JAYMAR B.

OLAMIT
BAcore 4 1G
February 21, 2021
Activity 1

M1.
1. If I offer to give you something for nothing, is there a cost? Why?
Answer: if we talk about the item. Yes, it has because he/she buy it first before he/she gives it
to you. But when we talk about giving. It hasn’t, because it’s maybe it’s a friendly gift.
* What the opportunity cost of your decision?
Answer: receiving money to someone, without working or doing anything and I don’t know if I’ll
going to spend or save it
* Why was that your opportunity cost?
Answer: because I haven’t decision yet.

2. International Widget is producing fifty widgets at a total cost of P50,000 and is selling them
for P1,200 each for a total revenue of P60,000. If it produces a fifty-first widget, its total
revenue will be P61,200 and its total cost will be P51,500.
Problem:
1. Should the firm produce the fifty-first widget? Why? And show the solution.
M2
1. Before Uber, how were prices set in the market for rides in New York City? Was it a
competitive market?
Answer: the price was set in a meter per rides. And it was a competitive market because of lots
of people finding a taxi.
2. What accounts for the fact that during good weather there are typically enough taxis for
everyone who wants one, but during snowstorms there typically aren’t enough?
Answer: it is because many taxi drivers in NYC are afraid to ride out maybe because of a
slippery road or to crash. Its not easy to ride when there’s a snow you can’t control it.
3. How does Uber’s surge pricing solve the problem described in the previous question? Assess
Kalanick’s claim that the price is set to leave as few people possible without a ride.
Answer: because after you book it was all fixed price when you get an uber. But when you
picked up a taxi you pay money per kilometer. So, it has a big different between taxis and uber.

2.Find a real-life example (article) of the Law of Supply! Write 1 paragraph summarizing the
example and how it relates to the Law of Supply.
Answer: orange, because of this pandemic they higher the price from 5pesos to 7pesos and
there are lots of supplies of oranges. (the higher the price, the higher the supply)
3. At least one quote from the article demonstrating Law of Supply.
Answer: Other things will remain the same, it should not change