Applied Economics

Introduction to Applied
Economics

QUARTER 1
Week 1 – Module 1

Most Essential Learning Competency:

Differentiate economics as social science
and applied science in terms of nature and
scope.

PANGAPISAN INTEGRATED SCHOOL

Lesson 1: Revisiting Economics as Social Science

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. 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.

Common words in the definition…

Scarcity : is a situation wherein the amount of something available is insufficient to satisfy

the desire for it.

Resources : labor, capital, land, and entrepreneurship that are used to produce goods and
services also known as factors of production.

Production : the process of combining inputs in order to make something for consumption. It
is the act of creating output.

Output : a good or service which has value and contributes to the utility of individuals.

Distribution : the allocation of the total product among members of society.

Consumption : the use of a good or service by household.

Why study economics?

I. To learn a way of thinking

Economics has three fundamental concepts:

 Opportunity cost: the best alternative that people forego, or give up, when making a
choice or decision.
 Marginalism: the process of analysing the additional costs or benefit arising from a
choice or decision.
 Efficient Markets: a market in which profit opportunities are eliminated almost
instantaneously.

II. To understand society

III. To understand global affairs and be an informed citizen

Scope of Economics

 Microeconomics

It deals with the functioning of individual industries and the behaviour of individual
economic decision-making units such as firms and household.

 Macroeconomics

It looks at the economy as a whole and examines the factors that determine national output or
product.

Methods of Economics

 Positive Economics : focuses on causes and effects, behavioural relationships, and

facts involved in the evolution and development of economic theories. Often called
“what is” economics

1. Descriptive economics : the compilation of data that describe phenomena and facts
2. Economic theory : set of related statements about cause and effect.

 Normative Economics: expresses value or judgments about economic fairness or what

the outcome of the economy ought to be.

Model A formal statement of a theory, usually a mathematical statement between two or

more variables.

Variable A measure that can change from time to time or from observation to observation.

Ockham’s razor The principle that irrelevant detail should be cut away.

All Else Equal : Ceteris Paribus

A device used to analyse the relationship between two variables while the value of other
variables are held unchanged.

Graph: a two-dimensional drawing showing a relationship usually between two set of

numbers by means of a line or a curve.

Demand: the quantity demanded is the amount of a product or service people are willing to
buy at a certain price; the relationship between price and quantity demanded is known as
demand.

Supply: represents how much the market can offer

As Social Science
As a society with over 100 million population, the Philippines, like any other country, has
been encountering different economic problems; the problem on how to make use of the
limited and scarce resources available.

Expectations
1. Learners are expected to identify and give example on the basic terms in applied
economics;
2. Evaluate economics as social science and as applied science and identify economic
resources; and
3. Demonstrate and identify similarities and differences of economics as social and applied
sciences.

Brief Introduction
These Activity sheets aim to provide the learners quality text-based learning resources
aligned with K to 12 curricula as a supplement to the teaching and learning process in this
time of pandemic. It aims to improve the learning of every Filipino in a time where all
learning resources are scarce.
Economics Activity sheets deal with the concepts, underlying principles, processes of
having a good economy. The preliminaries of this course include the following:
Economics as applied science and its utility in addressing the economic problems of
the country, the law of supply and demand, and factors affecting economic situation.
Name: Date:

Grade/Section: Score:

(Line spacing from Grade to the Title is double)

Title of the Activity: Unlock the Terms!

Most Essential Learning Competency: Differentiate economics as social science

and applied science in terms of nature and scope.

K to 12 BEC CG: ABM_AE12-Ia-d-1 / ABM_AE12-Ia-d-2

Economics is defined as the study of choices that individuals and societies make in the
production, distribution and consumption of goods; It deals with the efficient
allocation of scare resources in order to satisfy a person’s insatiable wants.

Directions: Answer the following sets of questions in the activity sheets.

I. Definition of terms: Match the word in column A with the definition in column B. Write
the letter of the correct answer in the given space.
Column A Column B
1. Production a. the act of using something (food / goods)
2. Consumption b. limited
3. Scare c. effective apportion/ distribution
4. Efficient allocation d. Something produced by physical or
intellectual effort

II. Based on the definition given, choose from the given choices, the primary reason why
there is a need to study and understand economics. Encircle your choice.
a. Economics will help people to allocate limited resources.
b. Economics will help people learn to use resources.
c. Economics will help people understand issues and concerns on man’s survival as
a human being, that is by satisfying his basic needs and unlimited demands, using
the limited economic resources.

Economics is defined as the study of choices that individuals and societies make in the
production, distribution and consumptions of goods; It deals with the efficient allocation
of scare resources in order to satisfy a person’s insatiable wants.

III. Based on your choice above (activity letter b), explain further why there is a need to study
and understand economics. (you may give your example).

IV. Explain the following basic terms using the meaning below.
1. Economics as Social Science that studies how individuals make choices in allocating
scarce resources to satisfy their unlimited wants. And the study of society and how
people behave and influence the world around them.
Answer:
2. Macroeconomics is concerned with the overall performance of the entire economy.
It includes the economic system as a whole rather than the individual economic unit
that makes up the economy.
3Answer:

3. Microeconomics is concerned with the behavior of individual entities such as the

consumer, the producer, and the resource owner. It is more concerned about how
goods flow from the business firm to the consumer and how resources move from the
resource owner to the business firm.
Answer:
Name: Date:

Grade/Section: Score:

Title of the Activity: MIC, MAC, Match!

Most Essential Learning Competency: Differentiate economics as social science

and applied science in terms of nature and scope.

K to 12 BEC CG: ABM_AE12-Ia-d-1 / ABM_AE12-Ia-d-2

Directions: Analyze and interpret the following statements using the space
provided in the activity.

1. Economics as a course is referred to as “Social Science”. Is the term used, Social

Science, valid based on the discussion? Justify your answer.

2. Differentiate macroeconomics from microeconomics by citing instances in the various

activities that you have encountered at home or school.

3. Enumerate economic resources in the country considered as a scare, and suggest

measures to resolve the problem of scarcity.

4. Explain why Applied Economics is not a field of economics? What is Applied

Economics?
Name: Date:
Grade/Section: Score:

Title of the Activity: Match, Match, Match!

Most Essential Learning Competency: Differentiate economics as social science

and applied science in terms of nature and scope.

K to 12 BEC CG: ABM_AE12-Ia-d-1 / ABM_AE12-Ia-d-2

Economic Resources
Land- It refers to all natural resources which are given by, and found in nature, and are
therefore, not man made. Owners of lands receive a payment known as rent.
Labor- Any form of human effort exerted in the production of goods and services. It
covers manual workers like construction workers, machine operators, and production
workers, as well as professionals like nurses, lawyers and doctors. The income received by
labors is referred to as wage.
Capital- Man made goods used in the production of other goods and services. It
includes building, machineries, and other physical facilities use in production. The owner
of capital earns an income called interest.

Directions: Identity what economic resource is referred to by the following

words. Use the space provided.

1. Entertainers
2. Minerals
3. Forests
4. Marine resources
5. Teachers
6. Technology
7. Production equipment
8. Engineers
9. Call center agents
10. Business Proprietor
Name: Date:

Grade/Section: Score:

Title of the Activity:

Most Essential Learning Competency: Differentiate economics as social science

and applied science in terms of nature and scope.

K to 12 BEC CG: Read the instructions carefully and write the correct answer.

Directions: Multiple Choice. Write your answer in the space provided.

_1. An approach to the big economic issues that pertain to national global communities.
A. economics B. microeconomics C. macroeconomics D. government
2. A science that deals with the proper utilization of economics resources for man’s
satisfaction.
A. industry B. economics C. government D. capital
3. This economic factor is the finished goods used to produce other goods.
A. labor B. capital C. land D. trade
4. They are experts in the management and the allocation of economic resources to
maximize production.
A. labor B. entrepreneur C. capital D. trade
5. This economic activity is referred to as the process of allocating the different fruits of
production to the different factory owners.
A. production B. exchange C. distribution D. procedure
6. The economic activity is known as the delivery of the finished goods from the to the
consumers using money as their medium of exchange.
A. distribution B. exchange C. production D. trade
7. It is a social science that studies and seeks to allocate scarce human and non-human
resources among alternatives to satisfy unlimited human wants and desires.
A. Economics B. Politic C. Geography D. Ethics/Religion11
8. This type of economics deals with the management of income, expenditures, Wealth
or resources of a nation.
A. Household economics C. National Economics
B. Business economics D. International economics
9. The production and distribution of wealth are influenced to a great extent by the
government. We have economic planning in our country. The statement above shows
a relationship between economics and other fields of science?
A. Mathematics B. Politics C. Ethics/Religion D. History
10. The following are factors of production; EXCEPT:
A. Capital B. Labor C. Land D. Services
11. looks at the individual unit-the household, the firm, and the industry.
A. Macroeconomics C. Descriptive Economics
B. Econometrics D. Microeconomics
12. Why study economics?
A. Because it is a required course in schools.
B. Because it is an essential part of the study of society.
C. Because it needed by the businesses.
D. Because other countries are studying it.
13. The government is predicting the future levels of inflation and employment rate is
under what scope of economics?
A. Macroeconomics C. Positive economics
B. Negative economics D. Microeconomics
14. Which is an example of Microeconomics?
A. Mike wants to know the employment rate in the country.
B. Mike is concerned about the changes in the price of milk.
C. Mike is interested in knowing the inflation this year.
D. Mike is interested in knowing the trade per business.
15. Private airlines in the Philippines use airplanes to produce transportation services.
Airplanes in this situation are an example of what resource?
A. Land B. Labor C. Capital D. Natural Resources
16. It is the problem with how to make use of the limited and scarce resources available.
 A. Economic problem B. Scarcity C. Resources D. Marginalism 12
17. The concept of and are considered fundamental in
the study of economics.
A. Human skills and knowledge C. Choice and scarcity
B. Capital and land D. Human skills and capital
18. A is usually involved when a choice is made.
A. Trade-off B. Economic problem C. Scarcity D. Human skills
19. These are provided by nature or by previous generations that are used to satisfy
human wants.
A. Scarcity B. Economic problem C. Human skills D. Resources
20. It is considered as the most important resource of society.
A. Labor B. Capital C. Land D. Resources
21. Which category of resources does an hour of teaching belong to?
A. Labor B. Capital C. Land D. Resources
22. Who combines natural resources, labor, and capital to make a profit?
A. Middlemen B. Owners C. Entrepreneurs D. Factories
23. Since human wants are unlimited and available resources are limited, what will a
rational consumer do?
A. Satisfy the most urgent needs that can be met within his/her income levels.
B. Be resigned to unhappiness.
C. Renounce all wants and lead the life of a hermit.
D. Be jealous of the neighbors.
24. Which of the following refer to macroeconomics
A. Effects of government regulation on individual markets.
B. It concerns itself with the actions of whole countries.
C. It concerns itself with the action of individuals.
D. Firm production and profit maximization.
25. This is related to economics because it points out the right and wrong conduct in
such matters as wealth, production, consumption, exchange, wage, profit, strike,
labor and private property.
A. Mathematics B. Politics C. Ethics/Religion D. History