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Ateneo de Zamboanga University

School of Liberal Arts


Social Sciences Department

A1
Econ 111-A

Submitted By:
To:
John Gualbert M. Caces
D. Fuego

Submitted
Samuel

April 21, 2015


1. Identify and explain the 3 basic questions in economics .
What to produce?
The first question is concerned with the allocation of scarce human(labor,
education, white-collar, blue-collar) and nonhuman(land, money, buildings, equipment)
resources. It asks about what the economic system should produce (Rice or Corn, More
water or more electricity) given the limited resources in order to benefit both the
business and the consumers.
How to produce?
There are numerous ways to produce a good or service of similar quality . As a
member of the economy, it is important to have a clear understanding of all your
alternatives. Just as Villegas defined economics as allocation of scarce human and
nonhuman resources among their alternative uses .This asks what combination of
scarce resources will we use to produce those goods and services that we have
decided to produce.
For whom to produce?
The economy consists of humans having unlimited and different wants and the
system cannot satisfy all of these wants and services . This question asks that of all the
unlimited wants and services we humans have, which of those should the economic
system focus on to know what to produce.
2. Differentiate economic equity from efficiency
In order to know the difference between economic equity from efficiency,
we should first know the meaning of both. In economic efficiency, the economy is

getting the most of out its scarce resources. Equity on the other hand is the fair
distribution of products between different members of society.
The difference between economic efficiency and equity is that in economic
efficiency is all about maximizing the production of an economy and economic
equity is how the product is shared.
3. What are the techniques of production?
Capital Intensive Production
It is a business process or an industry that requires large amounts of
money and equipment to produce a good or service . A business is considered
capital intensive based on the ratio of the capital required to the amount of labor
that is required.
Labor Intensive Production
It is a process or industry that requires a large amount of labor to produce
its goods or services. Labor intensive industries include restaurants, hotels,
agriculture and mining. A labor intensive business is one in which the main cost
is that of labor, and it is high compared to sales or value added .
4. What are the 4 types of factors of production? Explain and give example .

Land
Land is the economic resource encompassing natural resources found within a
nations economy. This resource includes lumber, land, fisheries, farms and other
similar natural resources. Land is usually a limited resource for many economies .
Although some natural resources, such as lumber, food and animals, are renewable, the
physical land is usually a fixed resource.

Labor
Labor represents the human capital available to transform raw or national
resources into consumer goods. Human capital includes all able-bodied individuals
capable of working in the nations economy and providing various services to other
individuals or businesses. Examples of labor are white-collared jobs such as CEOs,
accountants, and managers and blue-collared jobs such as farmers and factory
workers.

Capital
Capital has two economic definitions as a factor of production . Capital can
represent the monetary resources companies use to purchase natural resources, land
and other capital goods. Capital also represents the major physical assets individuals
and companies use when producing goods or services . These assets include buildings,
production facilities, equipment, vehicles and other similar items .

Entrepreneurship
Entrepreneurship is considered a factor of production because economic
resources can exist in an economy and not be transformed into consumer goods . An
entrepreneur is a person who combines the other factors of production - land, labor, and
capital - to earn a profit. Entrepreneurship is also considered a factor of production

since someone must complete the gathering, allocating and distributing economic
resources or consumer products to individuals and other businesses in the economy .