APPLIED ECONOMICS

Senior High School

Name of Learner: ___________________________ Quarter 1- Week 2

Section: ___________________________________ Date: ___________________

Examine the Utility and Application of Applied Economic Issues and Problems

Background Information for Learners

This course details with the basic principles of applied economics and its
application to contemporary economic issues facing the Filipino entrepreneur such as
prices of commodities, minimum wage, rent and taxes. It will also talk about economics
as a study of economic activities of a man and how it man can be only concerned with
the wealth-getting and wealth-using activities.

It covers an analysis if industries for identification of potential business

opportunities. The main output of the course is the preparation of a socioeconomic
impact study of a business venture.

Applied Economics – It 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.
Commodity – It is a reasonably interchangeable good or material, bought and sold freely as
an article of commerce. This include agricultural products, fuels, and metals and are traded in
bulk on a commodity exchange or spot market.

Have you ever wondered why prices keeps on going up and rarely goes down?

This is what
we call
INFLATION.

https://www.canva.com/design/DAED-
0E5sxU/bXO3fup6BS35WzGKAm_moQ/edit

Inflation is defined as
A sustained increase as a sustained increase in the price level or a fall in the
value of money. When the level of currency of a country exceeds the level of
production, inflation occurs. Value of money depreciates during inflation

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The Basic Economic Problems and Economic System

Since the scarcity of resources is central to the study of economics, it is necessary to properly
allocate these resources to meet people’s unlimited wants. This process of allocation answers
three economic questions:
What to produce?

A society determines the kind and quantity of products it will

produce depending on what the consumers want to buy or are
willing to pay for.
Source: www.canva.com

How to produce?
A society decides who will produce goods and what process of
production will be used. Goods may be produced by corporations,
small business owners, or the government itself. The process of
producing goods may be addressed depending on the costs and the
availability of resources needed. Source: www.canva.com

For whom to produce?

The question revolves around the issue of who will benefit from the
goods and services produced. This depends on the distribution of
wealth in a particular society. Therefore, a consumer who has the
capacity to pay for certain goods and services is more likely to benefit
than one who cannot afford them.
Source: www.canva.com

The answers for what, how, and for whom to produce are influenced by the structure
of a society’s economic system.

An economic system is characterized by the type of institution responsible for the

management and allocation of resources used in the production of goods and services.
Generally, there are three known economic systems, namely, market economic system,
command economic system and mixed economic system.

MARKET ECONOMIC SYSTEM where all economic resources are owned by

private entries. This system proposes the following answers to the three
economic questions:

1. Produce goods that yield high profits

2. Produce at maximum efficiency with minimum
costs
3. Distribute the goods to those who can afford them

https://www.canva.com/design/DAED-0E5sxU/bXO3fup6BS35WzGKAm_moQ/edit

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 COMMAND ECONOMIC SYSTEM where all resources are owned by the
government. This system proposes the following answers to the three economic
questions:

What to produce – producing more public goods like roads, public

schools and public hospitals
How to produce – is answered by employing all possible laborers
and using available machinery and equipment

https://www.canva.com/design/DAED-0E5sxU/bXO3fup6BS35WzGKAm_moQ/edit

MIXED ECONOMIC SYSTEM where all three questions are answered by both
the government and private entries in consideration of their mutual benefit.
Economic resources are owned by both.

Today more countries use command oriented than market

oriented while others prefer market oriented economic
system.

https://www.canva.com/design/DAED-0E5sxU/bXO3fup6BS35WzGKAm_moQ/edit

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 can teach valuable lessons on how to avoid the recurrence of
a negative situation, or at least minimize the impact
Economics originally focused on studying the interdependence among people and
how society is defined by the movement of goods and services in relation to the
needs and wants of people. Modern economics on the other hand, focuses on how
information and technology define decision making and organization in an
economy
Scarcity and unlimited human wants and needs are fundamental concepts in
Economics. Reconciling the reality of scarcity with unlimited wants and needs is
central to study of Economics
Economic resources and factors of production include land, labor, capital, and
entrepreneurship. These resources or factors must be properly allocated to
effectively address scarcity. The process of allocation is defined by three economic
questions

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 Learning Competency with Code

Examine the utility and application of applied economics to solve economic problems
(ABM_AE12-Ia-d-2)

ACTIVITY I.

WORD HUNTING TIME

Directions: Follow the word clues and attempt to fill in all the puzzle’s squares.

https://www.slideshare.net/HannahCu
llen/lesson-2-economics-as-an-applied-
science

https://www.slideshare.net/RowenaAl
arcon/introduction-applied-economics

DOWN
1. This means doing hard physical work.
2. This is the branch of knowledge concerned with production, consumption and transfer of wealth.
3. It occurs when a person who is actively searching for employment is unable to find work.
4. A term for a state of being short in supply.
5. This is the state of being extremely poor.

ACROSS
5. This is a system of money in general use in a particular country.
6. They manufacture from components or raw materials.
7. This is a term when a general increase in prices and fall in the purchasing value of something
9. It is considered a stock or supply of money, materials, staff and other assets.
10.This is a term for financial gain, especially the difference between the amount earned and the
amount spent.

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ACTIVITY II.

Directions: Fill-out the table.

What are the available commodities in your community and how much do they sell them?
(2 pts. for every commodity provided with the price of selling it, 1pt. if there is commodity but
no price provided)

Product/ Commodity Price

Do you agree that being familiar with the prices of the commodities in your area, would help
us understand Applied Economics better? Explain your answer.

ACTIVITY III.

Directions: Identify a significant problem being experienced by your family, community, or

school. Use your knowledge of Economics to explain how this problem came about, and what
can be done to address it. Use the table below as a guide. (1pt. each for every answer provided)

Problem/Issue

Related Economic Concepts

What gave rise to this problem?

What are the possible solutions

to this problem?

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ACTIVITY IV.
Directions: Discuss 3 economic problems that you observe in your community and state what
solutions can be suggested in order to solve it. (2 pts. for every problem provided with a
suggested solution, 1pt. if there is a problem provided but no solution provided)

Economic problems in your community Suggested solution in order to solve the

Economic problem

ACTIVITY V.

Directions: Classify what strategy the government is using to fight inflation. Support your
answers by facts or data from valid sources. Write it on a short bond paper with Arial as your
font style with a font size of 12. Please observe proper margin (1’ top, 1’ bottom, 1’ left and .5’
right. Use white folder with fastener. (organization 5pts., relevance to the topic 5pts., coherent
and meaningful 5pts., and related to the current national issues 5pts.)

Reflection

Directions: Put a check on the blank which corresponds to how well you learned the lesson.

Items Strongly Agree Moderately Agree Disagree

I learned to understand why
economics is an applied
science.
I learned how to Identify the
basic economic problems.
I learned how applied
economics work.

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References

Bellman, E. (2011), Nov. 16). Asian Bloc Looks to U.S. for Trade
Boost. The Wall Street Journal Retrieved from Arangkada Philippines,
https://www.investphilippines.info/arangkada/asian-bloc-looks-to-u-s-for-trade-boost/
(Bellman. E. 2011)

Chavez, G. S. (2002). Selected studies on APEC-related issues.

Philippine Apec, Study Center Network.

Heydarian, R. J. (2013), May 18.) Philippine Economy: Booming, But Poverty and
Unemployment Remain Problematic. Mic. Retrieved from
http://mic.com/articles/39507/philippines-economy-booming-but-poverty-and-unemployment-
remain-problematic

Manapat, C., & Ang, A.P. (2017). Macroeconomics: An Introduction. (2nd ed.). Quezon City:
C&E Publishing

Answer’s Key:

Activity I: Crossword puzzle answers

1. profit 6. unemployment
2. scarcity 7. labor
3. produce 8. resources
4. poverty 9. currency
5. inflation 10. economics

Activity II: Answers may vary based on the pointing system provided
Activity III: Answers may vary based on the pointing system provided
Activity IV: Answers may vary based on the pointing system provided
Activity V: Answers may vary based on the pointing system provided

Prepared by:

Dennis Z. Bonifacio
Teacher II