APPLIED ECONOMICS

Quarter 1 Module 1
LEARNING OBJECTIVES
Opportunity Cost : SALARY
 Positive
and Normative
Economics
 MicroEconomics
and MacroEconomics
 FACTORS OF
PRODUCTION
Factors Of Production

LAND – Includes all the natural

resources such as fertile soil, trees,
minerals, and water which can be
sources of raw materials to produce
goods or products
 Factors Of Production
CAPITAL – refers to anything that
people produce and later used in the
production of other goods and services
such as manufactured aids, tools,
machine, equipment and factories.
Factors Of Production

LABOR – refers to the

physical and mental talents
used to produce
goods/services.
 Factors Of Production
Entrepreneuship – is the ability to organize
the other resources (land, labor, capital) to
produce goods and services.

- Ability to established and operate a business and

established relationship with suppliers, customers,
lenders, investors and others.
 RETURNS of
FACTORS of
PRODUCTION
ECONOMICS
As
Applied Science
and
Social Science
What is economics as a applied science?

Applied economics is the use of the insights gained

from economic theory and research to make better
decisions and solve real-world problems. Applied
economics is a popular tool in business planning
and for public policy analysis and evaluation.
If economics is the science of studying how people
use various, limited means available to them to
achieve given ends, then applied economics is the
tool to help choose the best means to reach those
ends. As a result, applied economics can lead to "to
do" lists for steps that can be taken to increase the
probability of positive outcomes in real-world
events.
What is economics a social science?

Economics is a social science that focuses on the

production, distribution, and consumption of goods
and services, and analyzes the choices that
individuals, businesses, governments, and nations
make to allocate resources.
 Basic Terms to
Understand Economics
It is essential that you familiarize yourself with the study
of economics. This will facilitate your understanding of
economic analysis. Specifically you meet GOODS –
which yields to your satisfaction. It is anything used to
satisfy your wants and needs.
Goods may classified as :