APPECO: APPLIED ECONOMICS

MODULE 1: APPLIED ECONOMICS

1st SEMESTER | S.Y. 2022-2023

TOPIC RESOURCES AND THE STUDY OF ECONOMICS

SUBTOPIC

SUB-SUB TOPIC
Resources or wealth are the products of nature, qualities of individuals, and man made things which
are used in producing goods or services.

APPLIED ECONOMICS NATURAL RESOURCES

 Applied economics applies the conclusions drawn from economic theories and empirical Natural resources are natural assets (raw materials) occurring in nature that can be used for
studies to real-world situations with the desired aim of informing economic decisions economic production or consumption.
and predicting possible outcomes.
 Applied economics is the application of economic theory to determine the likely
outcomes associated with various possible courses of action in the real world. By better
understanding the likely consequences of choices made by individuals, businesses, and
policy makers, we can help them make better choices
 The purpose of applied economics is to improve the quality of practice in business, HUMAN RESOURCES
public policy, and daily life by thinking rigorously about costs and benefits, incentives,
and human behavior.
 If economics is the science of studying how people use various, limited means available Human resources are the knowledge, skill, training, and experience that individuals need to produce
to them to achieve given ends, then applied economics is the tool to help choose the goods and services within their economy.
best means to reach those ends. As a result, applied economics can lead to "to do" lists
for steps that can be taken to increase the probability of positive outcomes in real-world
events.

REVISITING ECONOMICS AS A SOCIAL SCIENCE PHYSICAL RESOURCES

 WEALTH The physical resources include tangible items that are necessary and available for a business to
 DECISION MAKING function. These are items that take space, have a value, and are used in the operation of the company.
 ALLOCATION PROCESS Physical resources are necessary for all types of business.

ECONOMICS AS A STUDY OF WEALTH

The science of wealth-getting and wealth using the motivation of the process of wealth accumulation
is the utilization of wealth for the individual’s satisfaction and society’s welfare

ECONOMICS AS A STUDY OF MAKING CHOICES

Economics is study of how people make choices under conditions of scarcity, and of the results of RESOURCES are LIMITED,
those choices for society. The study of individual choice under scarcity and its implications for the while Society’s
behavior of prices and quantities in individual markets. NEEDS and WANTS
Are considered
In everything that we do, whether we produce or consume, whether it is wealth-getting or wealth- UNLIMITED
using, we make decisions and these decisions are based on alternative choices

OPPORTUNITY COST

 The choice in the use of resources in a particular activity should take into consideration
the benefits foregone from other alternatives which were not chosen.
 There are sacrifices or opportunity costs in everything that we do.

ECONOMICS AS A STUDY OF ALLOCATION

 Allocation of scarce resources to answer the unlimited human wants

SOCIAL SCIENCE

The study of the various modes and aspects of human interactions in a group as these people aspire
to preserve their group as a social unit, to make it stable and to promote its growth, expansion, and
development.
 APPECO: APPLIED ECONOMICS
MODULE 2: SCARCITY PRINCIPLES
1st SEMESTER | S.Y. 2022-2023
LECTURER: MR. MERIN

TOPIC Members of the society has to survive materially but because resources are limited in the light of
several alternative uses, this limitation implies that the society has to devise a mechanism of utilizing
SUBTOPIC these limited resources to answer the human wants of the people that will result in the highest level of
social welfare.
SUB-SUB TOPIC

SCARCITY PRINCIPLES SHORTAGE

Shortage is a condition when the supply of a good, service or resources is not enough to meet the
The limitations of resources to answer the expanding human wants.
demand.
SCARCITY when a supply of a resource cannot meet demand.

Why is scarcity considered a key economic problem?

Scarcity is the basic economic problem. It arises from the insufficiency of resources to satisfy people’s
wants. Rich people face scarcity when they want more than they can buy, and when they can't be in
two places at once. Scarcity is not a matter of sympathy; it is merely a fact about the relationship
between unlimited wants and limited resources. Poor people also face scarcity, but it is not the same
thing as poverty. Since resources are scarce in relation to wants, people must decide how they will use
those resources. This is so even for the most advantaged among us, since resources are finite. Scarcity,
therefore, is not a problem that can be solved, but rather a condition that people can address in a
rational manner.

SURPLUS

an amount of something left over when requirements have been met; an excess of production or
supply over demand.

ALLOCATION AND THE ACT OF ECONOMICS

because of the problem of scarcity there is a need for a mechanism of distributing limited resources to
meet the expanding human wants.

ALLOCATION A social mechanism to respond to the economic problem of scarcity.

3 MAJOR MECHANISMS OF ALLOCATION

1. MARKET SYSTEM
2. COMMAND
3. TRADITION

The market can be considered not only a place but a state when transactions are made.

SUPERMARKET PUBLIC MARKET

STOCK MARKET
 APPECO: APPLIED ECONOMICS
MODULE 2: SCARCITY PRINCIPLES
1st SEMESTER | S.Y. 2022-2023
LECTURER: MR. MERIN

TOPIC

SUBTOPIC

SUB-SUB TOPIC

Discounts to senior citizens

TELEMARKET E-COMMERCE

COMMAND/COMMODITY

Price of commodity both an index of cost or sacrifice (for producers) and

Benefit or satisfaction (for buyers)
Home for the aged for free
In a command system, the state or an agency of the government may be in charge in the allocation of
resources by using its political power in answering the basic economic problems of production and
distribution.

TRADITION

Tradition the tempering mechanism of tradition is made through the formation of simple of human
wants which are shaped by social norms and values.

Tipping

To correct the individuals whose behavior are considered against the social norm the use of
community pressure and criticisms including shaming are undertaken to temper the behavior of
individuals.

Examples: Bayanihan (during typhoons and other calamities)

Addressing wasteful behavior

“ Ubusin nyo ang pagkain nyo, maraming bata ang walang makain.”