RENCONADA, JESSA R.

BSHRM 3B

ASSIGNMENT #3

Reflective analysis in which the principle of invisible hand appears

The invisible hands, it is refers the unseen mechanism that maintains

equilibrium between the supply and demand of resources. Invisible hand it
is a theory of economics that refers to the self-regulating nature of the
market place in determining how resources are called allocated base on
individual acting in their own self- interest. And it explains that an individual
decision in a market economy to benefit them will actually make the
economy better off as whole. The concept of invisible hand has been
praised as well as has faced severe criticism. On analyzing the free market
various strengths and weaknesses Example a firm was charging a very
high price for RICE 55 pesos per kilo. These creates an incentive for
another store to sell at a lower price, say 45 pesos, consumers will then
switch from the higher cost of rice to the lower cost to the other store

Base of Smith's theory of the invisible hand constitutes the basis of

his belief that large-scale government intervention and regulation of the
economy is neither necessary nor beneficial. Smith put forth the notion of
the invisible hand in arguing that free individuals operating in a free
economy, making decisions that are primarily focused on their self-interest
logically take actions that benefit society as a whole, even though such
beneficial results were not the specific focus or intent of those actions.
RENCONADA, JESSA R.
BSHRM 3B

ASSIGNMENT #4

Position Paper: Price Control Law

The reason most economists are skeptical about price controls is that
they distort the allocation of resources, economists may not know much,
but they do know how to produce a shortage or surplus. Price ceilings,
which prevent prices from exceeding a certain maximum, cause shortages.
Price floors, which prohibit prices below a certain minimum, cause
surpluses, at least for a time. Suppose that the supply and demand for
wheat flour are balanced at the current price, and that the government then
fixes a lower maximum price. The supply of flour will decrease, but the
demand for it will increase. The result will be excess demand and empty
shelves. Although some consumers will be lucky enough to purchase flour
at the lower price, others will be forced to do without. Because controls
prevent the price system from rationing the available supply, some other
mechanism must take its place.
RENCONADA, JESSA R.
BSHRM 3B

ASSIGNMENT #5

Government Public Goods

Public goods are at the opposite end of the continuum. Classic

examples include national defense and the internet. The characteristic that
distinguishes a pure public good from a pure private good is that one
person’s use does not diminish the ability of someone else to use the same
good at the same time. My consumption does not exclude your
consumption. For that reason, traditional supply and demand analysis does
not correctly identify how much defense to “produce” and how much each
person should pay for his or her defense. In fact, since no business could
charge each person for their defense, there is no market mechanism to
identify how much each individual is willing to pay. Economists generally
agree that pure public goods are properly provided by government and paid
for by taxes. There are complicated ways to discern how much each
person is willing to pay, but it is much simpler and more acceptable
politically to use the tax system.