Chapter 1
Chapter 1
One. Explain the effect of scarcity in economic planning.
When we say scarcity, it is an economic problem of short supply of resources due to not being well-funded for the satisfaction of human wants and needs. Its effect in economic planning is important because it means that not every budget can be addressed, which means financial resources cannot fund every requested project due to its limitation in resources.
Two. What is resource allocation, and why is it important in government planning?
Two. What is resource allocation, and why is it important in government planning?
Resource Allocation is a process of distributing and managing available assets such as labor resources, information resources, and technology to projects in a way that maximizes efficiency and results. It is important in government planning because it makes sure that public funds, infrastructure, and resources are distributed efficiently for the welfare of the community.
Three. Define a market economy and explain how it generally allocates resources. Market Economy is a system in which many decisions about what to produce or how much to produce are conducted by private individuals and businesses. It allocates resources through decentralized decisions where market decisions are distributed to lower-levels like managers and workers of a private entity by determining what, how much, and whom to produce.
Four. Define a command economy and explain how it generally allocates resources.
Command Economy is a system where production and distribution of goods and services are controlled and decided by the government. The government owns the majority of the land and resources in the Philippines, and they decide on what, how much, and whom to produce. That is how the Command Economy allocates resources.