Economics Chapter on Markets, Demand, and Supply

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Questions and Answers

What is the minimum wage for the non-agriculture sector?

₱610.00

What is the minimum wage for retail/service establishments employing 15 workers or less?

₱573.00

Tax is the _____ of the government.

life blood

The minimum wage in the agriculture sector is higher than that of the non-agriculture sector.

False Signup and view all the answers

What defines a market?

An interaction between buyers and sellers of trading or exchange. Signup and view all the answers

Which market is where workers offer services and look for jobs?

Labor market Signup and view all the answers

What is the supply function in a market?

A mathematical expression that expresses the relationship of quantity demanded and price Signup and view all the answers

The Law of Demand states that as price increases, the quantity demanded for that product increases.

False Signup and view all the answers

What does ceteris paribus mean?

All related variables except those being studied are held constant. Signup and view all the answers

What will cause a demand curve to shift?

Change in consumer preferences Signup and view all the answers

What is the formula for the demand function?

Qd = 120 - 4P Signup and view all the answers

A shift in the demand curve indicates a change in the quantity demanded due to a change in price.

False Signup and view all the answers

What does the equilibrium price represent?

The price at which quantity demanded equals quantity supplied. Signup and view all the answers

The formula for the supply function is Qs = ______ + 6P.

-126 Signup and view all the answers

Which statement is true regarding the Law of Supply?

As price increases, the quantity supplied also increases. Signup and view all the answers

What is the role of the money market?

It facilitates the trade in short-term loans between banks and financial institutions. Signup and view all the answers

Which of the following is NOT a determinant of demand?

Cost of production Signup and view all the answers

What is the current population of the Philippines as of September 2024?

116,010,975 Signup and view all the answers

Which market structure is characterized by many sellers and product homogeneity?

Perfect Competition Signup and view all the answers

Study Notes

Markets

A market is the interaction between buyers and sellers.
Goods markets are common as they are where consumer goods are bought.
Labor markets are where workers offer services and employers hire.
Financial markets include stock markets, interbank markets, the money market, the bond market, and foreign exchange markets.

Demand

Demand is a consumer's willingness to buy a good at a given price.
The income effect occurs when a price change affects a consumer's purchasing power.
The substitution effect occurs when a price change leads consumers to buy substitutes.
The law of demand states that as the price of a good increases, the quantity demanded decreases, ceteris paribus.
Non-price determinants of demand include:
- Income
- Taste
- Expectations
- Prices of related goods
- Population

Supply

Supply refers to the quantity of goods a seller is willing to offer for sale.
The law of supply states that as the price of a good increases, the quantity supplied increases.
Non-price determinants of supply include:
- Cost of production
- Technology
- Availability of resources

Equilibrium

Equilibrium is a state of balance where supply and demand are equal.
Equilibrium price is the price at which demand and supply are equal.
Equilibrium quantity is the quantity of goods that both buyers and sellers agree to transact at the equilibrium price.

Market Structures

Competition is rivalry between sellers in a market.
Perfect competition features:
- Large number of buyers and sellers
- Homogeneous products
- Perfect mobility of resources
- Perfect knowledge of market conditions
- Price determined solely by supply and demand
Imperfect competition features products that are not identical.
- Monopoly: A single firm sells a product with no close substitutes.
- Oligopoly: A market dominated by a small number of firms.
- Monopolistic Competition: Products are differentiated, entry and exit are easy.

Philippine Economic Problems

Labor supply refers to the population aged 15 or older willing and able to work.
The unemployment rate in the Philippines was 3.9% in June 2024.
The Philippines has a significant number of overseas Filipino workers (OFWs), estimated at 2.2 million in 2019.
The Philippine peso exchange rate impacts the economy.
Savings refer to setting aside income for future use.
Investment is the accumulation of capital for future production and consumption.
Rent is the payment for using land or buildings.
Wages vary depending on the industry sector.
Taxes are crucial for government revenue.

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Description

This quiz covers fundamental concepts in economics related to markets, demand, and supply. Examine the definitions, laws, and effects impacting buyers and sellers in various market types. Test your understanding of key economic principles and the factors influencing consumer behavior.