NAME: Jinalyn T.

Cerbito

RATING: ______________

I.

In not less than seven sentences, discuss the following:

(10 pts. Each)
1. Importance of economics in your course
2. There is no such thing as free lunch.
3. Humans needs as insatiable

II.

Analyze the following economic issues whether it is

essentially beneficial or not in our economy: (20 pts.)
1. Mining in the Philippines
2. OFW
3. Salary Hike
4. Fuel price rollback

III.

Explain the following factors of production: (30 pts.)

Entrepreneur
Capital
Labor

Answers:
I.
1.
The field of economics encompasses the study of the
entire economic system, both at the micro and macro level.
Hotel economics is one such area where the subject matter of
economics has gained its growth in obtaining for the hotel
industry needed aspects, right from its initiation, establishment,
and growth. The hotel industry though considered to be a
service sector has proved its might in different dimensions
providing employment, revenue to the government and also
acting as a promoter of culture by developing the most vital
industry which is tourism. Tourism has emerged as a most

instrumental phenomenon in the economic and social

development of the society. It also acts as a subsidiary in
providing accommodation to the tourist who visit the country
by providing the most luxurious accommodation to the one like
the motel where basic necessities are provided even to a poor
tourist. It is seen that the industry as a whole generates not only
a sizeable percentage of employment but also contributes to
the GNP of a country. The importance of this field has grown
over the years leading many institutes to provide education in
this field.
2.
An adage There is no such thing as free lunch
demonstrates opportunity cost. To get one thing that we like,
we usually have to give up another thing that we like. Making
decisions requires trading off one goal against another. The
idea that there is no free lunch at the societal level applies only
when all resources are being used completely and
appropriately, when economic efficiency prevails. If not, a 'free
lunch' can be had through a more efficient utilization of
resources. Or you can only get something for nothing if you
have previously gotten nothing for something. If one individual
or group gets something at no cost, somebody else ends up
paying for it. If there appears to be no direct cost to any single
individual, there is a social cost. Similarly, someone can benefit
for "free" from an externality or from a public good, but
someone has to pay the cost of producing these benefits.
3.
What is the economy for if not meeting human needs?
Human needs are the basis of every economic activity we
undertake. In order to reflect upon whether our economic
system is effectively meeting our needs, we need to first of all
understand what our needs are, their relative level of
importance, and how to satisfy those needs. Commonly
represented as a pyramid of needs, Abraham Maslows
hierarchy proposes a linear progression through physiological
needs, safety, love and belonging, and esteem to self-

actualization. The most basic of needs lay the base of the

pyramid, with each of the subsequent levels only taking priority
when the previous level of need has been met. For Maslow
there was a strict order to meeting the various human needs.
II.
1.
The Philippines, of course, has plenty to mine. Loaded with
mineral wealth (worth about $840 billion), it boasts some of the
largest untapped gold and copper deposits in the region.
Unfortunately, it has not always been the friendliest place to do
this kind of business. In Mindanao, which holds more than a
third of the countrys gold and houses all its insurgencies, mining
operations are susceptible to attacks and extortion from rebel
groups. Noncomplying companies have lost millions of dollars
worth of equipment to vandalism and arson. The government
has long offered generous incentives extremely low taxes,
state-funded security, low accountability to entice foreign
investment.
2.
Foreign remittances are actually the second largest
source of foreign reserves in the Philippines. In 2006, remittances
ranked even higher than foreign direct investment in terms of
percentage of GDP. Some scholars have conjectured that
OFWs have helped close the gap between the poor and the
wealthy in the Philippines by contributing to a growing middle
class. This is why migrant workers are called the new heroes.
They sacrifice a lot by working in what are often unfavorable
conditions. Because of the system of helping their families, they
are also helping the entire country.
3.
Aside from the moral and philosophical dimensions of this
issue, both sides argue that raising the minimum wage would
have sweeping effects on the economy. Proponents on the
business side says it will help ease our worsening income
inequality and stimulate consumer spending.

4.
The adverse impact of the oil price rout on oil-exporting
economies looks likely to offset, if not exceed, the stimulus it
could provide for oil-importing countries against a backdrop of
weak economic growth and low inflation. The benefit to
consumers from lower fuel prices outweighs the negatives for
energy producers.
III.
Entrepreneurs are people who organize other productive
resources to make goods and services. They obtain
remuneration for their activity in a very different manner than
do laborers or lenders of capital. The latter provide factors of
production which they sell to the entrepreneur at prices
which they naturally try to make as high as possible. The
entrepreneur proceeds quite otherwise; instead of selling
something to the enterprise he identifies himself with the
enterprise. Some people doubtless will say that he provides
the function of enterprise and receives as remuneration a
sum which varies according to the results. But this is a
tortured way of presenting the thing, inspired by an
unhealthy desire to establish arbitrarily a symmetry with the
other factors. These entrepreneurs are seen as innovators,
developing new ways to produce and new products.
Capital is a type of good that can be consumed now, but if
consumption is deferred an increased supply of consumable
goods will be available later. Capital is distinct from land or
non-renewable resources in that capital can be increased
by human labor. At any given moment in time, total physical
capital may be referred to as the capital stock which is not
to be confused with the capital stock of a business entity.
Labor is the human input into the production process. It is a
measure of the work done by human beings. It is
conventionally contrasted with such other factors of
production as entrepreneur and capital.