Daniel V.

Deniega
CO1-B
Economic Thinking (Assignment)
1. What is Scarcity?
-Scarcity is used to refer to a gap between in short supply of resources and the many needs that
people expect to be met by the said resource. Therefore, people are forced to decide how best to
allocate a scarce resource in an efficient manner so that most of the needs and additional wants
can be met.
2. What are productive resources?
-Productive resources are the resources required to produce goods and services that people want.
There are three kinds of productive resources:
Human resources - describe both the people who work for a company or organization and the
department responsible for managing resources related to employees.
Natural Resources - These are materials created in nature that are used and usable by humans.
They include natural substances and energy supplies that serve to satisfy human needs and
wants.
Capital – These are goods produced and used to make other goods and services. Basic
categories of capital resources include tools, equipment, buildings, and machinery.
3. What is opportunity cost?
-Opportunity cost is a term that refers to the value of what you have to give up in order to choose
something else. Example: Someone gives up going to see a movie to study for a test in order to
get a good grade. The opportunity cost is the cost of the movie and the enjoyment of seeing it.
4. Why do trade and markets exist?
- Trade and market exist in the reason that they are both connected to each other. Market, a place
by which the exchange (trade) of goods and services takes place as a result of buyers and sellers
being in contact with one another, either directly or through any platform that is available. In
economics trade and market is import because they are the essential part of how a certain thing
or place can be develop and I think that is a reason why do they exist.

5. What is the difference between macroeconomics and microeconomics?

- The difference between them is microeconomics studies individuals and business decisions,
while macroeconomics analyzes the decisions made by countries and governments.
Microeconomics focuses on supply and demand, and other forces that determine price levels,
making it as bottom-up approach and Macroeconomics takes a top-down approach and looks at
the economy as a whole, trying to determine its course and nature.
6. Why are economic models useful to economists?

-An economic model is a simplified version of reality that allows us to observe, understand, and
make predictions about economic behavior. The purpose of a model is to take a difficult, real-
world situation and pare it down to the essentials.

7. What proper order of operations is used while solving simple equations with variables?

- As I remembered, the proper order of operations while solving is the PEMDAS.

P stands for PARENTHESIS

E is for the EXPONENT

M is for the MULTIPLICATION

D is for DIVISION

A is for ADDITION

And lastly, S stands for SUBTRACTION.

8. How does a graph shows the relationship between two variables?

- A scatterplot shows the relationship between two quantitative variables measured for the same
individuals. The values of one variable appear on the horizontal axis, and the values of the other
variable appear on the vertical axis. Each individual in the data appears as a point on the graph.

9. How do you differentiate between a positive relationship and a negative relationship?

- Positive correlation describes the relationship between two variables which change together,
while a negative correlation describes the relationship between two variables which change in
opposing directions.

10. What are the types of graphs?

- Three types of graphs are used in microeconomics:

Line graphs- is a type of chart used to visualize the value of something over time, sometimes it
is useful to show more than one set of data on the same axes.

Pie graphs- A pie graph (sometimes called a pie chart) is used to show how an overall total is
divided into parts. A circle represents a group as a whole. The slices of this circular “pie” show
the relative sizes of subgroups.

Bar graphs- A bar graph uses the height of different bars to compare quantities.