ABM

Quarter 1 – Module 1:
Differentiating Economics as Social
Science and Applied Science
ABM – Grade 12
Alternative Delivery Mode
Quarter 1 – Module 1: Differentiating Economics as Social Science and Applied
Science in Terms of Nature and Scope
First Edition, 2020

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Published by the Department of Education

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Undersecretary: Diosdado M. San Antonio

Development Team of the Module

Author:Johnny B. Estrada
Editor:Susan B. Pastera
Reviewers:AntoniettaD. Duca
Illustrator: Mark D. Petran
Layout Artist:Mara Jamaica B. Floreno
Management Team: Ma. Gemma M. Ledesma, CESO V
Elena P. Gonzaga
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Lorlenie M. Ortillo, CESO VI
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Susan B. Pastera
Analie J. Lobaton

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 ABM
Quarter 1 – Module 1:
Differentiating Economics as Social
Science and Applied Science in
Terms of Nature and Scope

GOVE
NO
Introductory Message
For the facilitator:

Welcome to the Applied Economics, ABM Grade 12 Alternative Delivery Mode (ADM)
Module on differentiating economics as social science and applied science in terms
of nature and scope!

This module was collaboratively designed, developed and reviewed by educators

both from public and private institutions to assist you, the teacher or facilitator in
helping the learners meet the standards set by the K to 12 Curriculum while
overcoming their personal, social, and economic constraints in schooling.

This learning resource hopes to engage the learners into guided and independent
learning activities at their own pace and time. Furthermore, this also aims to help
learners acquire the needed 21st century skills while taking into consideration
their needs and circumstances.

In addition to the material in the main text, you will also see this box in the body of
the module:

Notes to the Teacher

This contains helpful tips or strategies
that will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to
manage their own learning. Furthermore, you are expected to encourage and assist
the learners as they do the tasks included in the module.

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For the learner:

Welcome to the Applied Economics, Grade 12 Alternative Delivery Mode (ADM)

Module on differentiating economics as social science and applied science in terms
of nature and scope!

The hand is one of the most symbolized parts of the human body. It is often used to
depict skill, action and purpose. Through our hands we may learn, create and
accomplish. Hence, the hand in this learning resource signifies that you as a
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This module was designed to provide you with fun and meaningful opportunities
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This module has the following parts and corresponding icons:

What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in
the module.

What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.

What’s In This is a brief drill or review to help you link

the current lesson with the previous one.

What’s New In this portion, the new lesson will be

introduced to you in various ways such as a
story, a song, a poem, a problem opener, an
activity or a situation.

What is It This section provides a brief discussion of

the lesson. This aims to help you discover
and understand new concepts and skills.

What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer

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 Key at the end of the module.

What I Have Learned This includes questions or blank

sentence/paragraph to be filled into process
what you learned from the lesson.

What I Can Do This section provides an activity which will

help you transfer your new knowledge or
skill into real life situations or concerns.

Assessment This is a task which aims to evaluate your

level of mastery in achieving the learning
competency.

Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of
the lesson learned. This also tends retention
of learned concepts.

Answer Key This contains answers to all activities in the

module.

At the end of this module you will also find:

References This is a list of all sources used in

developing this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of
the module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your
answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are
not alone.

We hope that through this material, you will experience meaningful learning
and gain deep understanding of the relevant competencies. You can do it!

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 What I Need to Know

This module was designed and written with you in mind. It is here to help you
master the competencies on how to differentiate economics as social science and
applied science in terms of nature and scope. The scope of this module permits it to
be used in many different learning situations. The language used recognizes the
diverse vocabulary level of students. The lessons are arranged to follow the
standard sequence of the course. But the order in which you read them can be
changed to correspond with the textbook you are now using.

The module is divided into four lessons, namely:

 Lesson 1. Differentiating economics as a social science in terms of
nature.
 Lesson 2. Differentiating economics as a social science in terms of
scope.
 Lesson 3. Differentiating economics as an applied economics in terms of
nature.
 Lesson 4. Differentiating economics as an applied economics in terms of
scope.

After going through this module, you are expected to:

1. differentiate economics as a social science in terms of nature;
2. differentiate economics as a social science in terms of scope;
3. differentiate economics as an applied science in terms of nature; and
4. differentiate economics as an applied science in terms of scope.

1
 What I Know

Study the following sentences. Write in the blank space if they are true or false.

1.______Economics deals with humanity.

2.______Chemistry is part of economics.
3.______Economics is related to History.
4.______Religion influences economic decision.
5.______Government and laws interact w/ economic forces.
6.______Economics deals with the problems of scarcity.
7.______Pandemic such as Covid 19 doesn’t affect economics.
8.______Biology and Economics is a social science.
9.______Economics studies how individuals make choices in allocating scarce
resources to satisfy unlimited wants..
10.______Economics tells us about the activities or forces which influence our
daily life in our household, community and nation.

Lesson Differentiating Economics

as a Social Science in terms
1 of Nature

You have learned about economic values and activities in the past lesson. Now, you
will learn how to differentiate economics as social science in terms of nature.

What’s In

Choose the letter which corresponds to the correct answer. Write your answer
before the number.

_____1. Who is the father of modern economics?

a. Adam Smith c. Robert Frank
b. Peter Drucker d. Simon Schumpeter

2
_____2. It is the scientific study of human society and social relationships.
a. Biological science c. Physical science
b. Earth science d. Social science

_____3. According to Aristotle, Economics comes from the Greek word Oikonomia.
What does Oikonomia means?
a. employee management c. political management
b. household management d. public management

_____4. Why do people have to practice economics?

a. because of astronomical phenomena c. because of physical sciences
b. because of scarcity of resources d. because of viruses/bacteria

_____5. Which of the following statements is TRUE?

a. A knowledge of economics is needed to face problems.
b. Economics didn’t use mathematical principles.
c. Economics is a physical science.
d. Sociology, biology, and psychology are similar to economics.

What’s New

Social Science

sociology

psycholog politics
y y
economics
y
human law
y other relatedsociology
y
discipline
y

Figure 1

Question:

What is your understanding about the illustration above?

3
Rubrics:

BASIS DESCRIPTION POINTS

The explanation given was precise and
Clear And Precise 10
clear
There are information that are
There Are Some
unanswered and/or the connection
Information That 7
between the topic and its relation or the
Left Unanswered
topic is not that clear
Tried to explain what he/she answered
however it is not clear what is the
Point For Effort 4
connection between the given topic and
its relation to each other
No Points No explanation given 0

What is It

Revisiting Economics as a Social Science

Economics is a science because it uses scientific method of inquiry. It organized

body of truth, coordinated, arranged and systematized with reference to certain
general laws and principles.(Observation, Formulation of theories, Gathering of
data, Experimentation, Conclusion, Generalization)Economic analysis seeks to
explain economic events using some kind of logic based on a set of systematic
relations.Economics is generally classified as a social science and uses the
scientific method on the basis for its investigation.

It is a social science because it uses the scientific method to study how society
creates its material wealth, how it makes this wealth available to its people with
minimum difficulties and expands its wealth. The subject matter of economics is
people or societies and their behavior, unpredictable in nature. It is different from
physical science since, economics deals with human being and physical sciences
which concerned with the study of inanimate natural objects. Economics is related
to other subjects of knowledge. It overlaps history, mathematics, sociology,
psychology, politics, religion, and many more. This is evident to all areas
particularly under social science. Social science is the study of society and how
people behave and influence the world around them. As a social science, economics
is a very interesting in nature because it studies how groups of individual make
decisions in allocating scarce resources to maximize utility. The term economics is
derived from two words economy and science meaning the science of economy or
the science of proper utilization of resources.

Reasons of Studying Economics

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The study of economics tells us about the activities or forces which influence our
daily life in our household, community and nation. Knowledge of economics is
needed to face the problem like the COVID 19 pandemic and teach as to prepare for
the future not only for this pandemic but all the problems concerning agricultural,
commercial and other modern life. Likewise, knowing economics will make us
better citizens who can make decision wisely about economic activities, we will
learn more about how to be a good worker, a good student, a good producer of
goods, and a good investor. We will learn how to value of saving money and spend
wisely.

Person Behind the Definition of Economics

Notable person like Adam Smith, the father of economics, defined economics as the
science of wealth. According to him, economics makes inquiries into the factors
that determine the wealth and the growth of the nation. A well-known economist
Alfred Marshall described economics as a study of mankind in the ordinary
business of life. It examines the part of individual and social action that is most
closely connected with the attainment and use of material requisites of well-being.
According to Aristotle, economics comes from the Greek word “Oikonomia” means
“household management” in which we need to practice and be wise in how to use
money to run a household as well as the whole nation if go further. Below are some
economists who defined economics.

• Paul Samuelson (Economics):“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.”
• Roger Le Roy Miller (Economics, Today and Tomorrow):“Economics
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.”
• Hall and Loeberman (Macroeconomics: Principles and
Applications):“The study of choice under the condition of scarcity”
• Bernardo Villegas (Guide to Economics for Filipinos):“A social science
that studies and seeks to allocate scarce human and non-human
resources among alternatives in order to satisfy unlimited human
wants and desires.”
• Gerardo Sicat (Economics):“A scientific study which deals with how
individuals and society make choices,”

Economics as Human Science

Economics is a human science. It is human science because it involves people.

Human needs and wants may be related to foods, shelter, etc. It involves choices
and decision-making on how to maximize the use of scarce resource to satisfy the
wants of the people. Today, we are suffering pandemic, insufficiency of resources is

5
a big issue particularly here in region 6. This is what we call scarcity, a condition
where there are insufficient resources to satisfy all the needs and wants of a
population. These resources- labor, capital, land and natural resources and
entrepreneurship are used to produce goods and services. There are factors of
production that may affect the choices and decision of individuals. In order to face
these scarce resources our ability is needed to decide the best foregone alternative
as an individual, business, and even a society to solve this problem, this concept
called as Opportunity Cost. Therefore, people have to practice economics.

What’s More

Economics is driven by theories. These are classical economics, neo-classical

economics, new classical economics, modern form classical economics, and
institutional economics.

Task:

Identify and label the statement for the following Economic Theories. Write the
letter of your answer in a given underlined before the statement.

_____1. Alfred Marshall defined economics as the study of mankind in the ordinary
business life. This attributed with integrating the original classical cost of
production theory with utility in a bid to explain commodity and factor prices and
the allocation of resources using marginal analysis.

_____2.Adam Smith and other Classical economists believed economics as the

science that deals only material wealth.

_____3.Believes the market is highly competitive and prices adjust to changes in

aggregate demand.

_____4.Focuses how institutions evolve and change and how these changes affect
economic systems, economic performance, or outcomes.

_____5.Believes in laissez-faire and in the flexibility of wages and prices.

Choices:

a. Classical View of Economics

b. Neo-Classical View of Economics
c. New Classical View of Economics
d. Modern Form of Classical View of economics
e. Institutional Economics View

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 What I Have Learned

Economics is an art as well as a science. It is different science from biology,

chemistry and physics. Economics is a social science it studies human society and
social relationships. Social science as a field of study is separate from the natural
sciences, which deals such as physics, biology, and chemistry. A social science
examines the relationships between individuals and societies, as well as the
development and operation of societies, rather than studying the physical world.

What I Can Do

Questions:

a. As an individual, what do you think is the essence of studying

economics?
b. How do you apply economics in your household?

Rubrics:

BASIS DESCRIPTION POINTS

Clear And The explanation given was precise and
10
Precise clear
There Are Some
There are information that are
Information That 7
unanswered
Left Unanswered
Tried to explain what he/she answered
Point For Effort 4
however it is not clear
No Points No explanation given 0

Assessment

Below are tasks on lesson 1 of the module:

Task:

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Get hold of any kind of printed media material available. Cut the picture that
describes the economics as social science. In the same manner, cut the picture
describes physical sciences. Put and paste the selected pictures in a given
worksheet. Write a short explanation differentiating the two.

Rubrics:

BASIS DESCRIPTION POINTS

Clear And The explanation given was precise and
10
Precise clear
There Are Some
There are information that are
Information That 7
unanswered
Left Unanswered
Tried to explain what he/she answered
Point For Effort 4
however it is not clear
No Points No explanation given 0

Additional Activities

Task:
Match the items in Column 1 to items in Column 2. Answer in letters
corresponding to the correct answer.

Column 1 Column 2

______1. Economics a. Smith and Marshall

______2. History & Religion
______3. Economists
______4. Biology
______5. Social Science
______6. Deals on wealth
______7. Scarcity
______8. Alternative way
______9.Use of scarce resources
_____10. Knowledge of economics
b. Sociology and Economics
c. Human science
d. Insufficient resources
e. Opportunity Cost
f. Classical Economics
g. Choices & Decision-making
h. Learn to save money.
i. Subjects related to economics
j. Physical science

Answer Key

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What I Know What’s In What’s More

1. True 6. True 1. a 1.b

2. False 7. False 2. d 2. a

3. True 8. False 3. b 3. d

4. True 9. True 4. b 4. e

5. True 10. True 5. a 5. c

What I Can Do Assessment Additional Activities

1. c 6. f

2. i 7. d

3. a 8. e

4. j 9. g

5. b 10. H

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 What I Know

Choose the letter which corresponds to the correct answer. Write your answer
before the number.

_____1. “First place to man, second place to wealth.” This statement refers to;
a. Growth economics c. Welfare economics
b. Scarcity economics d. Wealth economics
_____2. Which of the following scenario describe Normative Economics?
a. Inflation rate at this moment c. Pandemic Covid 19
b. Level of GNP 2nd quarter of 2020 d. Policy formulation to cope pandemic
_____3. A division of economics that is concerned with the behaviour of individual
entities.
a. Producer c. Microeconomics
b. Macroeconomics d. Consumer
_____4. Which of the following statements is Not True?
a. Economics is an art.
b. Economics is a science.
c. Economics is both a positive and normative science.
d. Positive economics focuses on policy formulation.
_____5. What are the two branches of economics?
a. Consumer & Producer
b. Microeconomics & Macroeconomics
c. Normative & Positive science
d. Sociology & Psychology
______6. Why do we need to know the overall performance of the entire economy?
a. To answer the consumer’s basic question and decides on the natureof
goods that will be produced and the quantity of these goods.
b. To take a look on how the economy operates and decide and properly
allocate the use of whatever resources are available.
c. To shape up the economy and formulate policies for the good of the
nation as an individual.
d. To observe facts in connection with the activity that we want to
investigate.
______7. How economics do affects business firm?
a. by understanding theories and law of economics
b. by applying theories and law of economics
c. through constraints and limitations of resources
d. through maximize unlimited wants
______8. The word macro is derived from the Greek word macros means;
a. large c. small
b. medium d. tiny
______9. The word micro is derived from the Greek word micros means;
a. large c. small

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 b. medium d. tiny
______10. Which of the following statements is True?
a. All individuals are not economists.
b. All societies are faced with basic economic problems.
c. All producers are belonging to macroeconomics.
d. The growth of national income is under microeconomics.

Lesson
Differentiating Economics as a Social

2 Science in terms of Scope

You have learned about economics as a social science in terms of nature in the
past lesson. Now, you will learn how to differentiate economics as social science in
terms of scope.

What’s In

Task:

Fill in the blanks with the correct answer.

1. Economics is concerned with the wise use of ___________resources.

2. Because of the presence of _________, there is a need for man to make
decisions in choosing how to maximize the use of scarce resources.
3. Economics, as a study, is the _____________that involves the use of scarce
resources to satisfy unlimited wants.
4. People have to practice __________ to cope up problems.
5. Economics is also defined as the science of __________.

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 What’s New

Economics
as a
Social
Science

Economics as / Economics as / Economics as / Economics as

Wealth Welfare Scarcity Growth

Figure 2

Question:

What is your understanding about the illustration above?

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________

Rubrics:

BASIS DESCRIPTION POINTS

The explanation given was precise and
Clear And Precise 10
clear
There Are Some
There are information that are
Information That 7
unanswered
Left Unanswered
Tried to explain what he/she answered
Point For Effort 4
however it is not clear
No Points No explanation given 0

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 What is It

The Scope of Economics

The scope of economics includes the definition itself, it points out as an art or a
science; and positive and normative science. Economics is an art because different
theories and laws are explained with the help of numerical and statistical data like
graphs, figures, tables, and equation. Economics is a science because it is
systematized body of knowledge in which economic facts are studied and analyzed.
Economics just like science have laws and theories which are traced out a casual
relationship between two or more phenomena.

There are four definition of economics; economics as wealth, welfare, scarcity and
growth.

• Father of Economics Adam Smith in his book “ Wealth of Nations 1776”

defined economics is the study of wealth.J.B Say, J.S Mill, Walker, B.Price
all agreed that Economics is concerned with wealth.In this definition wealth
is given first place, man has given second place.
• Alfred Marshall in his book “Principles of Economic Science-1890” defined
Economics is the study of man kind in the ordinary business of
life.Economics is one side a study of wealth; and on the other side more
important side a part of study of man. He made economics as a science of
human welfare.Mainly concerned with the study of man in relation to
wealth.
First place to man, second place to wealth.It studies man not in isolation but
as a member of a social group.Definition considered only material welfare,
ignored immaterial welfare.

• Lionel Robbins in his book ‘Nature and Significance of Economic Science-

1932 given scarcity definition.Economic is the science which studies human
behavior as a relationship between ends and scarce means which have
alternative uses.” He points out the scarce resources and unlimited wants.

• Robbins included material and non material goods, widens the scope of
economics. Means have alternative uses.He made economics a positive
science.

Economics as Positive and Normative Science

Economics is both a positive and normative science because positive economics
deals with statements of “fact” that can either be refuted or supported while
normative economics deals with value judgements, often in the context of policy
recommendation. Positive economics deals with what is- things that are actually
happening such current inflation rate, the number of employed labor, and the level
of the Gross National Product. Normative economics, on the other hand, refers to
what should be-that embodies the ideal such as the ideal rate of population growth

13
or the most effective system. Positive economics is an overview of what is
happening in the economy that is possibly far from what is deal. Normative
economics focuses on policy formulation that will help to attain the ideal situation.

Branches of Economics

There are two branches of economics- microeconomics and macroeconomics.

Microeconomics is a branch of economics that is concerned with the behaviour of
individual entities such as the consumer, the producer, the resource owner, prices
and outputs. The word micro is derived from the Greek word micros meaning
small. It is more concerned on how goods flow from the business firm to the
consumer and how resources move from the resource owner. Microeconomics
studies the decision and choices of the individual units and how these decisions
affect the prices of goods in the market. Macroeconomics is a branch of economics
that focuses the impact of choices on the total or aggregate level of economic
activities. The word macro is derived from the Greek word macros meaning large.
Macroeconomics studies the economic system as a whole rather than the individual
economic unites that make up the economy. It is about the nature of economic
growth, the expansion of product capacity, and the growth of national income.

Deductive and Inductive Method

To study economics, two methods are used: Deductive method & Inductive method.
Deduction proceeds from general to particular while induction proceeds from
particular to general. Induction method involves the process of reasoning from
particular to general. Deduction method deduces conclusions from the truths
established by other methods.It involves the process of reasoning from certain laws
or principles which are assumed to be true, to analysis of facts. It isa descending
process in which we proceed from a general to principle to particular. While,
inductive is an ‘ascending process’.This method involves four stages; observation,
formation of hypothesis, generalization, and verification. This method proceeds
from particular to general, it is thus realistic. It helps in future inquiries.

What’s More

Task:

Identify and label the statement for the following words. Write the letter of your
answer in a given underlined before the statement.

a. Economics as wealth d. Economics as growth g.Macroeconomics

b. Economics as welfare e. Positive Economics h. Microeconomics
c. Economic as scarcity f. Normative Economics i. Inductive economics
j. Deductive economics

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_____ 1. The definition gave importance to economic growth.
_____ 2. Deals with total economics in business, national economy and
international trade.
_____ 3. It focuses only on material side.
_____ 4. It is a statistical method and use inquiries.
_____ 5. The definition points out the scarce resources.
_____ 6. Study the small things in economics like consumers.
_____ 7. This method is based on assumptions.
_____ 8. Part of study is the happiness of the people.
_____ 9. The definition points out about the happening of pandemic Covid19.
____10. The definition points out the implementation of anti terror bill in the
Philippines.

What I Have Learned

In studying economics, four definition need to be considered as what notable

person presented. These are economics as wealth, welfare, scarcity, and growth.
Although many criticize about each definition but it is still have been arguing of all
economists generation to generation. There are two branches of economics; the
macroeconomics and microeconomicsthis branches embodied the performance of
the economy as a whole and as an individual. Study of economics tells us about the
activities in our daily life. Make us wisely about economic activities. Guide us to
become better person, value the money how to save and spend wisely. Teach us to
solve problems and be prepared in the future.

What I Can Do

Question:

As an economist, what is important to you, study of wealth or study of the welfare

of a man? Explain your answer.

_________________________________________________________________________

_________________________________________________________________________
_________________________________________________________________________

15
Rubrics:

BASIS DESCRIPTION POINTS

The explanation given was precise and
Clear And Precise 10
clear
There Are Some
There are information that are
Information That 7
unanswered
Left Unanswered
Tried to explain what he/she answered
Point For Effort 4
however it is not clear
No Points No explanation given 0

Assessment

Below are Assessment tasks on lesson 1 of the module:

Instructions:

Differentiate the following scope of economics. Explain the

difference between the given words in each task. Write only the answer. Illustrate
your answer at least two examples.(Task 1;economics as an art andeconomic as a
science. Task 2; economics as wealth, welfare, scarcity, and growth. Task 3;Positive
and normative science.)

Task 1. ____________________________________________________________________

____________________________________________________________________________

___________________________________________________________________________

Task 2. ____________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Task 3. ____________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

16
Rubrics:

BASIS DESCRIPTION POINTS

The explanation given was precise and
Clear And Precise 10
clear
There Are Some
There are information that are
Information That 7
unanswered
Left Unanswered
Tried to explain what he/she answered
Point For Effort 4
however it is not clear
No Points No explanation given 0

Additional Activities

Task:

Modified True or False. Two statements are given. if only the first statement is true,
answer A; if only the second statement is true, answer B; If both statements are
true, answer C; if both statements are false, answer D. Write your answers on the
space provided.

______1. Macroeconomics examines aspect that influence individualeconomic

choices. Microeconomics examines the decisions of individual consumers.
______2. Positive science examines causes of problem. Normativescience focuseson
what ought to be?
______3. Command economy exists during primitive system. Market economy
decision is concerned on the workings of demand and supply.
______4. Economics is an art because theories and laws are explainedwith theaid of
numerical and statistical data. Economics is a science because
it is systematized body of knowledge in which economicfacts are
studied and analyzed.
______5. For whom to produce deals with demographic characteristics How
to produce- deals on the nature of goods to be produced.

Answer Key

17
What I Know What’s In What’s More

1. c 6. b 1. scarce 1. d 6. h

2. d 7. b 2. scarcity 2. g 7. j

3. c 8. a 3. social science 3. a 8. b

4. d 9. c 4. economics 4. I 9. e

5. b 10. b 5. wealth 5. c 10. f

What I Can Do Assessment Additional Activities

1. B

2. C

3. B

4. C

5. C

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 What I Know

Choose the letter which corresponds to the correct answer. Write your answer
before the number.

_____1. The application of statistical and mathematical theories to economics for

the purpose of testing hypotheses and forecasting future trends.
a. Applied Economics c. Econometrics
b. Economics d. Application
_____2. Who is the person behind applied economics?
a. Adam Smith c. John Neville Keynes
b. Alfred Marshall d. Lionel Robbins
_____3. Which of the following is not part of basic economic problem?
a. For whom to produce c. What to produce and how much
b. How to produce d. Where to produce
_____4. A condition where there are limited resources to satisfy all the needs and
wants of a population.
a. Applied c. Scarcity
b. Opportunity Cost d. Econometrics
_____5. Fill in the missing word. When it comes to the basic problem of the society.
Economics is concerned with________.
a. principles c. resources
b. production d. theory

Lesson
Differentiating Economics as Applied

3 Science in terms of Nature

You have learned about economics as a social science in terms of scope in the past
lesson. Now, you will learn how to differentiate economics as an applied science in
terms of nature.

What’s In

Study the following sentences. Write in the blank space if they are true or false.
______1. Economics is an art and science.

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______2. Microeconomics studies the economic system as a whole.
______3.Microeconomics studies the decision and choices of the individual units.
______4. Positive economics deals with what is- things that are actually happening.
______5. Positive economics is an overview of what is happening in the economy.

What’s New

Theoretical

+ = Econometrics

Applied

Figure 3
Question:

What is your understanding about the illustration above?

_________________________________________________________________________

_________________________________________________________________________

Rubrics:

BASIS DESCRIPTION POINTS

The explanation given was precise and
Clear And Precise 10
clear
There Are Some
There are information that are
Information That 7
unanswered
Left Unanswered
Tried to explain what he/she answered
Point For Effort 4
however it is not clear
No Points No explanation given 0

20
 What is It

Economics as an Applied Science

The idea of “applied” economics, that is, the notion that there is a class of activities
engaged in by economists that can properly be spoken of as the “application” of
economics. According to Marshall, 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. With these concerned human beings are applying all the knowledge of
economics to satisfy wants, this scenario called as applied economics.

Applied economics is the application of econometric theory and econometrics in

specific settings with the goal of analyzing potential income. Econometrics is the
application of statistical and mathematical theories to economics for the purpose of
testing hypothesis and forecasting future trends. It deals with practical issues in
fields that include demographic economics, labor economics, business economics,
agricultural economics, development economics, education economics, health
economics, monetary economics, economic history, and many others.

The term “applied economics” was attributed by John Neville Keynes as he was the
first to use the words to designate the application of economic theory to the
interpretation and explanation of particular economic phenomena. Applied
economics is the study of economics in relation to real world situations. It is the
application of economic principles and theories to real situation, and trying to
predict what the outcomes might be. In simpler definition, applied economics is the
study of observing how theories work in practice.

Modern Economics and Basic Problems of the Society

All modern economies are faced with basic economic problem to deal. The limited
resources have to lead to the problem of how to assign the scarce resources in
order to achieve maximum satisfaction. Economics is concerned with
production.Society has to decide what outputs will be produced and in what
quantity. Producer must have settled the basic economic problems of society.These
are, what to produce and how much, how to produce, and for whom to produce. In
what to produce and how much- society must decide what goods and services
should be produced in the economy. Having decided on the nature of goods that
will be produced, the quantity of these goods should also be decided on. How to
produce- this problems refers to selection of appropriate technique of production
that will be used to produce the goods and services. This refers to the resource mix
and technology that will be applied in production. For whom to produce- the
economic problem focuses on how the national product is to be distributed among
the members of the society. This will answer the question; For whom will the goods
and services be produced.

21
There are three economic systems that may affect the country it determines the
answer to the basic economic problems mentioned. These are Traditional economy,
Command economy and Market economy. Traditional economy, decisions are
based on traditions and practices upheld over the years and passed on from
generation to generation. In Command economy, authoritative system is practice.
This economy holds true dictatorial, socialist and communist nations. While
market economy, democratic form of economic system is practice. People’s
preferences are basis of the producer’s decisions on what goods to produce.

What’s More

Task:

Identify and label the statement for the following words. Write the letter of your answer in a
given underlined before the statement.

Choices:

a. Traditional economy d. Econometrics

b.Command economy e. Basic economic problem

c. Market economy f. Applied Economics

_____1. In this stage, do the activities of hunting, fishing, and farming.

_____2.The results of the combination of theoretical and applied.
_____3. In this stage, leaders took control of the economic life of the
individuals/group.
____ 4. The practicing of economic theory, principles, ideas and learning’s
in a specific purposes to achieve common objectives.
_____ 5. Shows when we face scarce resources.

What I Have Learned

The application of economic theory and econometrics signifies that economics is

being applied for. The practiced ofdifferent fields of economics to achieve common
purposes is now called as an applied economics. Applying economic theory in our
lives means trying to address actual economic issues and be able to do something
about it. Applied Economics involves economists taking generally accepted theory
and applying those theories to something that is happening in the real world, with
an eye toward determining what can reasonably be expected to happen next.

22
 What I Can Do

Task:

Make a list showing the economic resources you need to buy. Provide at least 10
resources. Find out what are insufficient/limited supplies of resources at this
moment. Provide an alternative solution of each insufficient resource to maximize
needs.

Rubrics:

BASIS DESCRIPTION POINTS

The explanation given was precise and
Clear And Precise 10
clear
There Are Some
There are information that are
Information That 7
unanswered
Left Unanswered
Tried to explain what he/she answered
Point For Effort 4
however it is not clear
No Points No explanation given 0

Assessment

Task:

Differentiate between applied and theoretical.

_________________________________________________________________________________
_________________________________________________________________________________
Rubrics:

BASIS DESCRIPTION POINTS

The explanation given was
Clear and Precise 10
precise and clear
There Are Some Information There are informations that are
7
That Left Unanswered unanswered
Tried to explain what he/she
Point for Effort 4
answered however it is not clear
No Points No explanation given 0

23
 Additional Activities

Task:

Elimination. Four terms/items are given. Choose the letter that corresponds to the
term/items not related to the other three. Write your answers on the space
provided.

_____ 1. a. application of economic hypothesis

b. application of economic development
c. application of economic theory
d. application of economic principles
_____ 2. a. applied economics c. labor economics
b. business economics d. national economics
_____ 3. a. wealth –getting c. wealth- producing
b. wealth- doing d. wealth- using
_____ 4. a. goods c. resources
b. idea d. services
_____ 5. a. insufficient resources c. scarce resources
b. limited resource d. unlimited resources

Answer Key

What I Know What’s In What’s More

1. a 1. True 1. a

2. c 2. False 2. d

3. d 3. True 3. b

4. c 4. True 4. f

5. b 5. True 5. e
What I Can Do Assessment Additional Activities

1. b
2. a
3. b
4. c
5. d

24
 What I Know

Choose the letter which corresponds to the correct answer. Write your answer
before the number.

_____1. Applied economics has a huge contribution in to solve in;

a. economic agenda c. economic principles
b. economic issues d. economic theory
_____2. In what discipline of application does a labourer earns a minimum wage
fixed by law?
a. business economics c. international economics
b. household economics d. National economics
_____3. How do economics being applied?
a. in chemistry c. in studying of organisms
b. in plants’ life cycle d. in our daily activities
_____4. Why do we need to apply the theory of economics in a business’ workplace?
a. able to understand the economic activity of our country
b. to become a good worker
b. to face the problem of modern life
d. to improve the management in our ordinary household
_____5.Applied economics has a wide variety of scope covered the following
EXCEPT;
a. agriculture c. labor and capital
b. business world d. living organisms

Lesson
Differentiating Economics as

4 Applied Science in terms of Scope

You have learned about economics as an applied science in terms of nature in the
past lesson. Now, you will learn how to differentiate economics as an applied
science in terms of scope.

What’s In

Study the following sentences. Write in the blank space if they are true or false.

25
1.______Economics is useful to know the diversity of living organisms in our world.
2.______Application of business economicsdeals with how decisions should be
made by business economists to achieve organizational goals.
3.______Applied economics can assess income in statistical data.
4.______Applied economics helps to present findings about ecosystem.
5.______Economics is a pure applied.

What’s New

Economics
as an
Applied
Science

Household/ Business/ National / International/Labor/Finance/Politics/ Others

Figure 4
Question:

What is your understanding about the illustration above?

__________________________________________________________________________________

__________________________________________________________________________________

Rubrics:

BASIS DESCRIPTION POINTS

Clear and Precise The explanation given was precise and clear 10
There Are Some There are information that are unanswered
Information That and/or the connection between the products 7
Left Unanswered or service is not that clear
Tried to explain what he/she answered
Point for Effort however it is not clear what is the 4
connection between the given product

26
 What is It

Economics as Applied Science in a Wide Variety

In the social science, applied economics refers to the use of economics in different
parts of society. The application of economic theory and econometrics in Household
economics, Business economics, National economics, and International economics
are concerned to this topic. This contrasts against the core economics, which
studies the theory of economies without having applications itself. Applied
economics is visible in our ordinary household. Anyone who knows economic
principles will be able to improve the running of household. Efficient and effective
budgeting is the most strategies on how to spend the resources wisely in a
household level. When a person or group of persons begins to work, they come
under the system of business economics in their workplace. The dealing of people
and more complicated things like rent, salaries, profits, interests, etc. are examples
of the said application. Economic issues and problems affecting the whole nation
come under the national economics. The use of different statistical data is
concerned in order to implement strategies to remedy the situation. The highest
stage of economic activity involves the business of one country with other
countries. These include the activities like, trading, tourism, globalization, etc.
Applied economics has a wide variety of scope covered Industrial Economics, Labor
Economics, Finance, Money and Banking, Growth, Public Finance, Political
Economy, Law and Economics , Environmental Economics and many more.

Applied Economics as a Significant Tool

Applied economics has a huge contribution in relation to Philippine economic

problems today. People applied the economic theories and principles in real-life
situations and use as significant tools to help address the country’s economic
problem. Applying economic theory in our lives means trying to address actual
economic issues and be able to do something about it. The concept of scarcity and
choice should encourage us as individuals to help in our own way to provide
solutions to the country’s economic problems especially during pandemic. Applied
economics solves economics issues by providing information as to how people,
business, and governments behave. This can enable economic actors to make
better decisions and solve problems.

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. 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. 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.

27
 What’s More

Instruction:
Mark a check whether you agree or disagree on your chosen answer
inside the box. Agree Disagree
Economics as an applied science in the following concept:
1. Health measures and protocol due to covid 19.
1.
2. Effective measures to assess peace and order.
2.
3. The sunlight and the photosynthesis. 3.
4. The rights of the people. 4.
5. The due process. 5.
6. The life of the animals. 6.
7. The water cycle. 7.
8. Practice logical thinking before decision-making. 8.
9. Policies and implementation. 9.
10. The statistical data about population. 10.

What I Have Learned

An applied economics prepares us in a wide variety of careers in public policy and

business analysis including finance, trade, environmental management and more.
The topics provide a strong background in economic theory and empirical methods.
You will select an emphasis area related to your career goals. It also helps us to
manage our household activities. Applied economics helps companies and entire
governments evaluate risks to take the proper measures to ensure stability based
on numbers and trends.

What I Can Do

Task:

Present your family’s budget for the entire week. Make a table and apply the basic
budgeting plan using simple format. Then, make 3 strategies to lessen your family’s
expenses.

28
Rubrics:

BASIS DESCRIPTION POINTS

Clear And Precise The explanation given was precise and 10

clear
There Are Some There are information that are
Information That unanswered and/or the connection 7
Left Unanswered between the products or service is not
that clear
Tried to explain what he/she answered
Point For Effort however it is not clear what is the 4
connection between the given product
No Points No explanation given 0

Assessment

Task :

Identify and classify the words that signify the economics as a social science and as
an applied science in the given box.

*Application *Wealth *Econometrics

*Welfare *Strategies to Solve Problems *Acts as Mechanism

*Human Behavior *The Use of Significant Tools *Utilization of Resources
*Needs and Wants of the People

Economics as a Social Science / Economics as an Applied Science

_______________________________ _____________________________________

_______________________________ _____________________________________

_______________________________ _____________________________________

_______________________________ _____________________________________

_______________________________ _____________________________________

29
 Additional Activities

Task:

Assess what it takes for the situation of term called as “new normal” on this
pandemic to cope up the economic problem of the Philippines. What does it take for
you to share something to your family, peers and community? List down three
significant ideas to help address the country’s economic problem.

Rubrics:

BASIS DESCRIPTION POINTS

Clear And The explanation given was precise and

10
Precise clear

There are information that are

There Are Some
unanswered and/or the connection
Information That 7
between the products or service is not
Left Unanswered
that clear

Tried to explain what he/she answered

Point For Effort however it is not clear what is the 4
connection between the given product

No Points No explanation given 0

Answer Key

30
 What I Know What’s In What’s More

1. b 1. False 1. Agree 6. Agree

2. a 2. True 2. Agree 7. Disagree

3. d 3. True 3. Agree 8. Agree

4. b 4. True 4. Disagree 9. Agree

5. d. 5. True 5. Agree 10. Agree

What I Can Do Assessment Additional Activities

Economics as a Social
Sciene:

*Wealth ,*Welfare* Human

Behavior, * Utilization of
Resources, * Needs & Wants
of the people

Economics as an Applied
Sciene:

*Application,
*Econometrics, *Strategies
to Solve Problems, *The
Use of significant Tools,
*Acts as Mechanism

References

Dinio, Villasis (2017) Applied Economics First Edition, Rex Bookstore Inc.
Gans, King, Stonecash, Mankiw (2009) Principles of Economics 4th ed. Cengage
Learning Australia Pty limited
Pindyck, Rubinfield(2009) Microeconomics 7th ed. Pearson Prentice Hall
Sonia M. Zaide(2002) Living Economics, 2nd Edition, All-Nations Publishing Co.,
Inc.
Stephen L. Slavin(1991) (Introduction to Economics, 2nd Edition
Applied Economics Definition, www.investopedia.com
Economics Major Theories, www.science.jrank.org

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For inquiries or feedback, please write or call:

Department of Education - Bureau of Learning Resources (DepEd-BLR)

Ground Floor, Bonifacio Bldg., DepEd Complex

Meralco Avenue, Pasig City, Philippines 1600

Telefax: (632) 8634-1072; 8634-1054; 8631-4985

Email Address: blr.lrqad@deped.gov.ph * blr.lrpd@deped.gov.ph

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