Harry A. Gentiles Jr. CEE 109 (12228)
BSECE Engr. Dario A. Calaque Jr.
Activity 1: Now that you review the most essential principles in engineering economy. Let us
try to check your understanding by solving the following cost problems:
Situation 01. What is law of supply and demand? Cite an example.
Law of the Supply and Demand is a theory wherein talks about the relation within the sellers of
a materials and the buyers for that specific material. This theory also tells about the outcome
relationship of the connections of the products and the demand for that specific product and its price
Ex. When the supply of the material increases, the price of the material will also decrease and
demand of that material can rise due to it costs loss.
Situation 02: How shortage and surplus affect the economy?
If there is a shortage of a product it will push consumers to try and get the limited goods on
sale. Where consumers won't be able to buy as much of a product they would like. On the other side,
surplus occurs after reducing the costs and spending of a product. Surplus also decreases buyer’s
demand, and if there is a decrease in consumer prices it will slows down the economy.
