Our Lady of the Lake School

#51 Cupang, Muntinlupa City

12

APPLIED ECONOMICS
MIDTERM – Module 1

What I need to know?

After going to this lesson you are expected to:

 Define the concept of economics.

 Differentiate economics as social science in terms of nature and scope.

UNDERSTANDING SOCIETY, CULTURE, AND POLITICS 1

 LESSON
APPLIED ECONOMICS:

1 Revisiting Economics as a Social Science

Content
REVISITING ECONOMICS AS A SOCIAL SCIENCE

WHAT IS ECONOMICS?

 Study of what constitutes rational human behavior in the endeavor to fulfill needs and wants.
 Derived from the Greek word “Oikonomia” meaning household management.
 Understanding how society allocates its scarce resources.
 Almost always, human activities involve economics.

DEFINITION OF ECONOMICS FROM DIFFERENT PERSPECTIVES

1. Fajardo – Economics is the proper allocation and efficient use of available resources for the
maximum satisfaction of human wants.
2. Nordhaus – Economics is a science of choice. It studies how people choose to use scarce resources
to produce various commodities.
3. Sicat – Economics is a scientific study which deals with how individuals and society may generate
choices.
4. Webster – Branch of knowledge that deals with production, distribution, and consumption of goods
and services.

ECONOMICS IN A PROCESS

Unlimited
Scarcity Choices
Wants

UNDERSTANDING SOCIETY, CULTURE, AND POLITICS 2

EXAMPLES OF ECONOMIC ACTIVITIES:

 Paying of taxes
 Earning money
 Buying goods and services
 Depositing and withdrawing money in the bank

WHY IS ECONOMICS CLASSIFIED AS A SOCIAL SCIENCE?

Economics is classified as a social science because it deals with the study of human’s life and how h
lives with other men.

MICRO and MACRO ECONOMICS

 MICROECONOMICS deals with the economic behavior of individual units.

 MACROECONOMICS deals with the economic behavior of the whole economy.

DIVISIONS OF ECONOMICS
1. Production – refers to the process of producing or creating goods needed by the households to
satisfy their needs.
2. Distribution – refers to the marketing of goods and services to different economic rules.
3. Exchange – refers to the process of transferring goods and services to a person in return for
something.
4. Consumption – refers to the proper utilization of economic goods.
5. Public Finance – pertains to the activities of the government regarding taxation, borrowings, and
expenditures.

FACTORS OF PRODUCTION
1. Land 2. Entrepreneurs 3. Labor 4. Capital

UNDERSTANDING SOCIETY, CULTURE, AND POLITICS 3

 Assessment 1.1

A. DIRECTION: Define the factors of production

 Land
________________________________________________________________________________
________________________________________________________________________________

 Entrepreneur
________________________________________________________________________________
________________________________________________________________________________

 Capital
________________________________________________________________________________
________________________________________________________________________________

 Labor
________________________________________________________________________________
________________________________________________________________________________

B. DIRECTION: Aside from what is stated on the module, list down five human activities involving the
concept of economics. Explain.

1. ________________________________________________________________________________

2. ________________________________________________________________________________

3. ________________________________________________________________________________

4. ________________________________________________________________________________

5. ________________________________________________________________________________

Reference
WEBSITES

https://www.slideshare.net/HannahCullen/revisiting-economics-as-a-social-science

https://www.google.com/search?
q=difference+between+macro+and+micro+economics&sxsrf=ALeKk02iF3D665pk4c2ZbYlZ7rA3twGcQ:160786
6148052&source=lnms&tbm=isch&sa=X&ved=2ahUKEwiS9aUiMvtAhWYHXAKHZNqBK0QAUoAXoECB0QAw&
biw=1366&bih=657#imgrc=Utpi4yiMjGWV0M

UNDERSTANDING SOCIETY, CULTURE, AND POLITICS 4

UNDERSTANDING SOCIETY, CULTURE, AND POLITICS 5