ALMENDRAS, ANGELICA M. FINMGT-1101 Activity 3

1. Write an essay about the factors you as a consumer consider in budgeting your allowances or hard earn money from your jobs if ever you have as well as goods and services you want to Avail? The majority of us have financial savings dreams but regrettably, only a few are successful. In today’s expensive living, many people, especially the lower and middle class, did not consider any factors in buying goods and services. They also do not know about budgeting because their income simply comes in and goes out easily. Most of the time, people who always want to save find it difficult to manage their income in the fact that they do not know the use of budgeting. Yet, Regardless of our economic level, a budget is a crucial tool for everyone. Anyone may use it to strive toward financial objectives, stay away from bad debt, and accumulate savings. When I was in High school, I did not use any planning approach to prioritize my spending and concentrate my funds on the things that are most essential to me. The money/allowances I got from my parents did not last long because at that time I am the type of person who always buys things that attract me. I only used one factor in availing the product and services, which is quality. I always think going out and eating with my friends will satisfy me. Now that I am aware of everything, I realize that spending my money in a budgeted way is more important, particularly for my future purposes. After all the realizations, I used the 50-30-20 budget rule that I learned from my teacher in Senior High School. Fifty percent for my needs, thirty percent for my wants, and I save twenty percent of my money to avoid bad spending habits and overspending. I also check first the qualities of goods and services before availing, and next I check the price if it is worth buying for its value. When availing of the products online, I consider the reviews of customers, quality, and convenience of the product to make sure that I will not regret my purchases. In addition, there are times that I do not follow trends usually in food and clothes to avoid breaking my budget rule. Overall, having a factor to consider in budgeting the allowances in availing goods and services is essential because it will help us avoid overspending and regrets. We need to make a goal in money to make sure that our money has direction. Also, we need to be committed to budgeting and planning how we will spend our money wisely. Furthermore, as a consumer, I always make sure that all of my purchases have a purpose and will last long.

2. Create a schedule and curve of total and marginal utility on any goods and services you want to avail in connection to your answer on number 1. SCHEDULE OF TOTAL AND MARGINAL UTILITY Apple pie Consumed (in pieces) Total Utility (in units) Marginal Utility (in units) 1 45 45 2 80 35(80-45) 3 105 25(120-90) 4 115 10(140-120) 5 100 -15(90-140) 6 35 -65(35-100)

TOTAL UTILITY CURVE 140 120 100

80 60 40 20 0 1

2

3

4

5

6

MARGINAL UTILITY CURVE 60 40 20

0 1 -20 -40 -60 -80

2

3

4

5

6

3. If you will be given 500 pesos, determine what combination of any goods and services you want to avail of which you will obtain the maximum satisfaction with your limited fund. Please create utility maximization and schedule of combination on the goods and services you want to avail. Assume that Angelica is determining what combination of two goods, Turk’s shawarma and burger, must she purchase for her to obtain the maximum satisfaction with her limited fund of five hundred pesos. Angelica is confronted with the price of Turk’s shawarma at P95 per pita bread and P50 pesos for a burger, regardless of how many are bought. UTILITY MAXIMIZATION Quality Consumed 0 1 2 3 4 5 6

Turks Shawarma Total Utility 0 40 55 65 65 60 30

Turks Shawarma Marginal Utility 0 40 15 10 0 -5 -30

Burger Total Utility 0 20 30 38 42 44 45

Burger Marginal Utility 0 20 10 8 4 2 1

SCHEDULE OF COMBINATION FOR ANGELICA’S UTILITY MAXIMIZATION Combination 1 2 3 4 5 6

Quality Turks Shawarma + Burger 1 5 2 3 3 1 4 2 5 0 0 6

Total Price P345 340 335 480 475 300

Total Units 84 93 85 95 60 45