A. Bonifacio St., Brgy.

Bagong Sikat, Lemery, Batangas

Second Semester
Semi-Finals
_____________________________________________________________________________________

Subject: Economics with Taxation and

Land Reform
Topic: Production Theory
Activity No.: 2

Name : Robert M. Alvarez

Course, Year and Section : BSIT-III

Resources are transformed into goods and services that have considerable value to
consumers. This process is called production. In the production process, these
resources are also referred to as inputs while the goods and services created are
called outputs.

Common reasons cited for business failure include poor location, lack
of experience, poor management, insufficient capital, unexpected
growth, personal use of funds, over investing in fixed assets and poor
credit arrangements. Yet, not all businesses close due to business
failure. Sometimes even a profitable business decides to close its
doors.

1. Explain why some

businesses close as fast
as they open in relation to
production.

B because consumers prefer the cheaper product with almost the

2. Given two choices- A
same effect as the expensive product.

and B- and A is more

expensive than B, but
both can do job, explain
which one is more
preferable to use and
explain why.