Applied

Economics
 Lord, we praise and glorify Your
Holy name. Forgive us from our sins
that separate us from your love. Thank
You for the gift of life, family, health
and security. Please guide us as we start
this new subject. Grant us the
enthusiasm to learn and acquire
knowledge throughout this semester.
Bless our families and our homes. All
this we pray in the name of Jesus Christ
our Savior. Amen.
Learning Objectives:
 distinguish economics as a social science and an
applied science
 examine the utility and application of applied
economics to solve economic issues and problems
 draw your imagination of a sustainable
environment 30 years from now
 What is
ECONOMICS?
Definition of
Economics
 Definition of Economics
Greek terms “oikonomia” or “oikonomos”
oikos (house) + nomos (managing) =
household management
careful or thrifty use or management of
resources
management of resources of a country,
community or business
Economics according to Experts

Adam Smith: It is an inquiry into the nature

and causes of the wealth of nations.
Alfred Marshall: It is a social science that
deals with the study of man in the ordinary
business of life.
Economics according to Experts

Paul Samuelson: It is 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.
Economics according to Experts

Roger Le Roy Miller: It 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.
Economics according to Experts

Hall and Loeberman: It is the study of

choice under the condition of scarcity.
Economics as a
Social Science
deals with the efficient allocation of scarce
resources to satisfy man’s unlimited wants
and needs
tries to understand and study how a society
behaves and how its members organizes
themselves to meet their needs and desires
using limited resources
Scarcity (limited availability)
how individuals make choices in allocating
scare resources to satisfy their unlimited
wants
deals with the analysis on how a society acts
on the creation and utilization of wealth
Economics as an
Applied Science
the study of economics in relation to real-
world situations
application of economic principles and
theories to actual economic problems
uses theories to come up with answers when
analyzing certain situations
deals with numbers and mathematical
principles on which possible outcomes being
reviewed are based and supported
Basic Economic Issues and
Problems Confronting the
Development of the
Philippines in the 21st
Century
 Poverty and Unemployment
Relative poverty is when people have
income significantly less than the
average income for society.
Absolute poverty is when people have
insufficient income to afford the
necessities of life, such as food, rent
and clothing.
 Poverty and Unemployment
Education and training
Foreign aid
Diversification of economy
 Demographic Changes
Is population growth good or bad for
the economy?
Labor force
Young population
Poverty and unequal distribution of
income
Education
 Low Investment in HRD
large labor force ≠ competent and
skilled workers
Education
Investments in higher education,
science and technology, and research
and development
 Weak Infrastructure
one of the main economic problems
roads and bridges not accessible and
passable
farm-to-market roads not given much
attention.
“Build, Build, Build”
 Slow Adaptation of Modern
Technology
Technology is the manner of
processing raw materials or
intermediate inputs into transformed
outputs through the use of factor
outputs.
 Slow Adaptation of Modern
Technology
Labor-intensive technology is a
technology based in the use of labor
(human resources).
Capital-intensive technology refers to
use of more capital relative to labor in
the production process.
 Env’tal Sustainability and the
Country’s Dev’t Thrust
Environment
excessive use of natural resources
compromise the environment’s ability
to provide income and other benefits in
the future
 Env’tal Sustainability and the
Country’s Dev’t Thrust
Sustainable development
Applied economics is used to answer
the main economic problem – scarcity
of natural resources.
Differentiate economics as a social
science and as an applied science in
terms of nature and scope using the
following Venn Diagram. Give at least 5
differences and 5 similarities. (15 points)
For this activity, think of three social
problems in your locality and explain
how applied economics can help resolve
these problems. (5 points each)
We have discussed that the environment is one of the scarce
resources. Economics can be used to allocate this particular resource.
Sustainable development is needed. I want you to imagine the
environment 30 years from now, wherein the natural resources of the
future are not compromised.
Take a picture of your work and upload it in a folder in Schoology. Be
guided by the criteria for evaluation:
Concept 10 points
Relevance to the Topic 10 points
Creativity 5 points
Visual Appeal 5 points
TOTAL 30 points
Mary Mother of the Good Shepherd
Pray for us.

Jesus, You are my Lord

My happiness lies in You alone.