6. Companies and organization make
choices on the basis of projected
profit, efficiency, market forces, and
competition. In their decisions they
have to input the reality of scarcity, as
limited resources.
7. Opportunity cost
it is the real cost or value of a
product or service compared to an
alternative.
8. For example, if you choose to play
volleyball instead of reviewing for
your examinations, then you have
lost the opportunity to review and
the reviewing time is considered as
the opportunity cost.
10. In the interplay between free market forces
and government, the most difficult part
would be deciding what goods and
services should be produced and how,
considering the limited and even fixed
amount of resources available.
11. Scarcity as a social
Problem.
The answer to scarcity would be proper
allocation of resources. Allocation is a
key economic concept.
13. Scarcity is an naturally-occurring
phenomenon in the world, and
people and countries produce
goods exactly as a continuing
response to scarcity.
14. Shortage is a temporary
breakdown or slowdown in
the supply of goods and
services.
15. Making Sustainable Use of
Resources:
Because of scarcity, people and
governments need to be more
responsible in their use of resources and
renewable resources should, at least, be
made sustainable.
16. The sustainable use of resources is not
only a wise response to the problem of
scarcity. It also guarantees that present
and future generations will have
something to utilize in the years ahead.
18. Allocation is deciding what and how
much will be produces with the limited
resources available; how goods and
services will be produced; and for whom
will the goods and services be
produced.
20. What to produce?
Society must know and give priority
to what are essential in life- things
such as food, clothing, and shelter.
21. Resources must be allocated for
producing one product over
another- and in this manner society
must be able to choose well what is
good for it.
22. How to produce?
How to produce certain goods and
services is also very important
because it guides government and
private planners about how to
allocate resources for production.
23. For whom to produce?
Even goods and services are produced, the
ones who will use them should be first
determined. Most of the time, who gets
what kind of goods and services is
determined by market forces and the kind
of distribution.
25. Scarce government funds- the
equitable allocation of resources
requires funds for distribution of
goods and services, infrastructure,
and transfers of technology, among
others.
26. Poverty and Uneven Distribution of
income- because of widespread of
poverty in many countries, many
sectors within them are not able to
have access to certain goods and
services.
27. Overpopulation – when there are too
many people in a given community or
country, scarce resources would be
very limited, and there will not be
enough to allocate.
28. Allocation in different
economic systems
An economic system is the combination
or sum total of individual and social
economic decisions, institution, and
permanent customs which are an integral
part of a country's economy.
30. Traditional economies- these are
economies where economic
decisions are made through
social customs and traditions.
31. 2. Market economies- these are economies
where economic decisions are made by
individuals in a given marketplace. The
best example of this type of economy is
capitalism, where the means of
production is controlled and owned by
individuals
32. The following are some of the features
of a market economy:
• Free enterprise
• Emphasis on profit
• competition
33. Command economies- these are
economies where economic decisions
are made, decided upon, and even
dictated by government.
34. Among the features of a command
economy are the following:
• State ownership
• Focus on equitable distribution
35. Mixed economies- these are economies
where economic decisions are made by
the combination of or interplay
between market decisions and
government policies.
37. The government and
allocation
The government, being the prime
agency tasked by the people to work for its
welfare, has a leading role in the allocation
of resources. Among its chief functions in
this regard are the following:
38. Protection of materials, producers, and
consumers
The government ensures that
resources are properly utilized,
produced and distributed as equitable as
possible. It protects the factors that are
involved in this process:
39. The natural resources and the
environment, which are the source of
raw materials are protected from the
abuse of greedy businessmen;
40. 2. The companies, factories and industries
that transform raw materials into
products from unfair competition and
are guaranteed with non-interference by
the state;
41. 3. The workers composing the labor
force, who are the main hands in
production are protected from unfair
labor practice and work hazards, and
provided with job security and;
42. 4. The consumers, the targets of these
products and services who are
protected from low-quality goods,
overpricing and misleading promotion
by the producers
43. Production and Distribution
of goods and services
Private business organizations are the
ones usually involved in the production and
distribution of goods and services in market
economies such as united states and the
Philippines.
44. Regulation and Deregulation
These are two types of policies that
are frequently used by governments in
having some control over businesses
and thus over the allocation of
resources.
45. Regulation is limiting the use of resources
by a particular industry, and is usually
imposed on industries that have access to
a very limited resource.
Deregulation is done to lessen the control
of monopolies or a group of private
business.
47. Difference between wants and
needs
A need is something that you must have.
Some examples of needs are:
Food
Water
Clothing
Shelter
48. A want is something that you would like to
have, although it is not absolutely
necessary. Some examples of wants are:
Spaghetti
Coffee
Designer jeans
Mansion
