financial integration by opening the market to foreign trade. It increased
worker mobility and reduced the burden of inflation. As a result, globalization benefits the
country's economic growth and employment. Trade openness and foreign portfolio movements,
in particular, have contributed to stronger per capita GDP development in the Philippines.

6. What do you think is the reason for the continuous inflation of goods and services,
and how should it be addressed by the government?

I think that the main reasons for continuous inflation in goods and services are an
increase in the availability of money within an economy and an increase in consumer demand in
the market. When demand rises, the price of goods and services rises as well. As a result, the
government should utilize fiscal policy to address inflation, either by raising taxes or lowering
spending. Increasing taxes reduces individual demand and reduces the quantity of money in the
economy.