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LEARNING ACTIVITY SHEET

APPLIED ECONOMICS
Basic Economic Problems and How Applied Economics Solves Economic Problems
Name of Learner: ____________________________________
Grade Level: 12__________________________________
Strand/Track: ABM Academic_______________________
Section: ____________________________________
Date: ____________________________________

A. Background Information for Learners

The lesson is about the Basic Economic Problems and How Applied Economics Solves
Economic Problems. Base on the most essential learning competency, it involves the
activities which can help the students master the assigned competency

B. Learning Competency with code

*Examine the utility and application of applied economics to solve economic issues and
problems
C. Directions/ Instructions

After going through with this lesson, you are expected to:

1. Use the Learning Activity Sheets with care.

2. Use a separate sheet of paper in answering the activities.
4. Read the instruction carefully before doing each task.
4. Check your answers with honesty and integrity.
5. Finish the task at hand before proceeding to the next.
6. Ask questions to your teachers for clarification through messenger or text.
7. Return this Learning Activity Sheets complete and on time.

D. Exercises / Activities

D1. INTRODUCTION

a. What I need to know

After going through with this lesson, you are expected to:

1 identify the basic economic problems

2. illustrate how applied economics can be used to solve economic
Problems
3. construct framework to solve the economic problem
4. solve problems on economic activities

D. 2 DEVELOPMENT
a. What I know?

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Activity 1: Pre-Test
Part I. Identification: Direction: Please read and analyze the questions carefully.
1) What do you think were the resources used to produce the products (dresses)?
2) What were the issues/problems in the production of the products?

b. What’s In?

Activity 2: “Let’s try it”

Let’s check your retention of our past lesson.
Part I Multiple Choice.
Directions: Kindly choose the letter of the correct answer. Write your answer in your
activity notebook.

1. The physical effort of the manpower to produce the basic needs of the
consumers, describes which factor of production?
a) Land b) Capital c) Labor d) Entrepreneur

2. The initiative and creativity to produce something new describes which factor
of production?
a) Land b) Capital c) Labor d) Entrepreneur

3. The equipment of the coffee shop to produce cups of coffee, are what kind of
goods or products?
a) Consumer goods
b) Either consumer goods or capital goods
c) Capital goods
d) Economic goods

4. Which best of the following best describes economics as a social and an applied
science?
a) The study of products we need to survive
b) The study of how customers make choices when there is unlimited supply of resources
c) The study of human personalities
d) The study of how buyers make choices when there is limited supply

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5. The following are examples of customers’ basic needs.

a) Water and shelter
b) Iced tea
c) Laptop and cellular phones
d) Expensive bags

c. What is it?

In the article of Forbes Custom (2017), The Philippines: Asia’s New Economic
Powerhouse, the Philippine economy has transformed into one of Asia’s most dynamic
economies on the back of fast-paced Gross Domestic Product (GDP)
growth (www.forbes.com). For the longest time, it has all the opportunities to sustain its
growth and stability. However, due to the problem on pandemic, at present, it is suffering
from economic depression. The issue of scarcity on supply due to limited resources, but
unlimited wants, is the ultimate economic problem. Scarcity implies a limited quantity
of
resources needed in production.
Guru, S. (2020) mentioned, the main issues on production include the products to produce; how
to
produce these products and for whom to produce the products and how to make the economy
grow. Economics, therefore, is concerned with the allocation of resources to make the most
efficient use of these resources.
The Four Basic Economic Problems
In the article of Guru, S. (2020) Basic Central Problems Faced by an Economy, there are basic
problems common to all economies. In terms of production, common to all countries is the
problem on scarcity. This arises because the resources are limited and have alternative uses. This
problem gives rise to four basic problems of an economy. In this topic, we will look into these
basic problems of what to produce, whom to produce, how to produce and what provisions on
production for economic growth. As we said earlier, economics can be a tool to solve these
economic problems. Economists formulate strategic solutions to economize the problems such as
economic growth or the ability to produce goods and services, reduce expectation or the ability to
reduce our wants such as lessening consumption, and improve the use of resources or the
capacity to use our existing resources wisely.

APPLIED ECONOMICS ON BASIC ISSUES AND PROBLEMS

Applied Economics seeks to solve the problems on scarcity. This happens when human
wants for goods and services exceed the available supply. In a modern economy, it is
evident that a division of labor happens when people earn income by specializing in what
they produce. They will use that income to purchase the products they need or want

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every day (BC Campus 2020).

Also, in the division of labor, it allows workers and firms to produce more. This is
because: a) agents focus on areas of advantage due to natural factors and skill levels; b)
the agents learn and invent; c) the agents take advantage of economies of
scale. Division and specialization of labor only work when individuals can purchase what
they do not produce in markets. Applied economics then helps you understand the basic
problems facing the world today. It helps you become a well-rounded thinker. And most
importantly, it prepares you to be a good citizen. (Credit: Nina Hale/Flickr Creative
Commons)https://opentextbc.ca/principlesofeconomics/chapter/1-1-what-is-economics-
and-why-is-it-important/

Economics can be a tool to solve economic problems on the production of goods and
services.
 Production is the process by which resources are transformed into useful forms.
 Resources are things provided by nature that can be used directly or indirectly to
satisfy human needs.
 The basic economic problems on production includes: what to produce, whom to
produce, how to produce and what provisions on production for economic growth.
 Strategic options/decisions to economize the problems include:
economic growth – ability to produce goods and services;
reduce expectation- reduce our wants - lessening consumption;
improve the use of resources - use our existing resources wisely;
don't waste the limited resources; productive efficiency;
allocate efficiency; full employment and equity of resources;
and reduce expectations – reducing wants.

D. 3 ENGAGEMENT
a. What is more?
Activity 3: “Fast pass”
Directions: Let’s analyze this passage. This will help you understand our new topic on
the basic economic issues and problems in the production of goods and services. Are you
ready? If yes, you may now analyze the situation.

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Activity 3: Multiple Choice (with critical thinking analysis)

Direction: Please write your answer in your activity notebook.
1. Scarcity of resources in your locality (Manila) is evident. Only available are fabrics,
electric sewing machines and skilled workers. The government said, you are only
allowed to work from home to be safe and free from infection of viruses. Which items
most likely you need to produce?
a) PPEs b) Canned goods c) Sacks of rice d) Sewing machines

2. Manila is ranked 2nd in the most cases of COVID patients in Metro Manila. The city
needs urgent services of the medical frontliners in curing the increasing number of
patients. There is scarcity in the raw materials for production. To whom would you
produce first the available resources?
a) Soldiers b) Police Officers c) Medical Frontlines d) Your family

3. There is an urgent need of PPEs by the medical frontliners in the City of Manila due
increasing number of COVID patients every day. Which is not true of producing the
products (PPEs)?
a. Import from China
b. TESDA students and skilled workers may produce the PPEs
c. Manufacturers/suppliers may supply the PPEs
d. Export PPEs to Japan as gross national products

4. The ABM Manufacturing Company decides to produce more on liquid soap

than bar soap to supply the growing demands in the market. It solves issues on:
a. Whom to produce
b. How to produce
c. How much incentive
d. What to produce

b. What I can do?

Activity 4: “Solution!”
Directions: You may collaborate and communicate with your friends and family
members in doing the tasks. Currently, we are dealing with scarcity on units of bicycles.
Below is a framework showing the solution on how to deal with economic issues on
meeting the products.

Question: As an agent of the economy, how will you deal with this scarcity? Choices are
given below. Place them in their proper columns as to economic growth; and improve the
use of available resources and reduce expectations.

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Activity 5: “Fill it in”

Directions: Please read and answer the following sentences

 Among nations, these are the common economic problems on production
of goods and services: a)__________________; b)_______________________;
c) ________________; d) __________________.
 Economics can be a tool to solve the fundamental problem in economics
which is _________________ in the production of goods and services.
 The strategic solutions/decisions/options to economizing problems
include a)________________; b)___________________; and c)_______________.

c. What other enrichment activities can I engage in?

Activity 6: “Creativity and Love for nature”

Directions: Please read carefully.

Despite the limited resources and scarcity of products for our consumption, today, we still
want to achieve maximum satisfaction. We make use as few resources as possible, allocate
our resources where they are best suited, and use the appropriate technology or materials and
produce the right goods and services. Given the resources below, please select the most

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efficient products that could be produced to maximize production and help the economy.

D.4 ASSIMILATION
a. What I have Learned?
Activity 7: “Ceteres Paribus”
Directions: Read and answer the question. Write your answer in your activity notebook
provided by your teacher.

b. Assessment

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Activity 8: “Post Test”

Part I TRUE or FALSE Directions: Please write TRUE if the statement is correct and
FALSE if the statement is incorrect. Write your answer in your activity notebook.
1. _______________Scarcity in goods and services happens if the resources in the
production are inadequate or scarce.
2. _______________Customers must choose among several alternatives if scarcity exists.
3. ________________ Income inequality is the gap in income that exists between the rich
and the poor customers willing to buy the same products.
4. ________________Shortage of goods and services is an economic problem; and
shortages are always constant
5. _________________The Build Build Build Program by the government aims to help
improve the infrastructure projects and other programs of the country.

Part II Multiple Choice. Choose the letter of the correct answer.

1. The fundamental economic problem that must be solved efficiently
a) Scarcity of resources
b) Health system
c) Surplus of demands
d) Export policies

2. Economists point out that scarcity must be addressed to protect the

a) The poor but not the rich
b) Both the poor and the rich
c) Neither the poor nor the rich
d) The poor but never the rich

3. What two factors contribute to scarcity in the production of goods and services?
a) Unlimited resources and limited wants
b) Unlimited resources and wants
c) Unlimited wants and limited resources
d) Limited resources and wants 11 Learning Module for Applied Economics

4. If there is scarcity in public transportation, what should the learners do?

a) Home based learning is an alternative choice for access to education
b) Stop learning while waiting for transportation shortage to be solved
c) The government must import units of car from neighbor countries
d) All choices are applicable

5. The economists describe the amount of resources in an economy as:

a) Always constant
b) Can never decrease or increase
c) Unlimited at any moment in time
d) Limited at any moment in time

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E. Rubric for scoring (if necessary)

Short Response

4 3 2-1 0
The sentences The sentences The sentences no answer
reflect in-depth reflect deep reflect low
meaning of the meaning of the meaning of the
word and with word and with word and with
highly organized organized highly
sentences. sentences disorganized
sentences.

F. Reflection

Learners will write on their notebook or journal their insights about the lesson.

I understand that ____________________________________.

I realized that _______________________________________.