Applied Economics Q3 Module 2

11 SENIOR HIGH SCHOOL
APPLIED
ECONOMICS
Quarter 3 – Module 2
The Utility and Application of Applied Economics
to Solve Economic Issues and Problems
NegOr_Q3_AppliedEconomics11_Module2_v2
Applied Economics – Grade 11
Alternative Delivery Mode
Quarter 3 – Module 2: The Utility and Application of Applied Economics to Solve
Economic Issues and Problems
Second Edition, 2021
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our dear learners, can continue your studies and learn while at
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i NegOr_Q3_AppliedEconomics11_Module2_v2
I
This module was designed to provide you with fun and meaningful opportunities for
guided and independent learning at our own pace and time. You will be enabled to process
the contents of the learning resource while being an active learner.
The module is intended for you to examine the utility and application of applied
economics to solve economic issues and problems.
1 NegOr_Q3_AppliedEconomics11_Module2_v2
I
Task 1: Let’s check your prior knowledge…
The activity aims to give you a clear understanding of examining the utility and
application of applied economics to solve economic issues and problems.
Directions: Analyze what economic resources or factors of production the following pictures
and statements fall. Choose a word (Land, Labor, Capital) that best describe what is given
below.
Economic resources- are resources used to produce goods and service
1. 7.
Photo taken by Ravelo, 2014 Photo taken from Freepik, n.d.

2. 8.
Photo taken by Rabich, 2012 Photo taken by Floro, 2014

3. 9.
https://www.sillem.tech/new-
Photo taken by Tulea, n.d. machineries-2018/
4. Soil and natural resources that are 10. Owners of lands receive a payment
found in nature and are not man-made known as rent
5. Physical and human effort exerted in 11. The income received by labors referred
production as wage
6. Man-made resources used in the 12. Includes machinery and equipment
production of goods and services
’s In
Task 1 implies the Economic resources, also referred to as factors of production.

These are the resources used to produce goods and services. But these resources are, by
nature, limited and so, command a payment that becomes the income of the resource owner.
Production refers to the process of producing, manufacturing or creating goods
needed by the households to satisfy their needs.
Task 2: Let’s arrange it…

Identify and classify the pictures/text shown within the box whether it is goods and
either services. Write/draw it in your activity notebook.
Doctors
FRUITS
Shoes Police
Goods Services
1. ____________ 1. _____________
2. ____________ 2. _____________
’s New
I think you’re doing great in the activities given above. Congratulations!
Task 3: Let’s solve problems in our economy…
We are facing global crisis today which is Covid-19. This does not respect national
boundaries - and it made countries to work together to find solutions. The global
community has shown that we can work together with government, businesses and
individuals taking measures to address the global crisis caused by the Covid-19 pandemic.
As member of the society, what will you provide to help lessen or stop the spread of the
virus.
Analyze the economic crisis cited above. You may answer questions based on the
Basic Economic Problems of Society. Write your answers in your activity notebook.
1. What to produce and how much?
What to Drawing How much Nature of goods Quantity of the

produce or services will goods to
(goods or (goods or be produced produce
services) at services)
least 2
1.
2.
2. How to produce?
This refer to the production method that will be used to produce the goods or services. It
also refers to the resources and technology that will be applied in production. You can
refer to the Economic resources (land, labor, capital)
3. For whom to produce?

For whom will the goods and services be produced?
(male or female, the young or old, low or high income groups, so on…)
4. Do you think the goods and services that are produced are in accordance with
consumer’s utility or usefulness? Why?
is It
The matter of scarcity is a central economic problem in all countries without

exception. This issue arises since all resources are limited and have different uses. The
economic dilemma would most likely not exist if resources were unlimited. Scarcity of
resources, whether natural productive resources, man-made capital/consumer goods, money,
or time, is the key issue.
What are Economic Resources?
Economic resources, also called factors of production, are the resources used to produce
goods and services. These resources are, by nature, limited and so, command a payment that
becomes the income of the resource owner (Dinio & Villasis, 2017, p. 3).
1. Land - soil and natural resources that are found in nature and are not man-made.
Owners of lands receive a payment known as rent
- these resources consist of gifts of nature which include:
 Soil
 Rivers
 Lakes, oceans
 Forests
 Mountains
 Mineral resources
- land is considered an economic resource because it has a price attached
to it.
2. Labor - physical and human effort exerted in production.

- also called “human resources” or all human efforts, be it mental or
physical, that help to produce satisfying goods and services.
- it covers manual workers like
 Construction workers
 Machine operators
 Production workers
As well as professionals like
 Nurses
 Lawyers
 Doctors
The terms also include
 Jeepney drivers
 Farmers
 Fishermen
In return, he earns an income in the forms of wages and salaries.
3. Capital - man-made resources used in the production of goods and services like:
 Machinery
 Equipment
Two (2) economic definitions of capital:

A. Capital - can represent the monetary resources use to purchase natural
resources.
Example:
Companies use capital to buy land and other goods
B. Capital - represents the major physical assets individuals and
companies use when producing goods and services
Example:
Buildings, vehicles, equipment
4. Entrepreneurs -organizers and coordinators of other factors of production: land,

labor, and capital.
-someone who uses his initiative, talent and resourcefulness to
create economic goods and services
5. Foreign Exchange -refers to the dollar and dollar reserves that the economy has.
-foreign exchange is part of economic resources because we need
foreign currency for international trading and buying materials
from other countries.
- International medium - dollar
Figure 1. Factors of Production (Pinterest, n.d.).
This central problem gives rise to four basic economic problems, and in this module, we
will look at these basic problems in detail.
The Four (4) Basic Problems of an Economy
The central economic problem of scarcity of resources is broken down into four basic problems
of an economy (Toppr, n.d.).
1. What to Produce?
What happens when a society's resources are limited? It chooses which goods and
services to produce. Furthermore, it establishes the required quantity. Should we make
more firearms or more butter, for example? Do we prefer capital items, such as machines
and equipment, or consumer products, such as cell phones? While it may appear simple,
society must choose the type and quantity of each and every commodity or service to be
produced.
2. How to Produce?
A variety of ways can be used to create a product. Cotton cloth, for example, can be
made on handlooms, power looms, or automatic looms. Automatic looms, on the other
hand, demand more power and capital investment than hand looms.
As a result, society must select between different methods of producing the item.
Similarly, identical decisions are required for all goods and/or services. Furthermore, the
choice is based on the availability of various production factors as well as their pricing.
Typically, a society chooses a method that makes the best use of its resources.
3. For whom to Produce?

Consider this: can a civilization satisfy all human desires? Definitely not. As a result, it
must determine who receives what proportion of the overall production of goods and
services generated. In other words, society determines how goods and services are
distributed among its members.
4. What provision should be made for economic growth?
Is it possible for a society to consume all of its resources in the present? Yes, it is
possible. However, this is unlikely to happen. The reason is straightforward. A society's
productive potential will never increase if all of its resources are used for current
consumption.
As a result, a member of society's standard of life and income will remain consistent. As
a result, the level of living will deteriorate in the future. As a result, society must decide
how much of its resources it wishes to set aside for future advancement.
Examples of the Economic Problem
Consumers
Households have a finite amount of money to spend, and they must pick how to spend
it. For example, a household with a yearly income of P84,000 may need to spend P30,000 on
rent and P10,000 on electricity bills each year. This leaves P44,000 (or P 3,666.67 a month)
to spend on other food, clothing, transportation, and other necessities.
Workers
Households will also have to decide how much they want to work. Working overtime
on weekends, for example, will provide them with additional cash but less leisure time to
enjoy it. A worker could also want to devote more time to developing new skills and
qualifications. This may reduce their earning potential in the short term, but it will allow
them to earn more in the long run. For example, at the age of 18, a student might either go
directly to work or attend university in the hopes of receiving a degree and increasing their
earning potential in the long run.
Producers
A producer must maintain a profit margin (revenue higher than costs). As a result, it
will need to manufacture high-demand goods and adjust to changing consumer expectations
and purchasing behaviors, such as shifting to online sales as the high street diminishes.
Producers will have to constantly ask themselves what is the best approach to produce goods.
Purchasing new machines, for example, can boost production and allow businesses to create
items at a lesser cost. This is critical in industries that are constantly changing and where new
technology is continually lowering manufacturing costs. Firms can become unprofitable if
they do not alter their production methods.
Firms may also be required to make long-term investment decisions in new products
and production methods.
Government
The government has restricted resources, and its spending authority is constrained by
the amount of revenue it can raise. The government must first determine how it will collect
taxes, and then it must choose how it will spend those funds. For example, the government
may decide to reduce subsidies for low-income people in order to encourage them to work.
Cutting benefits, on the other hand, will exacerbate inequality and relative poverty.
Opportunity Cost and the Economic Problem
The concept of opportunity cost can be used to highlight the economic problem.
according to Economicshelp.org, n.d.
Opportunity cost is the next best alternative foregone. When land is dedicated solely
to rice cultivation, we forfeit an output of bananas or mangoes that could have been planted
on the same plot of land. A producer who decides to turn all of his leather into shoes foregoes
the opportunity to make bags out of it. A school teacher who could have worked at a bank
foregoes the salary she would have received if she had worked in a bank. A manager who
resigns from his position to pursue a master's degree forfeits his compensation as a manager.
His opportunity cost is his pay. A person does not need to make decisions if there is no
scarcity because he or she can have anything they desire.”
Individuals, corporations, and even a community can all benefit from the concept of
opportunity cost. There are trade-offs to be made while making a decision. The opportunity
cost of going to the movies is the worth of other things you could have purchased with that
money, such as a pint of ice cream, a fast food combination meal, or a basic t-shirt for PE
class. Another example is giving up work in favor of a recreational activity, such as going on
a vacation to Boracay for a week without pay. Then you’re giving up money you would have
made if you hadn’t decided to go on the trip.
Government in the concept of opportunity cost
A government may have options when it comes to allocating limited resources. They
have a choice whether to spend between health care and military. If they spend more on the
military, they will have less money to spend on health care.
How these questions are answered depends on the nature of the economic system in
place. The economic system is the means by which society answers the basic economic
problems.
Economic Systems
The economic system is the mechanism through which society determines the solutions
to the aforementioned basic economic issues. The factors of production, such as land, capital,
labor, and physical resources, are regulated by economic systems. An economic system is made
up of a variety of organizations, agencies, companies, decision-making processes, and
consumption patterns that make up a community's economic structure.
Any of the four economic systems, or perhaps a combination of them, can govern a
country:
1. Traditional economy
Traditions and customs that have been passed down from generation to generation are
used to make decisions. Methodologies are stale and so unprogressive. Traditional communities
can be found in both advanced and primitive cultures.
Traditional economies rely on agriculture, fishing, hunting, gathering, or a combination

of these activities. Instead than using money, they use barter. Emerging markets and developing
countries are home to the majority of traditional economies.
Figure 2. Five Traits of a Traditional Economy (Amadeo, 2021).
2. Command economy
This is a centralized decision-making system in which the government or a planning

committee makes decisions. People who do not have a say in what things are created are forced
to make decisions. This economics applies to authoritarian, socialist, and communist countries
alike.
A crucial aspect of any communist society is the command economy. Countries with
command economies include Cuba, North Korea, and the former Soviet Union, while China had
a command economy for decades before shifting to a mixed economy with both communist and
capitalist aspects.
Figure 3. Characteristics of Command economy, Economicshelp.org, n.d.
3. Market economy
This is the most democratic economic system available. Decisions about what
commodities and services to manufacture are made based on the workings of demand and
supply. People's preferences are reflected in the prices they are prepared to pay in the market,
and as a result, producers' judgments on what goods to produce are based on their
preferences.
Figure 4. Features of an Open Market Economy (Learn.Robinhood, 2020)
Market economies can be found in the United States, England, and Japan. A
command economy, on the other hand, is run by a centralized government that owns most, if
not all, firms and directs all production components.
4. Mixed Economy
A mixed economy is a system that blends market, command, and traditional economic
elements. It has the benefits of all three while only having a few of the downsides.
Three of the following characteristics of a market economy are present in a mixed

economy. For starters, it safeguards private property. Second, it allows pricing to be
determined by the free market and supply and demand laws. Third, it is driven by individual
self-interest motivation.
Economic Utility
Economic utility must be considered in the midst of our society’s limited resources to
determine the usefulness or value that consumers derive from a product or service, and can be
judged based on the form, time, place, and possession; these factors aid in assessing purchase
decisions and the factors that drive those decisions.
Economic Utility gives a relative measure of a product’s satisfaction. The product’s
utility may be assigned based on the customer's requirements. It is entirely dependent on a
customer's requirements and preferences.
Utility increases only if
the customer possesses a
product
Different forms Introducing a

of a product particular product
may possess at the time when a
customer is in its
(or create)
need will increase
different levels
utility
of utility
A product’s utility is
maximum only at such a
place where its
requirement is created.
Figure 5. Four Types of Economic Utility.
From an economic standpoint, it is critical to comprehend a product's or service's

utility. It may vary depending on the situation, but it still provides a general acceptance or
rejection of the products. The economic utility of a product also refers to the needs and
expectations of buyers, as well as any flaws in its characteristics (if any). A decrease in the
utility of a product in the market could imply the introduction of new technology or improved
versions. Existing businesses will benefit from this.
Measuring the Economy
It is beneficial that students get to learn first how the growth of the economy is
actually measured. One way to measure economic growth is to account Gross Domestic
Product (GDP) and Gross National Product (GNP).
Gross domestic product (GDP) is the value of a nation’s finished domestic goods and
services during a specific time period, while the Gross National Product (GNP), is the value
of all finished goods and services owned by a country (Seth, 2021).
From the standpoint of what the economy has been, every government aims for a
stronger economy. The future of the economy is being shaped through shifting past and
current perspectives into the future. Looking ahead, in particular, is based on the economy’s
past and present performance and health. Production is at the center of the economy, and its
value reflects both resource input and human output.
How to Calculate the Gross National Product?

According to Corporate Finance Institute, “Personal consumption expenditures,
government expenditures, private domestic investments, net exports, and all income made by
residents in foreign countries, minus income gained by foreign residents within the domestic
economy, are all added together to compute GNP. The value of imports is subtracted from the
value of the country's exports to determine net exports.”
Unlike Gross Domestic Product (GDP), which measures the value of goods and
services based on where they were produced, Gross National Product measures the value of
goods and services based on where they were owned. It is calculated as the value of a
country's GDP plus any income earned by citizens from overseas investments, minus income
earned by foreign residents inside the country. Because these entries are included in the value
of the final products and services, GNP eliminates the value of any intermediary commodities
to avoid double counting.
The official formula for calculating GNP is as follows:
Y = C + I + G + (X - M)
Where:
C – Consumption Expenditure
I – Investment
G – Government Expenditure
M – Imports (Value of imports minus value of exports)
Z – Net Income (Net income inflow from abroad minus net outflow to foreign countries)
Alternatively, the Gross National Product can also be calculated as follows:

GNP = GDP + Net Income Inflow from Overseas – Net Income Outflow to Foreign
Countries
Where:
GDP = Consumption + Investment + Government Expenditure + Exports – Imports
Manufacturing of physical commodities such as vehicles, agricultural products,
machinery, and so on, as well as the supply of services such as healthcare, business
consulting, and education, are all included in GNP. Taxes and depreciation are included in
GNP. Because the cost of services utilized in the production of items is included in the cost of
finished goods, it is not computed separately.
To produce real GNP, Gross National Product must be adjusted for inflation for year-
to-year comparisons. GNP is also expressed per capita for country-to-country comparisons.
There are challenges in accounting for dual citizenship when computing GNP. If a producer
or manufacturer is a dual citizen of two nations, his productive output will be considered by
both countries, resulting in double counting.
Importance of GNP
The Gross National Product (GNP) is one of the most important economic
indicator used by policymakers. GNP provides vital data on manufacturing, savings,
investments, employment, significant company production outputs, and other economic
indicators and this data is used by policymakers to create policy papers that legislators use to
pass laws. GNP data is used by economists to solve national issues such as inflation and
poverty.
GNP becomes a more trustworthy statistic than GDP when assessing the amount of
income earned by a country's citizens independent of their location. Individuals in the
globalized economy have various options for earning money, both domestically and
internationally. GNP gives information that other productivity measurements do not
incorporate when measuring such wide data. If a country's citizens were limited to domestic
sources of income, GNP would be equivalent to GDP, and it would be less valuable to the
government and policymakers.
GNP information is also useful for examining the balance of payments. The
difference between a country's exports to foreign countries and the value of the items and
services imported determines the balance of payments. When a country has a balance of
payments deficit, it indicates it imports more goods and services than it exports. A surplus in
the balance of payments means that the value of the country’s exports exceeds the value of its
imports.
’s More
Task 4
Let’s check your understanding…

Directions. Give what is asked for in each item. Write your answers in your notebook.
1. Economic resources are the factors for production to produce goods and services. These
factors will be utilized to meet consumer’s utility despite of the scarce resources that we have
in our society and to help solve economic problems. Supply words inside the chart that
correspond to the given economic resources according to the following: factor,
characteristics, examples, rewards.
*Labor *Capital *Entrepreneurship * Land
*Physical+mental input *Land+Extracted Resources
*Fixed+Working capital *Organization of Factors
*Manager *Machinery *Farm+Crops *Workforce
*Wages *Rent *Interest *Profit
Factor Characteristics Examples Rewards
2. How are the fundamental questions or the basic questions in the economy help best to
produce and distribute scarce resources?
3. Cite one (1) situation where you may have given up an opportunity in your life over
another opportunity. State the reason why you gave up such choice and choose the other.
4. How does economic system help to solve economic issues and problems in an economy?
5. How does GNP help solve economic issues and problems in our country?
I Have Learned
Task 5: Let’s reflect and realize…
Direction: In your notebook, complete the following statements.
1. I have learned that

__________________________________________________________________
2. I have realized that

__________________________________________________________________
3. I will apply what I have learned
__________________________________________________________________
I Can Do
Task 6: Let’s decide for the economy…
Direction: Do what is instructed below. Write your answers in your notebook.
The Philippines has a mixed economic system which includes a variety of private
freedom, combined with centralized economic planning and government regulation.
❖ By yourself, draw a picture that represents a characteristic of the Philippine

economic system.
❖ Your picture must have color and it must be neat.
❖ Make sure you title your drawing with the characteristic you have chosen.
❖ Provide a sentence that explains what it is that you drew and how it relates to
the characteristic you chose. Also, include in your explanation how this
economic system gives benefit in Philippine economy
CRITERIA
OUTSTANDING (20pts)
Responds to the expressive qualities of the arts and recognizes particular elements of the work;
expresses an informed personal response to artistic works using relevant
information and relating personal responses to the work(s).
EFFECTIVE (17pts)
Responds to the expressive qualities of the arts; expresses an informed
personal response to of the arts using relevant information and relating, the
personal responses to the work(s).
ADEQUATE (10pts)
Responds to works of art and expresses a personal response to the
work(s) using relevant information and personal observations.
INEFFECTIVE (5pts)
Does not express a personal response to artistic works.
Task 7: Let’s check it out…
Directions: Read carefully the statements or questions below and write your answers on your
activity notebook.
I. Identify which resource is referred to by the following words
______________________ 1. Organizer and coordinator of land, labor, capital

______________________ 2. Call center agents
______________________ 3. Forests
______________________ 4. Teachers
______________________ 5. Minerals
______________________ 6. Technology
______________________ 7. Marine resources
______________________ 8. Nurses
______________________ 9. Medical equipment
______________________10. Dollar or dollar reserves
II. Describe the type of economic system characterized in each of the following sentences.
______________________ 1. Prices are based on demand and supply

______________________ 2. Both private and government owned entities that share control
of owning, making, selling, and exchanging good in the
country
______________________ 3. The government decides on what goods should be produced.
______________________ 4. People enjoy freedom of choice in arriving at decisions on
what to buy.
______________________ 5. Ancient methods are used in deciding what goods to produce.
______________________ 6. People have no freedom of choice in arriving at decisions on
what to buy.
_______________________7. Economy is stagnant, making use of practices on the olden
times.
_______________________8. Blending elements of a market economy with elements of a
planned economy, free markets with interventionism.
_______________________9. People’s preferences are reflected in the prices they are
willing to pay in the market.
______________________10. It exists in primitive and backward civilizations.
III. Given the table below are the data in calculating GNP/GDP by expenditure approach.
Arrange the following variables according to the given official formula in calculating
GNP by supplying blanks below the table. Copy the format in your activity notebook where
you are going to write your answers. Here, is the official formula for calculating GNP
Y = C + I + G + (X-M)
Types of Expenditure Amount (In million Pesos)
Capital formation ₱ 1,849,380
Household final consumption ₱ 6,442,033
Exports ₱ 3,133,507
imports ₱ 3,296,732
Government final consumption ₱ 875,291
Net factor income from the rest of the world ₱ 1,848,952
1. _____________________ ₱ _______________
2. _____________________ _______________
3. _____________________ _______________
4. _____________________ _______________
5. Less: ________________ _______________
Gross domestic product ₱ _______________
6. _____________________ _______________
Gross national product ₱ _______________
Task 8: Let’s go beyond…
Identification of priorities of the Economic Budget, (DBM, 2021)
Directions. Examine The Philippine National Budget for 2021 and answer the questions
below. Write it in your activity notebook.
Questions:
1. Based on the proposed budget for 2021, what expenditures are the government’s top
priorities and least priorities?
________________________________________________
________________________________________________
________________________________________________
2. Why do you think the allocation of budget per sector is not divided equally?
________________________________________________
________________________________________________
________________________________________________
NegOr_Q3_AppliedEconomics11_Module2_v2 22
What’s more What I have learned
1. Answers may vary
What can I do
Answers may vary
2. Answers may vary Additional Activities
3. Answers may vary Answers may vary
4. Answers may vary
Assessment
I. 1. entrepreneur 2. labor 3. land 4. labor 5. land 6. capital
7. Land 8. labor 9. capital 10. foreign exchange
II. 1. market 2. mixed 3. command 4. market 5. traditional
6. command 7. traditional 8. mixed 9. market 10. traditional
III. 1. Household final consumption P 6,442,033
2. Government Final consumption 875,291
3. Capital formation 1,849,380
4. Exports 3,133,507
5. Less: Imports 3,296,732
Gross domestic product 9,003,479
6. Net factor income from the rest of the world 1,848,952
Gross National Product 10,852,431
Glossary
Utility - term in economics that refers to the total satisfaction received from consuming a
good or services.
Opportunity Cost - represent the potential benefits an individual, investor, or business
misses out on when choosing one alternative over another.
GNP - (Gross National Product) is the sum of all domestic and foreign output created by
citizens of a given country. It can be measured by spending or by income.
GDP - (Gross Domestic Product) final value of goods and services produced within the
geographic boundaries of a country during a specified period of time, normally a year.
Expenditure - is money spent on something
Consumer - the one who pays to consume the goods and services produced by a seller.
Producer - someone who creates and supplies goods or services
Goods - are items that satisfy human wants and provide utility
Services - an economic activity where an immaterial exchange of value occurs (e.g., labor)
References
Books
Dinio, R. and Villasis, G. Applied Economics (1st ed.). 2017. Sampaloc, Manila: Rex
Bookstore, Inc.
Online Sources
Toppr. Basic Problems of an Economy. n.d. Accessed on December 13, 2021.

https://www.toppr.com/guides/business-economics/introduction-to-business-
economics/basic-problems-of-an-economy/
Amadeo, K. Traditional Economy With Its Characteristics, Pros, Cons, and Examples. 2021
Accessed on December 13, 2021. https://www.thebalance.com/traditional-economy-
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Applied Economics Q3 Module 2

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Applied Economics Q3 Module 2

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11 SENIOR HIGH SCHOOL

Published by the Department of Education

Development Team of the Module

Printed in the Philippines by ________________________

Department of Education –Region VII Schools Division of Negros Oriental

Office Address: Kagawasan, Ave., Daro, Dumaguete City, Negros Oriental

This Self-Learning Module (SLM) is prepared so that you,

Task 1: Let’s check your prior knowledge…

Photo taken by Ravelo, 2014 Photo taken from Freepik, n.d.

Photo taken by Rabich, 2012 Photo taken by Floro, 2014

Task 1 implies the Economic resources, also referred to as factors of production.

Task 2: Let’s arrange it…

I think you’re doing great in the activities given above. Congratulations!

Task 3: Let’s solve problems in our economy…

What to Drawing How much Nature of goods Quantity of the

3. For whom to produce?

The matter of scarcity is a central economic problem in all countries without

What are Economic Resources?

2. Labor - physical and human effort exerted in production.

Two (2) economic definitions of capital:

4. Entrepreneurs -organizers and coordinators of other factors of production: land,

Figure 1. Factors of Production (Pinterest, n.d.).

3. For whom to Produce?

4. What provision should be made for economic growth?

Opportunity Cost and the Economic Problem

Government in the concept of opportunity cost

Traditional economies rely on agriculture, fishing, hunting, gathering, or a combination

This is a centralized decision-making system in which the government or a planning

Figure 3. Characteristics of Command economy, Economicshelp.org, n.d.

Figure 4. Features of an Open Market Economy (Learn.Robinhood, 2020)

Three of the following characteristics of a market economy are present in a mixed

Different forms Introducing a

Figure 5. Four Types of Economic Utility.

From an economic standpoint, it is critical to comprehend a product's or service's

Measuring the Economy

How to Calculate the Gross National Product?

The official formula for calculating GNP is as follows:

Alternatively, the Gross National Product can also be calculated as follows:

GDP = Consumption + Investment + Government Expenditure + Exports – Imports

Let’s check your understanding…

*Labor *Capital *Entrepreneurship * Land

*Physical+mental input *Land+Extracted Resources

*Fixed+Working capital *Organization of Factors

*Manager *Machinery *Farm+Crops *Workforce

*Wages *Rent *Interest *Profit

Factor Characteristics Examples Rewards

Task 5: Let’s reflect and realize…

Direction: In your notebook, complete the following statements.

1. I have learned that

2. I have realized that

3. I will apply what I have learned

Task 6: Let’s decide for the economy…

Direction: Do what is instructed below. Write your answers in your notebook.

❖ By yourself, draw a picture that represents a characteristic of the Philippine

I. Identify which resource is referred to by the following words

______________________ 1. Organizer and coordinator of land, labor, capital

______________________ 1. Prices are based on demand and supply

Toppr. Basic Problems of an Economy. n.d. Accessed on December 13, 2021.

LearnRobinhood.com What is a Free Market Economy? n.d., Accessed on December 13,

Economicshelp.com. Basic economic problem. n.d. Accessed on January 9, 2021.

Revisiting Economics as a social science. September 8, 2017, Retrieved from

Economics as an Applied Science, September 8, 2017, Retrieved from

2021 people’s Proposed Budget, nd. Retrieved from

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Labor Capital Entrepreneurship Land

Physical+mental input Land+Extracted Resources

Fixed+Working capital Organization of Factors

Manager Machinery Farm+Crops Workforce

Wages Rent Interest Profit