Economics Basics
Fill in the blanks: Economics studies how people make choices because wants are ______, but resources are ______.
unlimited; limited
You choose pizza instead of burgers. Giving up the burgers is called a ______.
Trade-off
A viral TikTok makes thousands of students suddenly want the same water bottle. What factor is influencing preferences?
social media/social influence/trends
True or False: Wanting a new phone automatically means you have demand for it.
False
What is quantity demanded?
the amount/number of units consumers are willing and able to buy at a specific price.
True or False: Scarcity means that there are absolutely no resources available.
False; scarcity means resources are limited relative to wants, not nonexistent.
Mia has ₱300. She can buy either a concert shirt or three books. She chooses the shirt. What are the three books called in economics?
Opportunity Cost
A teenager prefers a food because it is commonly eaten in their family and community. Which factor is influencing their preference?
Culture
Fill in the blank: Demand means consumers are both ______ and ______ to buy a good or service.
willing and able
Law of Demand: If the price of milk tea decreases, what normally happens to its quantity demanded?
quantity demanded increases
A student has ₱500 but wants lunch, new school supplies, and a movie ticket. What economic problem is the student experiencing, and why?
scarcity/limited resources because the student cannot satisfy all wants with ₱500.
Explain: What is the difference between a trade-off and an opportunity cost?
a trade-off is the choice/give-and-take among alternatives; opportunity cost is the next best alternative forgone.
A shoe suddenly becomes popular after several celebrities wear it online. Name two factors that may be affecting consumers' preferences.
trends + media/social influence
Ben really wants a ₱70,000 gaming PC but only has ₱5,000 available to spend. Is this desire or demand? Explain.
desire, because he is not currently able to purchase it
True or False: When a product's price drops and 50 more people are enticed to buy it, we can clearly see the law of demand in action.
True; the lower the price, the higher quantity demanded. The higher the price, the lower quantity demanded.
After a typhoon, the supply of vegetables suddenly becomes limited and prices rise. Which concept best describes this situation: scarcity, personal preference, social influence, or demographics? Explain.
Scarcity/limited resources, specifically a market shock has made the resource less available.
You have two free hours. You can either study for tomorrow's test or watch a movie. You study. Identify the choice, trade-off, and opportunity cost.
choice: studying; trade-off: studying versus watching the movie; opportunity cost: watching the movie.
A toy company notices fewer children are being born in an area, so fewer toys are being purchased. Which factor affecting preferences or consumption does this represent?
Demographics
At ₱200, Ana wants a shirt but cannot afford it. At ₱100, she is willing and able to buy it. Why does only the second situation count as demand?
demand requires both willingness and purchasing ability
At ₱100, 30 students would buy a school tote bag. At ₱150, only 18 would buy it. What are 30 and 18 examples of?
New buyers willing to buy at this price
Mrs. Cruz usually budgets ₱5,000 for groceries, ₱3,000 for gas, and ₱2,000 for savings each month. However, a sudden increase in global oil prices causes gasoline prices to rise sharply across the country. Because she now needs to spend more on gas to travel to work, Mrs. Cruz has less money available for groceries and savings.
Many other households experience the same problem and begin reducing their spending on certain goods and services. What economic concept is present? Explain.
Market shock. Because of the gas price hike, all demands on certain goods and services were effected.
Carlo chooses a ₱250 meal instead of a ₱180 meal because he likes it more. His second-best choice was the ₱180 meal. What is his opportunity cost? Is it ₱70 he could've saved or the meal he gave up? Explain.
The opportunity cost is the ₱180 meal he gave up, not simply ₱70. Opportunity cost refers to the next-best alternative forgone.
A local café notices sales suddenly increase because a drink is trending online. At the same time, a new school opens nearby with 500 students. Identify two different factors that could be changing consumer behavior and explain each.
social media/trends and demographics/number or characteristics of consumers.
Change in Demand or Quantity Demanded?
A café lowers the price of its iced coffee from ₱120 to ₱90, and more students begin buying it. At the same time, a viral TikTok trend makes iced coffee more popular among teenagers. Which change affects quantity demanded, and which change affects demand? Explain why.
The price decrease affects quantity demanded because it causes movement along the demand curve. The TikTok trend affects demand because it changes consumer preferences, shifting the entire demand curve.
A school canteen notices that sales of bottled water suddenly increase during one week, even though the price stays the same. Give two possible factors that could explain the increase in demand, and explain how each factor could affect consumers’ willingness or ability to buy bottled water.
A heat wave could increase students’ preference or need for water, while an increase in the number of students on campus could increase the number of potential buyers.