SS Reviewer 1st QT Exam PDF

Why is it important to study economics? (first quiz topics) - In life there is limitations, challenges, and constraints ► ECONOMICS - The answer to these is using a solution: - The scienc...

Why is it important to study economics? (first quiz topics) - In life there is limitations, challenges, and constraints ► ECONOMICS - The answer to these is using a solution: - The science of making choices - Solution: Art of decision making (economics) - The science of human behavior to satisfy unlimited needs and wants using limited resources. 2 TYPES OF GOODS What will you learn in studying economics? - helps students to develop one important 1.) Economic Goods - Things characteristic: INTELLIGENT DECISION that have value or price MAKING 2.) Free Goods - Man get it free in natural form. ►SCIENTIFIC METHOD in ECONOMICS 1. Identify the problem 2. Make assumptions or hypothesis TWO BRANCHES OF ECONOMY 3. Gather data and information 2.) Macroeconomics - 1.) Microeconomics - 4. Test hypothesis an data analysis Man get it free in natural Things that have value or 5. Make conclusions and recommendations form. price - behavior of the - centered in ►2 TYPES OF CHOICES entire economy studying the 1.) Individual 2.) Social - aggregate small unit of the - To satisfy out own - Choices done by activities of the economy. needs + wants the government - government, - individual - Decisions made ot satisfy the industry, and behavior of the by the people needs of society households. consumers, acting separately - whole operations producers, and from one another. of the economy the market - products and services (for ►OPPORTUNITY COST consumer and - refers to the value of alternative given up obtain producer) another item. - value of the object you didn’t choose “Economics” (ex.) You have one hour of free time. You can either play - Greek word, “oikos” means “house” a video game or watch a TV show. If you choose to play - “nomos” means “management” the video game, the opportunity cost is the TV show - “Household Management” you didn't watch. It's what you miss out on when you make a choice. ►TRADE-OFF - when you give up or sacrifice one product for another (ex.) You decide to spend your evening studying instead of hanging out with friends, the trade-off is that you gain better grades (from studying), but you miss out on social time with friends. You give up one thing (time with friends) to get another (better grades). - Trade-off is about choosing between two or more options. - Opportunity cost is about the value of what you didn’t choose.  ►BASIC ECONOMIC PROBLEM (ex.) A manager who quits his job to 1. PRODUCTION 2. DISTRIBUTION pursue his masteral's degree 1. What is the most 1. How to distribute suitable thing to the goods? Chosen: A masteral degree produce? 2. For whom are the Opportunity Cost (value Salary of being a 2. How to produce? goods to be of the alternative given manager - labor-intensive produced for? up): - meaning human (Target Market) resources/labor Trade-off (sacrifice Being a manager (The product or choice): manager gives up his job - capital-intensive to pursue a master’s - meaning human resources/labor degree) 3. How much to produce? ►SCARCITY - government will analyze the population density - is the condition where the resources are limited to satisfy the unlimited needs and wants of people - the reason why people study economics ►ALLOCATION - economics ANSWERS scarcity - Distributing scarce resources to meet different needs Two conflicting conditions in economics: - Mechanism on how solve scarcity 1.) Scarce resources 2.) Unlimited needs and desires Problem: Scarcity = creates scarcity Solution: Allocation ►SCARCITY ►EXPANSION APPROACH - a universal condition (all countries experience) 1. Conservation – wise use of resources - we learn how to maximize the use of resources 2. Investment – addition of capital stock - takes too long to be resolved (oil, minerals, fossil 3. Modern Technology – makes production easier fuels) and faster ►SHORTAGE - lack of supply of goods caused by negative strategies - increase in demand, but not enough supply - takes less time to be resolved (e.g, toilet paper fiasco during covid-19) a. Hoarding - when businesses limits the supply of goods to increase the price b. Cartel - agreement among businesses to control prices and limit competition together c. Panic Buying - people buying more than what they need (2nd quiz topics) Fixed Input - factors of production that cannot be immediately changes in the short run PRODUCTION - is the process of using resources to produce Variable Input goods and services that satisfy the needs and - resource which can be changed easily according wants of individuals and businesses to the desired volume of production. FACTORS OF PRODUCTION 1. Land - encompasses all natural resources used in the production of a good. It includes all natural resources. ‘raw materials’. 2. Labor - all of the work that laborers and workers perform at all levels, except the entrepreneur. 3. Capital - tools and machinery used to produce goods and services. - Financial capital - money spent to buy machinery and other equipment for production. 4. Entrepreneur - a person who has managerial ability and Stage 1: Increasing Returns willingness to accept risks in doing - shows increase in total production as the business. number of Workers increase Stage 2: Decreasing Returns - principle of diminishing returns. Total production increases as workers are added; but the marginal product decreases although still positive Stage 3 Negative Returns - adding more workers will not do any good for production. CONSUMPTION - buying and using goods and services to satisfy our needs and wants - deals with buying and using goods and services to satisfy our needs. - “no consumption, no production” CONSUMER - Refers to a person who purchases and uses PRODUCTION FUNCTION consumer products and services to satisfy his or 1. Law of variable proportions, which explains how her personal needs through direct consumption. marginal output changes as single input becomes varied while other inputs remain constant - “marginal output” means the added output/product when 1 factor/input changes/ > single input changes > other input remains consistent (ex.) > no. of workers increase > land, capital, entrepreneur stay the same.  4. OCCASIONS CHARACTERISTICS of a WISE CONSUMER - Specific events or seasons often drive 1. Alert increased consumption. For example, - Always watchful over his/her holidays like Christmas, or cultural transactions in the market place. celebrations such as weddings, lead to 2. Budget conscious spikes in demand for certain goods. - A wise consumer is not an impulsive buyer. 5. BANDWAGON EFFECT 3. Reasonable - Consumers often follow trends, - Always take into consideration the price influenced by the behavior of others. and quantity of the product. When a product gains popularity, more 4. Not affected by advertisement people are likely to buy it simply - The endoresement of a product by a because others are doing the same celebrity has no effect to a wise consumer. 6. VALUES 5. Analytical - Personal or societal values can drive - The consumer patiently examines the consumption choices. For example, quality, perceivable value and benefits consumers who prioritize sustainability that can be expected of the product. may opt for eco-friendly or ethically 6. Looks for alternatives sourced products, - wise consumer looks for the best alternative that will suit his/her needs. 7. SEASON 7. Avoids panic buying - Consumption patterns also fluctuate with the seasons. Seasonal products, RIGHTS OF A CONSUMER such as winter clothing or summer (Republic Act 7394 “Consumer act of the Philippines”) vacation packages, experience varying demand depending on the time of year 1. Right to basic needs 2. Right to choose 3. Right to security (knowing the condition of the BOOK INFO: product in the market) 4. Right to clean and orderly environment (health 1. Republic Act No. 7394 also known as the and business permits) Consumer Act of the Philippines 5. Right to proper information Thee objectives of the law are: 6. Right to organize (to complain in case of a a. To protect consumers from hazardous products defective product) b. To provide consumers educaiton and information c. To involve consumers organizations in FACTORS INFLUENCING CONSUMPTION policy-making d. To protect consumers from business 1. PRICES malpractices and deception - When prices rise, consumers often reduce their demand, especially for non-essential items. Conversely, lower 2. Republic Act No. 7581 or Price Act prices tend to increase consumption It was approved to ensure that the prices of basic commodities are according to govenrment 2. ADVERTISEMENT pricing especially during the period of calamity. - Advertising influences consumer preferences by highlighting product benefits and creating brand awareness 3. INCOME - A consumer's income level is a primary determinant of their ability to purchase goods.  8. Article 2187, Civil Code of the Philippines (Law on 3. Republic Act No. 71 or Price Tag Law Extra Contractual Obligations) A price tag is a marking attached to products to Producers and processors of products are liable indicate their prices. The Law requires that all goods and for any death or injury suffered by a consumer asa services ready for sale should bear a price tag and result of using their product. display them conspicuously on the product. Expiration dates signifies until when the product is safe to consume, and it is found in the label of the Retailers or sellers of small quantity are required product. to put a price tag on every item or product they are selling so that customers can see the price easily. 9. Article 188, Revised Penal Code (Law on Trademark) Aside from price tags, some establishments use Law that penalizes those who will use the brand, barcodes to reveal the price of products though it is not container, wrapper or trademark of other registered required by the law. products. 4. National Food Authority formerly known as National Grains Authority Presidential Decree (PD) No. 1770 renamed the (goodluck, you can do this!) National Grains Authority (nga) and established the National Food Authority (NFA), broadening the agency’s social responsibilities and commodity coverage, in addition to grains, and other food items like raw or fresh fruit and vegetables and fish and marine, manufactured, processed, or packaged food products. Today, the National Food Authority is bestowed the functions of guaranteeing the food security of the country and the stability of supply and price of the staple grain-rice. 5. Republic Act No. 3740 or Law on Advertising, Labeling, and Branding This law was enacted to protect consumers from fraudulent advertising, mislabeling, or misbranding of any product. Advertising fake products and services is stricctly prohibited under this law. 6. Republic Act No. 6675 or Generics Act of 1988 This law promotes, encourages, and requires the use of generic names in importation, manufacture, distribution, advertising, and prescription of drugs. It also ensures the adequate supply of drugs with the generic name at the lowest possible cost and make them available free for indigent patients. 7. Article 1546, Civil Code of the Philippines (Law on Sales) Defects of products should not be hidden from the consumers. Thos law guarantees that there are no hidden defects in the products.