Name: Cristine Joy M.

Anatan___________________________ Date: August 29, 2022

College/Year/Section: BSCM 1A_________________________

UNIT I
MARKETS AND PRICES

2.01 IN BRIEF
Brevity is the soul of wit. Write a brief response to each question below.

1. How can prices allocate goods and services?

Price is the most effective method of allocating resources. The price of the product has a

significant impact on how goods and services are allocated to satisfy limited demand.

2. How can you tell when a market exists?

Market exists when buyers and sellers interact, communicate and trade goods for money.

Noted: MARY ANN M. DE LA VEGA, PhD. SS218B – Basic MicroeconomicsPage 1

Name: Cristine Joy M. Anatan___________________________ Date: August 29, 2022
College/Year/Section: BSCM 1A_________________________

Assignment # I

BASICS OF ECONOMICS

LESSON I - BASIC ECONOMIC CONCEPTS

1.01 THINK FAST

In five or fewer words, what is economics?

Economics is the study of how society use scarce resources to satisfy the unlimited wants.

1.02 CATEGORIZATION

1. Micro Macro How the Central Bank influences consumer spending in the Philippines.
2. Micro Macro How a household decides which brand of laundry detergent to buy
3. Micro Macro How a firm decides when to go out of business
4. Micro Macro How debt affects the income gap among Americans
5. Micro Macro How new parents decide whether to work or stay home with their children.

1.03 FILL-IN

1. Lunch
2. Wants, resources
3. Scarcity
4. Limited
5. Air

Noted: MARY ANN M. DE LA VEGA, PhD. SS218B – Basic MicroeconomicsPage 2

Name: Cristine Joy M. Anatan___________________________ Date: August 29, 2022
College/Year/Section: BSCM 1A_________________________

Analysis of an economic or business article.

Financial Statements That Every Business Owner Should Understand

What You Don't Measure, You Can't Improve!

Small businesses need to be well-informed to thrive in a cutthroat climate, and one crucial skill
they must have is the ability to read and comprehend crucial financial records. It is crucial for
small firms to comprehend fundamental financial statements including Trial Balance, Balance
Sheet, and Profit and Loss statements because they are crucial reports for ensuring their
competitiveness in the market. Similar to driving a car without a dashboard, managing a firm
without comprehending this financial information is impossible. Businesses involved in financial
activities require ongoing information on a range of factors, including consumer demand, market
share, price, competitive activity, production costs, investment returns, capital costs, and
regulatory levies. Financial data, such as revenues, costs, capital, salaries, loans, and
investments, is among the most crucial of these. If you consider a household as an example,
information on things like the primary wage earners pay, household expenses, children's tuition,
and vegetable prices would be some of the information needed on a regular basis and this
would represent financial information.

The double entry approach, which involves recording a debit in one account and a credit in
another for every dollar exchanged, is one way of gathering and preserving financial data. Either
a credit balance or a debit balance will exist for each account. Accountants use a technique
called the trial balance to make sure the data recorded is done and saved accurately. The trial
balance will allow the accountant to gather the data needed to produce crucial financial
statements like the income statement and the profit and loss statement also known as the
balance sheet. For many people engaged in any firm or organization, these two statements are
regarded as the most crucial financial statements. One might, for instance, be an investor
looking to fund the business. One of them can be a supplier seeking to offer products and
services. One possibility is a lender who has given the business a loan and is interested in
knowing whether it is doing well enough to repay the debt.

The balance sheet represents the company's financial situation as of any given day, often the
end of the fiscal year. It provides a precise financial representation of the corporation on that
given day, as shown by its assets, liabilities, and equity. In the case of the household, the family

Noted: MARY ANN M. DE LA VEGA, PhD. SS218B – Basic MicroeconomicsPage 3

Name: Cristine Joy M. Anatan___________________________ Date: August 29, 2022
College/Year/Section: BSCM 1A_________________________

can reflect on the year that has passed and make plans to balance the books by either
borrowing money if there is a shortage or saving money if there is a surplus. The company's
financial situation for a specific time period, typically a financial year, is summarized in the profit
and loss statement as either a profit or loss for the business. Businesses typically produce a
profit and loss statement for a quarter or even a month to assist them evaluate their
performance in relation to goals they have established. In the case of the household, the family
typically prepares a profit and loss statement each month to coincide with the payment of the
month's salary.

People can draw conclusions about the financial health of the firm and take action to interact
with it based on the important financial statements of the organization. In a similar vein, these
declarations are among the most crucial reports for small enterprises looking to position
themselves in the marketplace. Understanding the data in your financial accounts is crucial
since they may give you an overview of how the business is faring financially. A glimpse of
where money is being made and spent is provided by financial statements. The Income
Statement, Balance Sheet, and Cash Flow Statement are the three key parts of a financial
statement. Financial Statements are crucial since they accurately depict the company's financial
status and operational success. Additionally, by comparing previous and present performance, it
aids all stakeholders, including management, investors, financial analysts, and others in
evaluating and making appropriate economic decisions and, as a result, predicts future success
and growth of the organization.

Author: CA Mohnish Katre January 27, 2017 https://www.profitbooks.net/important-financial-

statements/

Noted: MARY ANN M. DE LA VEGA, PhD. SS218B – Basic MicroeconomicsPage 4

Name: Cristine Joy M. Anatan___________________________ Date: August 29, 2022
College/Year/Section: BSCM 1A_________________________

LESSON II - OPPORTUNITY COST AND TRADE-OFFS

1.04 IN BRIEF
1. What is the basic problem of economics?
Scarcity
2. According to economists, why do people have to make choices?
Because of unlimited wants and limited resources.
3. Why do economists say ―There ain’t no such thing as a free lunch?
Everything comes with a price. The cost might not necessarily be money If you get anything for
free, there is a cost elsewhere in the larger economic system.
4. What is a free good?
It is a good with no cost and abundant in supply.
5. What is a trade-off?
Giving up one thing for another
6. What is the opportunity cost of a decision?
The value of the best forgone alternative.
7. What is the difference between accounting cost and economic cost?
Accounting costs are the actual currency amounts paid that are recorded in the books, while
economic costs include those the same costs plus opportunity costs.
8. Why is it difficult to quantify the economic cost of a decision?
Because every decision and action have a cost associated with them.

1.05 EXAM PRACTICE

1. The cost of a trade-off is known as its

a. opportunity cost
b. trade-off cost
c. explicit price
d. real value
e. future cost

2. A firm can produce T-shirts or sweatshirts. The opportunity cost of the firm’s decision to
produce T-shirts is BEST measured by the
a. fixed costs of T-shirt production
b. variable costs of T-shirt production
c. price of the T-shirts produced
d. number of sweatshirts the firm chose not to produce
e. total costs of T-shirt production

Noted: MARY ANN M. DE LA VEGA, PhD. SS218B – Basic MicroeconomicsPage 5

Name: Cristine Joy M. Anatan___________________________ Date: August 29, 2022
College/Year/Section: BSCM 1A_________________________

1.06 MATCHING

a. opportunity cost 1. __f__ a decision to have more of one thing

and less of another

b. scarcity 2. __g__ the scale of the study of

microeconomics

c. economic cost 3. __d__a negative externality of working abroad

for seven years

d. increase in insanity 4. ___a__ equal to the value of the best alternative

not taken

e. free good 5. __c__ a measure of the net economic impact of

an action

f. trade-off

6. __h__ the scale of the focus of

macroeconomics

g. individual 7. __e__ available in a sufficient quantity to

anyone who wants it

h. aggregate 8. ___b__ the reason we study economics

Noted: MARY ANN M. DE LA VEGA, PhD. SS218B – Basic MicroeconomicsPage 6