Urdaneta City Campus

Applied Economics

Economics
 Is a social science concerned with the product distribution, exchange and
consumption of goods and services.
 A social science that deals with the product and distribution of goods and
services to satisfy the needs and wants of man.
 A study on how people choose to use the different industries and resources

Economics and other Sciences

Economics as Social science

Economics is a social science because it is the center study of the people and
society

History and Economics

History recorded struggle of man from past to present.

Ethics and Economics

The morality of man is one of the most important element in progress of our
country. Ethics is the study of right and wrong human behaviour.

Political science and Economics

Study of government structure, functions, responsibilities and laws set as vital
because all of these affect and influences our lives in the economy as a whole.

Chemistry and Economics

The types of chemical used in agriculture as fertilizers and pesticides in
producing the goods are necessary consideration for setting the market price of
products.

Physics and Economics

Technology, invention, and innovation are the outcome of scientific studies.
Physics needed to increase and to speed up production to a higher level of activities.

Biology and Economics

Biology is the study of process and characteristics of plants and animals.
Mathematics and Economics
The study of economics is facilitated by use of numbers, statistics, mathematical
equations, formula, and graph which are learned in mathematics
Demand

 Refers to the number of goods and services that consumers are willing and able
to buy at alternative prices.

Demand schedule
 Is the table showing the units of quantity demand and price.

Point QD Price
A 10 70
B 20 60
C 30 50
D 40 40
E 50 30
F 60 20
G 70 10

Demand Curve
 Graphical representation of inverse relationship of price and quantity

10 20 30 40 50 60 70
 Factors that affect demand

1) Income
It is the buying power of the consumer, the higher income they have, the more
capable they are in purchasing more products or services.
2) Occasion
Whenever there are celebration, demand increases in the products which is used
for the certain occasion.

3) Preference
Customers own taste and preference affects the demand of every products.

4) Population
As population increases the number of potential consumer will increase, so the
demand for commodities will also increases.

5) Expectation
Resort to panic buying, when people expect of price hike and upcoming
calamities.

6) Price of related goods

When price of commodity increases, the demand for it will decrease.

Substitute goods
A type of good can be bought in replacement of other goods.

Complementary goods
When product has high demand its complement product will be affected.

Economic problem
Sometimes called the basic or central economic problem – asserts that an economy's
finite resources are insufficient to satisfy all human wants and needs. It assumes that
human wants are unlimited, but the means to satisfy human wants are scarce.

Three questions arise from this:

• What to produce?
'What goods or services and how much will you produce?' This question lies with
selecting the type of supply and the quantity of the supply, focusing on efficiency.
e.g. "What should I produce more; laptops or tablets?"

• How to produce?
'How do you produce this?' This question deals with the assets and procedures used
while making the product, also focusing on efficiency.
e.g. "Should I hire more workers, or do I invest in more machinery?"
• For whom to produce?

'To whom and how will you distribute the goods?' and 'For whom will you produce this
for?' arises from this question. This question deals with distributing goods that have
been produced, focusing on efficiency and equity.
e.g. "Should I expand my business in other country, and use currier in distributing my
products?"