APPECO LESSON 2 Flashcards
Basic Economic Problems of the Country (4)
I. What to Produce?
II. How to Produce?
III. For whom to Produce?
IV. What provision/laws should be made for economic growth?
If there is scarcity of goods in a society, the firms have to make wise decision
on what goods/service should be produced & determine the quantity to be
produced.
I. What to Produce?
For example, which do we produce more, masks or canned goods? But we
need capital goods like machines, or consumer goods like laptops. The society
must decide the type & quantity of good/service to be produced to meet the
immediate needs of the society.
I. What to Produce?
The production of goods or services needs effective methods & processes
II. How to Produce?
For example, you can produce PPEs using sewing machines; sardines using
aqua resources like fish & land resources like tomatoes. The production
requires more labor & capital investment.
II. How to Produce?
The society would always consider the immediate beneficiary of the goods.
III. For whom to Produce?
For example, when we produce masks & PPEs we suppose to produce first
these for the frontliners of COVID Pandemic fight. A society decides on the
distribution of the goods & services among the members of society who need
them the most.
III. For whom to Produce?
A society uses all its resources for current consumption. If a society sues all its
resources, then its production capacity will not increase. The standard of living
of the people & the income of the workforce remain constant until the standard
of living will decline in the future. The society must decide also on the part of
the resources to be saved for future progress
IV. What provision/laws should be made for economic growth?
____ ____ seeks to solve the problems on scarcity. This happens
when human wants for goods & services exceed the available supply. In a modern
economy, it is evident that a division of labor happens when people earn income by
specializing in what they produce. They will use that income to purchase the products
they need or want every day (BC Campus 2020).
Applied Economics
Also, in the division of labor, it allows workers & firms to produce more. These are
because: (3)
a) Agents focus on areas of advantage due to natural factors & skill levels;
b) The agents learn & invent;
c) The agents take advantage of economies of scale
Division & specialization
of labor only work when individuals can purchase what they do not produce in
markets. Applied economics then helps you understand the basic problems
facing the world today. It helps you become a well-rounded thinker. & most
importantly, it prepares you to be a good citizen.
c) The agents take advantage of economies of scale.
____ can be a tool to solve economic problems on the production of
goods & services.
Economics
____ is the process by which resources are transformed into useful
forms.
Production
____ are things provided by nature that can be used directly or
indirectly to satisfy human needs.
Resources
Strategic options decisions to economize the problems include: (8)
o Economic growth – ability to produce goods & services.
o Reduce Expectation – reduce our wants- lessening consumption
o Improve the use of resources – use our existing resources wisely
o Don’t waste the limited resources
o Productive efficiency
o Allocate efficiency
o Full employment & equity of resources
o Reduce expectations – Reducing wants
