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APPLIED ECONOMICS
(Quarter 3, Module 4)

Determine the Implications of Market Pricing on Economic


Decision - Making
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region VII, Central Visayas
DIVISION OF CITY SCHOOLS
City of Naga, Cebu

GRADE 12 ABM – ADM LEARNING RESOURCE


Applied Economics
(Quarter 3 – Module 4)

I. Introduction / Learning Objectives


Buyers and sellers play a significant role in the marketplace. A lot of studies have
been published regarding how demand and supply affect the commodities prices. In this
module, we are more focused on discussing and analyzing how the prices of different
commodities impact the consumers.
Prices of commodities can go up, stabilized or go down. Learning an idea of the
basic knowledge on “how and why” the price of good and services increase and decrease
in our country. It widened your understanding on what are the factors that affect the prices
of commodities and how this affects the buying behaviour and purchasing power of the
consumers.
Furthermore, there are some activities that capture your interest to better understand
the lesson. These activities will measure your decision making and learning to approve
judgment in a particular situation. It will also give you practical scenarios that will help you
in your buying decisions.

After going through this module, you are expected to:


1. Compare the prices of commodities; a n d
2. Analyze the impact on consumers.

II. Pre-Test

Multiple Choice: Encircle the letter that corresponds to the correct answer.

1. Which of the following will result to a shift in the demand curve?


A. Income C. Season
B. Taste D. All of these
2. In a demand function, if the price is zero, quantity demanded is equal to _ _.
A. Zero C. Slope
B. Intercept D. None of these
3. Demand curve will shift to the right because , other factors remaining constant.
A. Income decreases C. Price of the commodity id expected to increase
B. Population decreases D. All of these
4. The law of demand refers to the:
A. Positive relationship between price and quantity demanded
B. Inverse relationship between price and quantity supplied
C. Inverse relationship between price and quantity demanded
D. Positive relationship between price and quantity supplied
5. Which of the following would cause the demand to increase, other factors held constant?
A. Increase in household income C. Decrease in the price of a substitute good
B. Increase in price D. None of the above
6. Which of the following is not a determinant of supply?
A. Number of sellers C. Price expectations
B. Cost of production D. None of these
7. Supply curve will shift to the _ when the price of the commodity is expected to
increase tomorrow, other factors remaining constant.
A. Right C. All of these
B. Left D. None of these
8. Assuming that a typhoon devastated the rice farm in Central Luzon, what will happen to the
supply of rice assuming other factors remain constant?
A. Supply will decrease C. Supply will remain the same
B. Supply will increase D. None of these
9. Market equilibrium exists when Qs is _ than/to Qd.
A. Greater C. Equal
B. Less D. None of these
10. Surplus will _ the price of a commodity.
A. Increase C. Not change
B. Decrease D. None of these

III. Lesson Proper

Review
Directions: Compare the price below of the basic commodities and answer the proceeding
questions.

1 Sack 1 Sack
Rice Corn

Price Cost-2,400.00 Pesos Price Cost-2,000.00 Pesos


Questions:

1. With the two variety of rice shown above, which will you prefer? A sack of rice priced
at 2,400 or a sack of corn priced at 2,000? Why?
_
_
_
_ _
_

2. What are the things will you consider when buying products?
_
_
_
_
_

Discussion
Price of basic commodities

Commence with of commodity is any tangible item that can be bought and sold.
Like an oil, rice, fruits, vegetables and meat. Price will be affected to the demand of the
commodity of the consumers. When there will be rise of price of chicken meat also there will
increase of price in a beef. It is called as substitute goods. However, when there is low
stock of rice there will be higher increase of price of a corn is it called as complement
goods. The basic prices of commodities will be affected on supply and demand of a
particular good.
Talking about supply and demand that if the price increases the demand decreases
while decreasing the price if the supply increases. Demand is the consumer what they
needs however supply is the product the consumer needs. Look at the diagram below on
the cycle of supply and demand.

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Supply

Decrease Price Commodity Increases Price Commodity

CYCLE OF LAW OF
SUPPLY AND
DEMAND

Demand

Buying Behaviour of Filipinos

In term buying behaviour of Filipino have unique characteristics as consumers since


they buy a durable product for long term used. It should be suit up with their preferences,
behaviour brand loyalty, advertising and value of money.

1. Preference – is the way it fit in to his/her beauty, hygiene, health and


convenience.
2. Behaviour brand loyalty – they prefer brand types of product.
3. Advertising – commercial affects preferences in buying products.
4. Value of money – choosing affordable products.

Basic commodities vs. Prime Commodities

There are things that you want to buy like cell phone, laptop, tablet, and any gadgets
you love to buy. Delicious food you can buy in the mall and in the market. You want to buy
wonderful dresses and stylist shoes. You want expensive cars and motorcycle that fit your
convenience. However there things you buy for daily needs like rice, meat, beef, fruit, and
vegetable.

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Basic commodities is different in prime commodities, basic commodities is the thing that
you really need while prime commodities the things you like to buy for yourself.
Example:

Basic Commodities:

o Firewood
o Charcoal
o Cooking oil
o Salt

Prime Commodities

o Cell phone
o Cars
o Tablets
o Laptop

Equilibrium is a state of balance when demand is equal to supply. The equality means that the
quantity that sellers are willing to sell is also the quantity that buyers are willing to buy for a price.
As a market experience, equilibrium is an implicit agreement between how much buyers and
sellers are willing to transact. The price at which demand and supply are equal is the equilibrium
price.
The price of a good in the market is the equilibrium price. It is the price at which
the quantity demanded is equal to the quantity supplied. This is how most commodities in the
market are priced by their producers or sellers.

Market equilibrium is attained when the quantity demanded is equal to the quantity supplied.

Qd = Qs

IV. Enrichment Activities


Activity 1.1: Directions: Direction: Apply the Law and supply in term of price of
commodities. Write INCREASE or DECREASE of price.

Product Price

1. Higher Demand

2. Lower Demand

3. Higher Supply

4. Lower Supply
1. Substitute goods are typically consumed together.

Student’s
explanation:

2. When income rises, the demand for the product will increase, when income falls, the
demand for the product will decrease.

Student’s
explanation:

Activity 1.2: Directions: Compare the following commodities and write the Basic
Commodities and Prime Commodities in separate column.

o Firewood
o Cars
o Tablets
o Cell phone
o Salt
o Laptop
o Charcoal
o Cooking oil

Basic Commodities Prime Commodities

V. Generalization

What I have learned?


_

VI. Application

Directions: Provide your own ideas regarding the given statement below.

1. Cite specific products that you will still buy even though the price will increase. Why?

2. Cite specific products that you will not buy if the price will increase? Why?

3. How does the price of the product influence your buying decision?

__

VII. Assessment

Multiple Choice: Encircle the letter that corresponds to the correct answer.

1. Which of the following will result to a shift in the demand curve?


A. Income C. Season
B. Taste D. All of these
2. In a demand function, if the price is zero, quantity demanded is equal to _ _.
A. Zero C. Slope
B. Intercept D. None of these
3. Demand curve will shift to the right because , other factors remaining constant.
A. Income decreases C. Price of the commodity id expected to increase
B. Population decreases D. All of these
4. The law of demand refers to the:
A. Positive relationship between price and quantity demanded
B. Inverse relationship between price and quantity supplied
C. Inverse relationship between price and quantity demanded
D. Positive relationship between price and quantity supplied
5. Which of the following would cause the demand to increase, other factors held constant?
A. Increase in household income C. Decrease in the price of a substitute good
B. Increase in price D. None of the above
6. Which of the following is not a determinant of supply?
A. Number of sellers C. Price expectations
B. Cost of production D. None of these
7. Supply curve will shift to the _ when the price of the commodity is expected to
increase tomorrow, other factors remaining constant.
A. Right C. All of these
B. Left D. None of these
8. Assuming that a typhoon devastated the rice farm in Central Luzon, what will happen to the
supply of rice assuming other factors remain constant?
A. Supply will decrease C. Supply will remain the same
B. Supply will increase D. None of these
9. Market equilibrium exists when Qs is _ than/to Qd.
A. Greater C. Equal
B. Less D. None of these
10. Surplus will _ the price of a commodity.
A. Increase C. Not change
B. Decrease D. None of these

VIII. Additional Activities

Directions: Read it carefully and follow the procedure given.

1. You will choose two stores in your community.


2. Try to investigate on how they put a price to a particular product or item in their stores.
3. Compare the Price Basic Commodity in their both store.
4. Interview a consumer on what is the impact price of commodities to them.
5. Write a scenario on how the price is given by the two stores and try to compare their
prices of commodities.
6. Give impact to the consumers in term of price of commodities they put to their
product.
Write here:
Kindred B. Sabellano – T2
Tuyan Senior High School
( Writer )
Prepared By :

Richille G. Sevilla– T1
Don Emilio Canonigo Senior High School
( Co - writer )

EDGAR GONZAGA
Education Program Supervisor in MATH
(Content / Language Evaluator / Reviewer)

MERLY J. OMAMBAC
Quality Assurance Team
Education Program Supervisor in LRMDS
(Language Evaluator / Reviewer)

BENIGNO S. GONZAGA
Division Illustrator (Designate)
(Lay-out Artist / Evaluator)

Recommending Approval GENDA P. DE GRACIA, Ed. D.


Chief Education Supervisor, CID

Approved ROSALIE M. PASAOL, Ed. D., CESO V


School Division Superintendent
Republic of the Philippines
DEPARTMENT OF EDUCATION
Region VII, Central Visayas
DIVISION OF CITY SCHOOLS
City of Naga, Cebu
RUBRICS
IDEAS / THOUGHTS
POINTS 5 3 2
Item No. 1 VERY informative Average informative Less informative but has
and has lots of ideas and has of ideas of ideas

Item No. 2 VERY informative Average informative Less informative but has
and has lots of ideas and has of ideas of ideas

TOTAL SCORE
10 / 10

Activity 1.2

Basic Commodities Prime Commodities


FIREWOOD CARS
SALT TABLETS
CHARCOAL CELL PHONE
COOKING OIL LAPTOP

II. GENERALIZATION

RUBRICS
POINTS 15 13 10
CONTENT : IDEAS / VERY informative Average informative Less informative
THOUGHTS and has lots of ideas and has of ideas but has of ideas

III. APPLICATION

RUBRICS
IDEAS / THOUGHTS
POINTS 5 3 2
Item No. 1 VERY informative Average informative Less informative but has
and has lots of ideas and has of ideas of ideas

Item No. 2 VERY informative Average informative Less informative but has
and has lots of ideas and has of ideas of ideas

Item No. 3 VERY informative Average informative Less informative but has
and has lots of ideas and has of ideas of ideas

TOTAL SCORE
15 / 15
IV. ADDITIONAL ACTIVITIES

RUBRICS
POINTS 15 13 10
CONTENT : IDEAS / VERY informative Average informative Less informative
THOUGHTS and has lots of ideas and has of ideas but has of ideas

Republic of the Philippines


DEPARTMENT OF EDUCATION
Region VII, Central Visayas
DIVISION OF CITY SCHOOLS
City of Naga, Cebu

References:
Book

• Rosemary P. Dinio, PhD and George A. Villasis. 2017. Applied Economics First Edition.
Quezon City: Rex Book Store Inc., 2017.
• Elsa T. Silon; Ramon A. Bernardo and Melani C. Quilloy. 2009. Manual for Economics with
Work Exercises. Manila: Rex Book Store, Inc.

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