APPLIED ECONOMICS

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LEARNING ACTIVITY SHEET

Background Information for Learners:

This lesson focuses on the discussion of supply and demand and as well as how
equilibrium price and quantity are determined. The lesson will give us a background of the
law of supply and demand.

Supply and demand in economics, is the relationship between the quantity of a

commodity that producers wish to sell at various prices and the quantity that consumers wish
to buy. It is the main model of price determination used in economic theory. Supply which
refers to the total amount of a good or service available for purchase; along with demand, one
of the two key determinants of price. A change in the price of the product will cause a change
in quantity supplied. Demand is the willingness and ability of the people within a market area
to purchase particular amounts of goods or services at a variety of alternative prices during a
specified time period.
The Law of Supply and Demand explains that the price of an item will go down if
the supply increases or if the demand for the item decreases. The price of an item will go up if
the supply decreases or if the demand for the item increases. In general, the price of an item is
usually pushed toward the level at which the quantity supplied will equal the quantity
demanded.
The price of a commodity is determined by the interaction of supply and demand in a
market. The resulting price is referred to as the equilibrium price and represents an
agreement between producers and consumers of the good. In equilibrium the quantity of a
good supplied by producers equals the quantity demanded by consumers.
 Illustration of the relationship of price to supply (S) and demand (D).

P – price
Q – quantity of goods
S – supply
D – demand

According to basic economic principles, the price of your product or service can
be determined by the four basic laws of supply and demand:

1. If demand increases and supply remains unchanged, then it leads to higher

equilibrium price and higher quantity.
2. If demand decreases and supply remains unchanged, then it leads to lower equilibrium
price and lower quantity.
3. If supply increases and demand remains unchanged, then it leads to lower equilibrium
price and higher quantity.
4. If supply decreases and demand remains unchanged, then it leads to higher
equilibrium price and lower quantity.

Learning Competency with code:

Analyze market demand, market supply and market equilibrium
ABM_AE12-Ie-h-4
Activity 1: ARRANGE ME!

Direction: Arrange the jumbled words in order based on the definition given. Write the
correct answer on the space provided.

1. which refers to the total amount of a good or service available for

purchase; along with demand, one of the two key determinants of price. Y S U P L P
2. is the willingness and ability of the people within a market area to
purchase particular amounts of goods or services at a variety of alternative prices during a
specified time period. E M D A N D
3. explains that the price of an item will go down if the supply increases or
if the demand for the item decreases. E H T W A L F O Y S U P L P N A D M E D A N D

4. In the quantity of a good supplied by producers equals the quantity

demanded by consumers. M U I R B I L I U Q E
5. The price of is determined by the interaction of supply and demand in
a market. Y T I D O M M O C

Activity II : Interpret me!

Direction: Interpret the following supply and demand theories by writing higher or
lower in each blank.
1.If demand decreases and supply remains unchanged, then it leads equilibrium
to

price and quantity.

2.If demand increases and supply remains unchanged, then it leads to _ equilibrium

price and quantity.

3.If supply decreases and demand remains unchanged, then it leads equilibrium
to

price and quantity.

4.If supply increases and demand remains unchanged, then it leads to equilibrium

price and quantity.

Activity 3 : Reflect on the message of the poem below.
Directions: Tick (/) the sentence that expresses what is true about the poem.
1. Economics is a study of wealth.
2. Economics is a study of choices.
3. Economics is a study of allocation.
4. Human needs are brought about by differences in income.
5. Allocations distribute unlimited resources
6. Society creates its material growth.
7. Social science deals with how people interact with one another.
8. Instability is an economic goals of society.
9. Individual needs and wants are certain.
10. It deals with how wealth available to its people.

Supply and Demand

The Invisible Hand

Isn’t this the way the economy shrinks and expands?
Are your goods elastic
Or inelastic static
When you raise your price is it sweet or tragic?
Does your income waver
As you look for labor
Is it inferior goods you favor?
Is there a substitute
For the pricey things you choose
Will the demand curve shift when you get a clue?

By Gordon Snyder

Reflection:

Answer the following questions below , write your answer on a sheet of paper:

1.What did I learn?

2.Why does this learning matter?

3.In what ways will I use this learning?

References:

"Economy Poem About Economics - Google Search". 2020. Google.Com.

https://www.poemhunter.com/poems/economy/

Tullao, Tereso. 2018. Applied Economics. Philippines: Phoenix Publishing House.

Prepared by:

GLENDA N. NAGUIT, PhD.

Master Teacher I
ACNHS – SHS

Answer Key: