Name: Grade/Section: Date: Total Score: Economics as a Social Science and Applied Science in Terms of Nature and Scope Learning Competency: Differentiate economics as social science and applied science in terms of nature and scope. At the end of the session, the learner should be able to explain the determine its fields: the micro and nature and scope of economi macroeconomics, resourcefully use the different resources in the production of goods and services, and in real world, efficiently consume these finished products Experiential Activity: (Record this in your journal notebook) Using a pie chart, show your regular allowance for the week and how you budget this for your school and personal expenses. Learning Materials are for nonprofit educational purposes which are exclusively used for the ‘Schools Division of Digos City only. Copies are not for sale. 1Introduction to Economics ‘The origin of the term “economics" comes from two Greek words, oikos (meaning household) and nomus (system of management). Oikonomia or oikonomos simply means “management of household.” According to Fajardo (the author of the book entitled Economics, third edition), “economics is the social science that deals with proper allocation and efficient use of available resources for the maximum satisfaction of human needs and wants.” Professors Paul A. Samuelson and William D. Nordhaus tate that “economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people.” While Gerardo P. Sicat, says “economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses. The key words in their definitions are science, scarce resources, human behavior and ends. The Nature and Scope of Economics Economics is regarded as a social science because it uses scientific methods to build theories that can help explain the behavior of individuals, groups and organizations. Economics attempts to explain economic behavior, which arises when scarce resources are exchanged. Social Science is, broadly speaking, the study of society and how people behave and influence the world around them. As a social science, economics studies how individuals make choices in allocating scarce resources to satisfy their unlimited wants. According to Molina, J. A. & Nadal, G. J I (2020), economics is a Social Science concerned with the explanation and prediction of observed phenomena in society. Economics studies the way in which societies solve the fundamental problems of reconciling the unlimited desires of individuals with scarcity of resources, susceptible to numerous alternatives. Economics is also an Applied Science because it uses the scientific method in its explanations, which consists of observing reality and presenting questions and problems to arrive at the formulation of theories and models. As an applied science, it follows a systematic procedure to solve issues and problems of the society Learning Materials are for nonprofit educational purposes which are exclusively used for the ‘Schools Division of Digos City only. Copies are not for sale. 2The Fields of Economics There are two branches of economics. These are macroeconomics and microeconomics. Macroeconomies is a division of economics that is concerned with the overall performance of the entire country. It studies the economic system as a whole rather than individual economic units that make up the economy. eestor cord Individual markets |~ wnote economy (Gop) Effect on price ofa good [JK inflation (general price level) |_| individual labour market |_| Employment/unemplayment ndividual consumer behaviour |. Aggregate demand (AD) Supply of good L_ Productive capacity ofeconomy Microeconomics, on the other hand, is concerned with the behavior of individual entities such as the consumer, the producer, and the resource owner. It studies the decisions and choices of the individual units on how these decisions affect the prices of goods in the market. The Economic Agents/Stakeholde: 1, Consumers * Consume goods and services /offer production factors * Maximize utility 2. Producers * Produce goods / demand productive factors © Maximize profit 3. The public sectors * Attempt to maximize the well-being of society The agents interact among themselves in a specific territorial, social, natural and/or cultural framework that determines their relationships to the market. Learning Materials are for nonprofit educational purposes which are exclusively used for the ‘Schools Division of Digos City only. Copies are not for sale. 3Economic Resources Economic resources, also known as factors of production, are the factors used in producing goods or providing services. In other words, they are the inputs that are used to create things or help you provide services. These resources are, by nature, limited and therefore, command a payment that becomes the income of the resource owner. 1, Land - soil and natural resources that are found in nature and are not man-made. Owners of lands receive a payment known as rent. 2 8 2. Labor - physical and human effort exerted in production. It covers manual workers like construction workers, machine operators, and production workers, as well as professionals like nurses, lawyers, and doctors. The term also includes jeepney drivers, farmers, and fishermen. The income received by laborers is referred to as wage. 3. Capital - man-made resources used in the production of goods and services, which include machineries and equipment. The owner of the capital earns an income called interest. 4, Entrepreneurship - An entrepreneur is a person who combines the other factors of production - land, labor, and capital - to earn a profit. The most successful entrepreneurs are innovators who find new ways to produce goods and services or who develop new goods and services to bring to market. Without the entrepreneur combining land, labor, and capital in new ways, many of the innovations we see around us would not exist. sees Learning Materials are for nonprofit educational purposes which are exclusively used for the ‘Schools Division of Digos City only. Copies are not for sale. 4Characteristics of Resources 1. Scarcity - insufficient resources to supply all the desires and needs of individuals. In the production of goods and services, there are issues that economics may encounter. These include: © Land - inadequate land and natural resources; polluted areas; overcrowded spaces. © Labor ~ unskilled workforce; mismatch of jobs © Capital - low quality of equipment/machines; insufficient fund /capital; © Entrepreneurship — inadequate training of entrepreneurs; limited opportunity; scarcity of great ideas but many competitors in the market. 2. Multiple use - resources can have more than one possible use. For example, a plot of land can be used to plant coffee or to build a factory. 3. Partially replaceable - one resource can replace another in the production of a good or service (e.g., replace manual labor with technology). Scarce resources and unlimited desires > Scarcity Scarcity and alternative uses + Choice Choice —> Opportunity cost Module 1: Worksheet 1 (NOTE: Record this in your journal notebook) Direction: Identify which economic resource is referred to by the following words. Write your answer on the blank before each number. 1. Entertainers 6. Technology 2. Minerals 7. Production Equipment 3. Forest 8. Engineers 4. Marine Resources 9. Call Center Agents 5. Teachers 10. Business Proprietor Learning Materials are for nonprofit educational purposes which are exclusively used for the ‘Schools Division of Digos City only. Copies are not for sale. 5Module 1: Worksheet 2 (NOTE: Record this in your journal notebook) Direction: Categorize the characteristics of microeconomics and macroeconomics using the diagram below. This will enhance your creativity to solve issues in the future. * Studies the behavior of individual economic units; * Focuses of the behaviour of individual in the market * Focuses on parts of the economy: individuals, firms, and industries; *Studies the economy as a whole * Focus’ s on goals like production standard of living, unemployment, and inflation. i* Policies are focused on monetary policy and fiscal policy. *Studies of markets of good and services Microeconomic: lacroeconomics References: Book Applied Economics, Rosemarie P. Dinio, PhD and George A. Villiasis, , First Edition Websites: https:/ /www.{frbsf.org/education/ publications /doctorecon/2000/july/econ omics-economists/ https: / /www.slideshare.net/HannahCullen/revisiting-economic: social-science https:/ /www.stlouisfed.org/education /economic-lowdown-podcast- series /episode-2-factors-of-production https:/ /www.slideshare.net/sareenaikbal/economics-and-decision-making Prepared by: Ermelyn Abawag-Remonde Learning Materials are for nonprofit educational purposes which are exclusively used for the ‘Schools Division of Digos City only. Copies are not for sale. 1