Microeconomics

Module 1
Aeron Simon V. Aguil, BSEntrep 1C, 4/12/21
Exercises/drill
Write a narration of your daily routine where economics is used in your
daily student’s lives.
- Economics affects my daily lives in both obvious and subtle ways. From
an individual perspective, economics frames many choices I have to make
about work, leisure, consumption and how much to save. My lives are also
influenced by macro-economics trends, such as inflation, interest rates and
economic growth. Also economics helps me to think strategically and make
decisions to optimize the outcome and in my course now in college it can
help me also about business planning, marketing, research and
management.
Evaluation
1. Economics- As the efficient allocation of the scarce means of production
toward the satisfaction of human needs and wants. Scarce means as
economic resources such as land, labor, capital and entrepreneurship.
Microeconomics
2. Microeconomics- Branch of economics that deals with the individual
decisions of the economy-firms and household, and how are their choices
determine the relative prices of goods and factors of production.
3. Macroeconomics- Branch of economics that study studies the relationship
among broad economic aggregates like national output, money supply,
government consumption, investment and consumption of the populace in
general.
4. Scarcity- Scarcity Commodity or service being in short supply relative to its
supply. It can be looked into as the limited availability of economic resources
relative to man’s unlimited demand for goods and services
5. Opportunity Cost- Refers to cost of using them in their best alternatives.
II. Essay.
1. Illustrate the circular flow of economy.
-The circular flow of income is a model that depicts how money in an
economy and it has a huge impact on the business cycle. It is divided into
five sectors, individuals, businesses, financial institutions, governments and
international trade and financial flows and all of them have a positive and a
negative impact on the business cycle. The business cycle refers to
fluctuations in the level of economic growth due to either domestic or
international factors. Additionally, the demand and supply graphs allow us
to determine the relationship between the circular flow of income and the
business cycle and how they affect the economy of a country. Therefore, the
circular flow of income has both positive and negative impacts on the
business cycle. The sector labelled individuals consists of all individuals in
the economy, and is concerned with their activities in earning an income,
and spending it on goods and services. These individuals are the consumers
in the economy. They supply factors of production such as labour and
enterprise to business, which they in turn use to produce goods and service.
2. Give 2 countries for each economic system and feature those country’s
economic status.
-The United States has a mixed economy. It works according to an
economic system that features characteristics of both capitalism and
socialism. A mixed economic system protects some private property and
allows a level of economic freedom in the use of capital, but also allows for
governments to intervene in economic activities in order to achieve social
aims and for the public good. The U.S. government controls part of the
economy with restriction and licensing requirements, which includes
involvement in such areas as education, courts, roads, hospital care, and
postal delivery. The government’s role in a mixed economy can also include
financial policies, such as monetary and fiscal policies. For the most part, the
United States has a market economy in which individual producers and
consumers determine the kinds of goods and services produced and the
prices of those products. ... They own buildings and equipment, and are free
to hire workers, and acquire things that businesses use to produce goods
and services. In its most recent January 2021 update of the World Economic
outlook, the IMF has revised its GDP growth projections for the United
States to 5.1% in 2021 and 2.5% in 2022 representing a difference from
October 2020 WEO projections of +2% and -0.4%, respectively.
- The Philippines is a country in Southeast Asia in the western Pacific
Ocean. It is an archipelago made up of 7,106 islands located in relation to
many of Southeast Asia's main water bodies: the South China Sea, Philippine
Sea, Sulu Sea, Celebes Sea, and Luzon Strait. Proximate countries include
Taiwan, Vietnam, and Indonesia. The geography is mountainous with narrow
coastal lowlands. The government system is a republic; the chief of state
and head of government is the president. The Philippines has a mixed
economic system which includes a variety of private freedom, combined
with centralized economic planning and government regulation. Philippines
is a member of the Asia-Pacific Economic Cooperation (APEC) and the
Association of Southeast Asian Nations (ASEAN).The Philippines' economy is
considered as one of the most dynamic economies in East Asia and the
Pacific. In 2020, however, GDP contracted by an estimated 8.3%, due to the
outbreak of COVID-19. Nevertheless, according to the IMF's October 2020
forecast, GDP growth is expected to pick up to 7.4% in 2021, subject to the
post-pandemic global economic recovery. Key economic drivers include solid
fundamentals, a competitive workforce, a stable job market, steady
remittances, and investment in the construction sector (World Bank). In its
most recent January 2021 update of the World Economic Outlook, the IMF
has revised its GDP growth projections for the Philippines to 6.6% in 2021
and 6.5% in 2022 (representing a difference from October 2020 WEO
projections of -0.8% and +0.1%, respectively).
3. Name an economist that different economic eras and explain how they
made impact to the economic thoughts.
- Paul Krugman is one of the most highly respected and well-known
economists in the world. He is a professor emeritus of the Woodrow Wilson
School of Princeton University, a distinguished professor of the Graduate
Center Economics Ph.D program and scholar at the Luxembourg Income
Study Center, both at City University of New York. Krugman’s work in
examining international trade patterns and the global distribution of
economic activity and resources was awarded the Nobel Memorial Prize in
Economic Sciences in 2008. His academic work has focused on economic
geography, international finance and trade, and currency fluctuations. As a
columnist for The New York Times, he has written countless articles on
nearly every imaginable economics topic, including taxation, income
distribution, and liquidity traps. He is credited with pioneering a new trade
theory and a new economic geography through his work. A favorite among
peers in his field, a 2011 survey named Krugman that year’s favorite living
economist under the age of 60. He has also been the recipient of the James
Joyce Award, the EPI Distinguished Economist Award, and the Gerald Loeb
Award for Commentary. Krugman continues to write, commentate, and
critique for various news outlets, and is widely credited for his gift for
masterfully explaining complex economic concepts to the general public.