SUBJECT: APPLIED ECONOMICS

SUBJECT TEACHER: MS. JANE M. CARANGUIAN

1.Gumamit ng tamang kasuotan.
2.Open cam hanggat maaari.
3.Iwasan ang mag ingay.
4. Mga tanong pagkatapos ng
discussion.
5.Mangyari lamang na magtanong
sa araw at oras ng nakatakdang
schedule.
6.Kung may nakalimutang tanong
sa araw ng schedule ay
maaaring gamitin ang ating GC,
iwasan ang mag PM.
Motivational quote:
Introduction to Applied Economics

Lesson 2 Economics as an Applied

Science

At the end of the session the learners will be able to:

a. Differentiate Economics as a Social Science and as an Applied Science
b. Give real-life situation in which the Principles of Applied Economics are used.
c. Cite current economic issues that needs to be addressed.
d. Relate the Principles of Applied Economics to current issues using critical
thinking.
ECONOMICS AS
AN APPLIED
SCIENCE LESSON 2
ECONOMICS IS A STUDY OF ECONOMIC ACTIVITIES
OF A MAN. IT IS ONLY CONCERNED WITH THE
WEALTH-GETTING AND WEALTH-USING ACTIVITIES
OF A MAN.

- PROF. MARSHALL
APPLIED
ECONOMICS
• The term “applied economics” is believed to have started 200 years
ago in the writings of two economists:
JEAN-BAPTISTE SAY JOHN STUART MILL
(1767-1832) (1806-1873)
APPLIED
ECONOMICS
• Applied economics - is the study of economics in relation to real
world situations. It is the application of economic principles and
theories to real situations, and trying to predict what the
outcomes might be.

SIMPLER DEFINITION
• Applied economics – is the study of observing how theories work in
practice.
 WHAT IS THE IMPORTANCE OF APPLIED
ECONOMIC APPLICATION?

1. Applying economics to a company, household or a country

helps sweep aside all attempts to dress up a situation so
that it will appear worse or better than it actually is.
*applied economics becomes a powerful tool to reveal
the true and complete situation in order to
come
up with things to do
 EXAMPL
E
Applied economics can assess the profits of a
certain company
The result can help the executives to do some
strategies in order to boost its sales
 WHAT IS THE IMPORTANCE OF APPLIED
ECONOMIC APPLICATION?

II. Applied economics acts as a mechanism to

determine what steps can reasonably be taken to
improve current economic situation
*to examine each aspect, one can strengthen
areas where performance is weak
EXAMPL
E
• Purchase of goods and services
• Usage of raw materials
• Division of labor within entity (e.g. firm, company,
agency)
 WHAT IS THE IMPORTANCE OF APPLIED
ECONOMIC APPLICATION?

III. Applied economics can teach valuable lessons on

how to avoid the recurrence of a negative situation, or
at least minimize the impact.
*to review what steps were taken to improve and
correct similar situations and continue good strategies
to keep the economy flowing in a correct direction
ECONOMETRICS
WHAT IS
ECONOMETRICS?
• Econometrics – is the application of statistical and
mathematical theories to economics for the purpose
of:
• Testing hypotheses
• Forecasting future trends

The results of econometric are compared and

contrasted against real life examples.
Theoretical

Econometric
s

Applied
ECONOMETRICS
EXAMPLE Income Spendin
g

Real life application of econometrics would be to study

the hypothesis that as a person’s income increases,
spending increases
 Pover
t y

Unemploy
Inflation Scarcity ment

Slow
Growth
SCARCIT
Y
• Scarcity- refers to the tension between our
limited resources and our unlimited wants and
needs

Video
IF YOU ARE THE ECONOMIC PLANNER, HOW
YOU RESOLVE UNEMPLOYMENT?
CAN

• List down your option/s. Discuss.

• ½ crosswise. Due on Friday, July 7
2017
THANK YOU
AND
GOD BLESS