FERL DIANE S.

SIÑO
BSA18

Managerial Economics: Prelims Assignment #1

Answer the following questions:

1. How is economics like a science?

Answer:

Economics is like science in some ways but not others. Basically, economics is a social
science, as it deals with the creation of wealth and its utilization by individuals and society.
Its laws are not as exact and same as that of a basic science, where the apple always falls on
the ground. Also, it is not a science in a way that physics or chemistry is a science, as it
cannot engage in controlled experimentation to demonstrate how variables are connected.
But, definitely, Economics is a science because it is an organized body of truth, coordinated,
arranged, systematized with reference to certain general laws and principles. It uses scientific
methods and principles to make theories that can help explicate the behavior of individuals,
groups and organizations and attempts to rationalize economic behavior, which arises when
scarce resources are exchanged. Economists use different methods, based primarily on
observation and deduction and the construction of abstract models.

2. The Philippine Economic Report contains statistical information about the economy as
well as the analysis of current problems and policy issues. Read an issue that interests you,
summarize the major economic problems at hand and explain n not less than 300 words why
the Philippines is experiencing or encountering these problems. Please use some of your
learnings in Basic Economics to explain this.

Answer:

Unemployment in the Philippines has remained high, at almost twice the level of
neighboring countries, despite of the relatively fast employment growth in the past decade.
Employment growth was not enough to lessen unemployment because of rapid population
growth and increased labor force participation. The Philippines has a chronic unemployment
problem due to the unavailability of jobs provided and offered. A lot of people, roughly two
million Filipinos, are under the labor force who cannot find suitable jobs for themselves even
if they are capable and determined. With a growing population, millions needed jobs and
only few can sure to provide one. It is like the concept of scarcity wherein too many people
are in the labor force group but, there are limited jobs offered for them. The lack of investors
and businesses that could provide good jobs for the Filipino people is one key factor in the
growing unemployment in the Philippines. But probably, one cause of unemployment in the
Philippines is lack of education. There is always an opportunity cost, whether an individual
will go to college and give up the income that could have earned if he/she did not go to
college. But due to the increasing demands of the fast pacing and developing world, it is
really hard to find jobs when you are not a graduate of a particular skill or course. Though
the Philippines is a literate country, it is not enough to be able to reach the qualifications of
most in-demand jobs that's why many people are in the underemployed state or worse,
unemployed. Moreover, the law of demand and supply applies in labor markets wherein if a
higher salary or wage—that is, a higher price in the labor market—leads to a decrease in the
quantity of labor demanded by employers, while a lower salary or wage leads to an increase
in the quantity of labor demanded. The law of supply functions in labor markets, too: A
higher price for labor leads to a higher quantity of labor supplied; a lower price leads to a
lower quantity supplied. Besides, the unemployment in the country is very rampant because
the economic planners in the country do not see through the mess in the country and they are
lacking in prioritizing the most urgent tasks at hand. Also, the country is lacking structural
reforms. That is why the country is still experiencing the chronic unemployment rate until
now thus, it will continue to exist and we cannot simply eradicate this problem of
unemployment, unless, all the other economic problems are resolved, because they are all
interconnected with each other.