Economics Study on Adam Smith
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Questions and Answers

What does the equation $GDP = C + I + G + (X - M)$ represent?

  • Factors contributing to unemployment
  • Relationships among economic variables (correct)
  • Consumer behavior analysis
  • Monthly investment projections

    • What aspiration do Filipinos hold regarding their quality of life?

  • To rely solely on foreign investments for prosperity
  • To have a life that is precarious and uncertain
  • To achieve a life that is rooted, comfortable, and secure (correct)
  • To eliminate all forms of economic planning

    • What impact did the COVID-19 pandemic have on socio-economic achievements?

  • It rolled back some economic gains and exposed fragility (correct)
  • It led to increased consumer spending
  • It eliminated all unemployment in the country
  • It improved per capita income significantly

    • Which of the following is necessary for economic recovery as per the content provided?

    <p>A coherent Plan for Economic and Social Transformation</p> Signup and view all the answers

    What does the unemployment rate formula represent?

    <p>The proportion of unemployed individuals in the labor force</p> Signup and view all the answers

    What often governs rental costs through a contract between the lessor and lessee?

    <p>A contract that includes the option of renewal</p> Signup and view all the answers

    Which of the following factors can drive changes in rent?

    <p>Real estate prices and location</p> Signup and view all the answers

    What is one of the challenges facing Filipino entrepreneurs due to higher wages?

    <p>Lower profit margins</p> Signup and view all the answers

    What is the first financing option mentioned that an entrepreneur can consider?

    <p>Using one’s own funds</p> Signup and view all the answers

    What act was enacted by the Philippine Congress to establish a mechanism for minimum wage determination?

    <p>Wage Rationalization Act</p> Signup and view all the answers

    Which issue has significantly affected health care and education in the Philippines?

    <p>The scarring from the pandemic</p> Signup and view all the answers

    What can result from heavier foot traffic in a business area?

    <p>Higher rent but potentially more exposure</p> Signup and view all the answers

    What is required for an entrepreneur if the mandated minimum wage increases?

    <p>Adjustment of business costs</p> Signup and view all the answers

    What is the primary basis for imposing Percentage Tax according to the National Internal Revenue Code?

    <p>Being exempted from Value-Added Tax with gross annual sales not exceeding PhP 550,000</p> Signup and view all the answers

    Which tax is classified as an indirect tax that may be shifted to the consumer?

    <p>Value-Added Tax</p> Signup and view all the answers

    What is a characteristic of the Law of Demand?

    <p>As price increases, demand decreases</p> Signup and view all the answers

    What range of percentage tax applies to specific industries and businesses?

    <p>3% to 15%</p> Signup and view all the answers

    Which of the following is NOT a component of demand?

    <p>Supply restriction</p> Signup and view all the answers

    What type of tax is the corporate income tax primarily classified as?

    <p>Direct tax</p> Signup and view all the answers

    What must be assessed when determining if an entity pays Percentage Tax?

    <p>Gross annual sales but not exceeding PhP 550,000</p> Signup and view all the answers

    What are national taxes filed at the regional offices of the Bureau of Internal Revenue?

    <p>Personal income tax</p> Signup and view all the answers

    What is the primary problem that scarcity presents in economics?

    <p>Resources are finite and limited.</p> Signup and view all the answers

    Which factor of production is classified as a man-made resource?

    <p>Capital</p> Signup and view all the answers

    What is an opportunity cost?

    <p>The value of the next best alternative that is forgone.</p> Signup and view all the answers

    In the Circular Flow Model, which group provides labor and resources to the factor market?

    <p>Households</p> Signup and view all the answers

    What do laissez-faire policies advocate regarding government involvement in the economy?

    <p>Minimal government interference in business operations.</p> Signup and view all the answers

    Which of the following correctly describes the relationship between scarcity and economics?

    <p>Economics arises from the existence of scarcity.</p> Signup and view all the answers

    Which basic economic question addresses the issue of resource allocation?

    <p>How to produce?</p> Signup and view all the answers

    When choosing between walking and riding in a car to school, what type of economic concept is being demonstrated?

    <p>Opportunity cost</p> Signup and view all the answers

    What happens at the market equilibrium?

    <p>Quantity demanded is equal to quantity supplied.</p> Signup and view all the answers

    A price floor typically results in which of the following?

    <p>A surplus of goods.</p> Signup and view all the answers

    How do advancements in technology affect market forces?

    <p>They reduce the cost of production, increasing profitability.</p> Signup and view all the answers

    What role do substitutes play in demand?

    <p>They fulfill similar needs as another good.</p> Signup and view all the answers

    What happens when producers expect a surge in factor prices?

    <p>They increase production before higher input costs take effect.</p> Signup and view all the answers

    What is the effect of income on demand?

    <p>Increased income drives consumers to purchase more goods.</p> Signup and view all the answers

    In relation to other goods, how might manufacturers adjust their production?

    <p>They prioritize production as prices of certain products rise.</p> Signup and view all the answers

    What could be considered a government policy affecting the quantity supplied?

    <p>Subsidies provided to producers.</p> Signup and view all the answers

    Which of the following statements about complementary goods is accurate?

    <p>They are generally consumed together.</p> Signup and view all the answers

    What market condition results from a price ceiling?

    <p>A shortage of goods in the market.</p> Signup and view all the answers

    Study Notes

    Adam Smith and Economic Principles

    • Advocated for laissez-faire policies, promoting minimal government intervention in the economy for business and societal benefit.
    • Increased production of one good requires a decrease in another due to limited resources.

    Scarcity and Opportunity Cost

    • Scarcity arises from finite economic resources, defining the central problem of economics.
    • Factors of production include land (natural resources), labor (efforts and skills), capital (man-made resources), and entrepreneurship (management of production).
    • Opportunity cost refers to the value of the alternative forgone when a choice is made.

    Circular Flow Model

    • Households supply labor and resources to the Factor Market in exchange for wages, while businesses utilize these resources to produce goods and services in the Product Market.
    • The cycle involves households purchasing goods and services, facilitating continuous economic activity.

    Basic Economic Questions

    • Determines what and how much to produce and for whom.
    • Economic decisions impact lifestyle aspirations, reflecting the Filipino goal of comfort and security (matatag, maginhawa, at panatag).

    Economic Data and GDP

    • GDP formula: GDP = Consumer Spending + Investment + Government Spending + (Exports - Imports).
    • Trends in poverty reduction and per capita income improvement can be disrupted by crises such as the COVID-19 pandemic.

    National Governments and Public-Private Partnerships

    • The Mandanas-Garcia Ruling in 2018 significantly changed governance in the Philippines.
    • Increased private sector participation can effectively allocate public resources for human capital investment.

    Challenges for Entrepreneurs

    • Investment and financing can come from personal funds or external sources, impacting operational stability and growth.
    • Minimum wage laws establish government-mandated pay levels which affect business expenses and profitability.

    Taxation Insights

    • Income Tax: Paid at the municipal/city level for personal income or corporate entities depending on business structure and income.
    • Value-Added Tax (VAT): Indirect consumption tax applicable to the sale of goods/services in the Philippines.

    Supply and Demand Dynamics

    • Law of Demand: Describes consumer behavior—quantity demanded (Qd) varies inversely with price (P).
    • Market Equilibrium occurs when quantity supplied (Qs) meets quantity demanded (Qd).

    Market Forces and Movements

    • Factors influencing market forces include technological advancements, input prices, and price of related goods.
    • Producer expectations and government policies greatly affect supply decisions.

    Determinants of Demand

    • Income changes can increase consumer purchasing power.
    • Substitutes satisfy similar needs, while complementary goods are typically consumed together.

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    Related Documents

    Economics Q1 PDF

    Description

    Explore the fundamental principles of economics put forth by Adam Smith, including his views on production limits and laissez-faire policies. This quiz will delve into the impact of government involvement on business and societal well-being, highlighting the balance necessary in economic decisions.

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