Republic of the Philippines

Department of Education
Region V
SCHOOLS DIVISION OF SORSOGON
BULAN NATIONAL HIGH SCHOOL

APPLIED ECONOMICS

SIMPLIFIED MODULE No. 1

Name of the Student:
______________________________________________________
Grade & Strand: ____________________________ Date:
________________________

I. INTRODUCTORY CONCEPT
Knowing and understanding the economic problem of the country, where everybody is
complaining of not having sufficient income to meet both ends of the family is deemed
important nowadays. This is one concrete reason why people need to study and apply
Economics in their daily lives. In this lesson, you are expected to understand to make
good decisions in choosing how to maximize the use of scarce resources to satisfy your
unending needs and wants as possible.

II. LEARNING SKILLS FROM MELCs

ABM_AE12-Ia-d-1
 Describe the basic term’s in applied economics.
 Recognize different economics activities existing within their locality.
 Appreciate the importance of studying economics in one’s life.

III. ACTIVITIES
A. Let Us Review
MULTIPLE CHOICE. Write the letter that corresponds to the correct answer on
your answer sheet.
1. Who is the Father of Modern Economics?
a. Bryan Adams b. Adam Smith c. Joseph Smith d. Joseph Adams
2. Economics etymology came from the two Greek words ‘oiko’ and ‘nomos’
which means_______.
a. management of the house c. management of funds
b. management of money d. management of the home
3. What is insufficiency in resources to meet the wants and needs of the consumers?
a. scarcity b. inflation c. depression d. recession
4. Which of the following refers to the tangible products?
a. needs b. wants c. stuff d. goods
5. Why does Economics regarded as Science?
a. It uses laboratory equipment c. It uses factual information
b. It uses scientific methods d. It uses theories
 B. Let Us Study
Economics comes from two old Greek words - ‘oiko’, which means ‘home’
and ‘nomos’ which means ‘management’. (household management).
What is Economics?
 Economics -is the study of social behavior guiding in the allocation of scarce
resources to meet the unlimited needs and desires of the individual members of a
given society. Adam Smith is the Father of Modern Economics.
Economics as defined by authors of Economics books
 Paul Samuelson (Economics) – the study of how people and society end up choosing,
with or without use of money, to employ scarce resources that could have alternative
uses to produce various commodities among various persons and groups in society.
 Roger Le Roy Miller (Economics, Today and Tomorrow) – “economics concerns
situations in which choices must be made about how to use limited resources, when to
use them and for what purposes. Resources can be defined as the things people use to
make the commodities they want.”
 Hall and Loeberman (Macroeconomics: Principle and Applications) – the study of
choice under the condition of scarcity.
 Economics is the study of the proper allocation and efficient use of available scarce
resources in the production of goods and services for the maximum satisfaction of
human needs and wants. (Feliciano R. Fajardo).

Economics as a Science
Economics is a science because it is an organized body of truth, coordinated, arranged
and systematized with reference to certain general laws and principles. (Observation,
Formulation of theories, Gathering of data, Experimentation, Conclusion,
Generalization). It is regarded as a science because it uses scientific methods to build
theories that can help to understand how individuals, groups, and organizations interact
within the social structure to address key questions about the production and exchange of
goods and services.
Economic analysis seeks to explain economic events using some kind of logic based
on a set of systematic relations. It is a social science because the subject of economics is
people or societies and their behavior which is unpredictable in nature, a social science is,
broadly speaking, the study of society and how people behave and influence the world
around them. In addition, economics study were individual makes choices in allocating
scarce resources to satisfy their unlimited wants.

Essence/ Relevance of Studying Economics

 To understand the world better
Applying the tools of economics can help you understand global and disastrous events such
as wars, famines, epidemics, and depressions. Economics has the power to help us understand
these phenomena because they result from the choices we make under the condition of
scarcity.
  To gain self-confidence and become wise decisions makers
Mastery of economics will help you to understand how things work in your society thereby
“feeling equipped”.
 To achieve social change and contribute to National Development
Economics can help us understand the origins of serious social problems such as:
unemployment, hunger, poverty, disease, child abuse, drug addiction, violent crime. It will
also explain why previous efforts to solve these problems have failed, and help us to design
new, more effective solutions.

BASIC CONCEPT OF ECONOMICS

Scarcity is a condition where there are insufficient resources to satisfy all the needs and
wants of a population. Scarcity may be relative or absolute. Relative scarcity is when a good
is scarce compared to its demand. For example, coconuts are abundant in the Philippines
since the plant easily to grows in our soil and climate. However, coconuts became scarce
when the supply is not sufficient to meet the needs of the people. Relative scarcity occurs not
because the good is scarce per se and is difficult to obtain but because of circumstances that
surround the availability of the goods. Bananas are abundant in the Philippines and are being
grown in a lot of regions around the country. But when a typhoon destroys banana plants and
farmer has no bananas to harvest, then bananas become relative scarce. On the other hand,
absolute scarcity is when supply is limited. Oil is absolutely scarce in the country since we
have no oil wells from which we can source our petroleum needs, so we rely heavily on
imports from oil-producing countries like Iran and other Middle Eastern countries. Cherries
are absolutely scarce in our country since we do not have the right climate to grow them and
we have to rely on imports for our supply of cherries. This explains why cherries are very
expensive in the Philippines.
Opportunity cost. This refers to the value of the best foregone alternative. When land is
devoted exclusively to the cultivation of rice, we give up an output of bananas or mangoes
that we could have planted on that area. A producer, who decides to transform all his leather
into shoes, gives up the chance to produce bags with that leather. A school teacher, who
could have worked in the bank, gives up his salary as a manager. That salary is his
opportunity cost. Without scarcity, a person does not need to make choice since he/ she can
have everything he/ she wants.
Resources. These are things that used to make other goods.
Needs. These pertain to stuffs we must have to survive, generally: food, shelter, and clothing.
Wants. These pertain to stuffs we would really like to have (fancy food, shelter, clothing,
big screen TVs, jewelry, conveniences, also known as luxuries.
Goods. These are tangible (you can touch it) products we can buy.
Services. These are works that is performed for others.
Purchasing Power. This is the amount of goods and services that can be purchased with a
unit of currency
Opportunity Cost. This refers to the value of the best foregone alternative.
Trade-off. This is the thing is given up in order to get another.
Stuff. This refers to goods and services.
 C. Let Us Practice
Practice Task #1: Reflecting on needs versus wants
Understanding the difference between needs and wants that will help you to be
strategic about your spending.
Directions: Categorize your spending
Think of at least 10 things you and your family has bought or spent money on
recently. Record them in either the “Needs” or “Wants” column in the table below.
 Examples of needs might be food and school supplies.
 Examples of wants might be specialty coffees, designer clothing, and video games.
Write the answers on your answers sheet.

NEEDS WANTS

D. Let Us Remember
Nowadays we are facing a big economic crisis. These problems have a big
impact on our society and especially to the economic situation of our country. As Senior
High School Student, this is a big challenge. Most of us is facing challenges that needs
to be addressed; shortage of foods, commodities, increase in gasoline price, low
standard of living and other issued related to the needs of the family. Indeed, learning
the importance of Economics would be advantageous for you.

E. Let Us Practice More

Practice Task #2: Let’s React in the Scenario

Instruction: Choose from the given decision to help you decide what to do in the two
Scenario below.
SCENARIO 1
Consider that you are the Barangay Captain and you have ₱150,000 budget for the
lighting of the street lights and other facilities for your barangay. Then here’s the pandemic
came in the Philippines and to prevent the virus to spread in the country some Municipalities
and Barangays are put to lockdown the decision must be made next week and one of them is
your area. All establishments and transportation are ordered to stop its operations. You have
two choices described below base on the meeting with your barangay officials.
  Use the ₱150,000 budget for lighting of streetlights. This will provide more light for
the safety of citizen and driver that passed through in the barangay in the midnight to
lessen the crime.
 Use the budget for the medicine kit, medical equipment, relief goods and other needs
of the barangay to help their constituent.
Guided Questions: Please refer your answer from the above given scenario. Write the
answers on your answer sheet.
1. What would you do?
2. What is the opportunity cost of your decision?
3. What are the trade-offs of your decision?

SCENARIO 2
After you completed your basic education which is the K-12 program, most of your
parents have an expectation from you, that you will be able to find a job after your Senior
High School Program but if you will be given a choice what would you do after completing
the SHS Program?
 Look for a job immediately after SHS program or
 Pursue Bachelor’s Degree.

Guided Questions: Please refer your answer from the above given scenario. Write the
answers on your answer sheet.
1. What would you do?
2. What is the opportunity cost of your decision?
3. What are the trade-offs of your decision?

F. EVALUATION

Matching Type: Match Column A with Column B. White the letter of the correct
answer on your answer sheet.
A B
____ 1. Opportunity Cost a. good is scarce compared to its demand.
____ 2. Absolute Scarcity b. It refers to the value of the best foregone
____ 3. Trade-off c. one thing is given up in order to get another
____ 4. Economics d. supply is limited
____ 5. Relative Scarcity e. study of social behavior guiding in the
allocation of scarce resources.
 IV. RUBRIC FOR SCORING
Let us Practice More/ Practice Task 2

Components Needs Developing Sufficient Above

Improvement 2 3 Average
1 4
Clarity The purpose of The central The central The central
(supported by the student purpose of purpose of purpose of the
relevant work is not the student the student is student is clear
information will define. is identified. clear and and supporting
and ideas) The central Ideas are ideas are ideas are
ideas are not generally almost always well-
focus to focused in a always focused.
support the way that focused in a Details are
topic. supports the way that relevant,
topic. supports the enrich the
topic. work.
Organization Information Information Information Information
(sequence of and ideas are and ideas and idea are and idea are
elements/ poorly are presented in a presented in a
ideas) sequenced. presented in logical logical
The reader has an order sequence sequence
difficulty that the which is which flows
following the reader can followed by naturally and
thread of follow with the reader is engaging to
thought. minimum with little or the reader.
difficulties. low
difficulty.
Mechanics There are five There are There are no There are no
Correction of or more no more more than more than two
grammar and misspellings than four Three misspelled
spelling) and / or misspellings misspellings words or
systematic and / or and / or grammatical
grammatical systematic systematic errors in the
errors in the grammatical grammatical essay.
entire essay. error in the error in the
entire essay. entire essay.

V. ANSWER KEY

Let us Review
 1.B 3. A 5. A
2. D 4. D

Evaluation
1.B 3. C 5. A
2. D 4. E

Practice Task #1: Reflecting on needs versus wants

Understanding the difference between needs and wants that will help you to be
strategic about your spending. Write the answers on your answer sheet.

NEEDS WANTS
Shelter Fancy suits
Food Pool
Water Touch screen cell phone
Cloth Big screen TV
Education Ferrari
Medicine Jewelry
Transportation New make up
Utilities Branded cloth
Family Starbucks

Practice Task #2: Let’s React in the Scenario

SCENARIO 1
1. What would you do?
 I will use the budget to buy medicine kit, medical equipment, relief goods and
other needs of the barangay to help my constituent.

2. What is the opportunity cost of your decision?

 The opportunity cost of my decision, I have a supply of medicine kit, medical
equipment, relief goods needed of my constituent during lockdown because of
pandemic that hits in the Philippines.

3. What are the trade-offs of your decision?

 The trade-offs of my decision is the streetlight project for my barangay.

SCENARIO 2
1. What would you do?
a. I will look for a job immediately after I finish Senior High School.
b. I will pursue my Bachelor’s Degree to enroll college.

2. What is the opportunity cost of your decision?

a. I have an opportunity to support my family needs.
 b. If I pursue to enroll college and finish my study, I have a opportunity to get
better job.

3. What are the trade-offs of your decision?

a. The trade-off of my decision to get a job is the opportunity to pursue my

Bachelor’s Degree.
b. The trade-off of my decision to enroll is the opportunity to support the needs
of my family.

VI. REFERENCE

Madrid, Joana Marie J. (2020) Applied Economics- Grade 12 Quarter 1- Module 1:

Economics as an Applied Science Region V

Prepared by: Reviewed by:

HENDRISSA DEBLOS-SICAD RAWDEM P. BITANCOR

Master Teacher I- Senior HS Group Head- ABM

Noted: Approved by:

MARIVIC A. AŃONUEVO SALVE E. FERRERAS

Assistant Principal II- SHS Secondary School Principal III
 Schools Division of Sorsogon
BULAN NATIONAL HIGH SCHOOL
Bulan, Sorsogon

Summative Test No.1

APPLIED ECONOMICS

I. Arange the jumbled letters and define the terms.

JUMBLED LETTERS DEFINITION

1.NWTSA

2.CRASYCIT

3.DSENE

4.REDAT FSFO

5.CEOMICONS

II. Concept Map

Write a word/ concept related to economics and from your work, after you are done with the
concept web, define economics by choosing from the words you given in the concept web. Write the
answers on your answer sheet.

ECONOMICS

Prepared by: Reviewed by:

HENDRISSA DEBLOS-SICAD RAWDEM P. BITANCOR

Master Teacher I- Senior HS Senior HS Group Head- ABM
Noted: Approved by:

MARIVIC A. AŃONUEVO SALVE E. FERRERAS

Asst. Principal II- Senior HS Secondary School Principal III