MODULE 2

IN
APPLIED ECONOMICS

Rosary Leen A. Sampayan Grade 12 – ABM A

PRETEST
Part I. Identification:
Direction: Please read and analyze the questions carefully. 1.) What do you think were the
resources used to produce the products dresses? 2.) What were the issues/problems in the
production of the products?
RESOURCES IN PRODUCTION ISSUES/PROBLEMS IN PRODUCTION
Machineries Machine malfunction causes delays in production
(e.g., sewing machine; cutting machine; embroidery process that would also cause the company to be
machine) unable to meet quantity demand.

Insufficient supply of materials caused by the limited

Textile Materials (e.g., wool; cotton; silk; polyester) resources from the suppliers of the textiles. For
example, the plantation of cotton was destructed by
the typhoon making the suppliers unable to produce
the textile.
Natural hazards that can cause delay in the
Textile Accessories transportation of goods, from the supplier to the
company.
Incompetent workers create low-quality
Human labor performance. Therefore, low-quality product.

Part II. Matching Type:

Match Set A or the central economic issues and problems to Set B or the description of economic
issues.
1. What to produce 3. Whom to produce.
B. C.
2. How to produce 4. What provision in the production of products
D. A.
Part I Multiple Choice.
Directions: Kindly choose the letter of the correct answer. Encircle your answer.
1. The physical effort of the manpower to produce the basic needs of the consumers, describes
which factor of production?
C.
2. The initiative and creativity to produce something new describes which factor of production?
D.
3. The equipment of the coffee shop to produce cups of coffee, are what kind of goods or products?
C.
4. Which best of the following best describes economics as a social and an applied science?
D.
5. The following are examples of customers’ basic needs.
A.
Part II. Matching Type
Direction: Please match the resources with the statements.

A) Land C) Labor
B) Capital D) Entrepreneurship

Entrepreneurship 1. The idea for a car that runs on a rocky road

Land 2. The crude oil used by ABM Firm to produce gasoline
Capital 3. The machine used by Mang Jose, a tailor to stitch PPEs
Labor 4. The manpower to build bridges and houses
Labor 5. Technicians who repair computers

Activity No. 1 Let’s analyze this passage. This will help you understand our new topic on the basic
economic issues and problems in the production of goods and services. Are you ready? If yes, you
may now analyze the situation.
Problem 1 You read about a travelling situation in which some airline passengers seem to get a “fast
pass” through security and move effortlessly through the boarding process, while other passengers
are waiting in long lines. In this example, the travelers who are moving quickly through the
boarding process are probably:
a) VIP passengers waiting longer more in an inconvenient line
b) Passengers who value time and convenience and are willing to pay additional fees for the
privileges and other services
c) Loyal passengers whom they knew beforehand in which line to go to avoid delays and
inconveniences
d) Government officials who are seated in the executive area
ANSWER:
The travelers in the example are most likely or generally passengers who value time and
convenience and are willing to pay additional fees for the privileges and other services. This type of
passengers are usually passengers that are publicly known or personally known by the company
and they can also be normal citizens with privileges like wealth in which they will be able to pay
additional fees. This kind of situations usually happen everywhere, not only on airline companies.
However, companies should not tolerate this behavior because this is a type of bribery, which is
unethical. In this situation, money is used as an instrument to gain personal advantage.

Activity 2. Multiple Choice (with critical thinking analysis)

Direction: Please encircle the correct answer.
1. Scarcity of resources in your locality (Manila) is evident. Only available are fabrics, electric
sewing machines and skilled workers. The government said, you are only allowed to work from
home to be safe and free from infection of viruses. Which items most likely you need to produce?
A.
2. Manila is ranked 2nd in the most cases of COVID patients in Metro Manila. The city needs urgent
services of the medical frontliners in curing the increasing number of patients. There is scarcity in
the raw materials for production. To whom would you produce first the available resources?
C.
3. There is an urgent need of PPEs by the medical frontliners in the City of Manila due increasing
number of COVID patients every day. Which is not true of producing the products (PPEs)?
D.
4. The ABM Manufacturing Company decides to produce more on liquid soap than bar soap to
supply the growing demands in the market. It solves issues on:
D.
CHECK YOUR UNDERSTANDING
Fill in the Blanks.
Directions: Please read and answer the following sentences
Among nations, these are the common economic problems on production of goods and services: a)
what to produce; b) for whom to produce; c) how to produce; d) what provisions/laws should be
made for economic growth?
Economics can be a tool to solve the fundamental problem in economics which is scarcity in the
production of goods and services.
The strategic solutions/decisions/options to economizing problems include a) economic growth; b)
improve the use of resources; and c) reduce expectations.

POST-TEST
Part I TRUE or FALSE
Directions: Please write TRUE if the statement is correct and FALSE if the statement is incorrect.
TRUE 1. Scarcity in goods and services happens if the resources in the production are inadequate or
scarce.
TRUE 2. Customers must choose among several alternatives if scarcity exists.
FALSE 3. Income inequality is the gap in income that exists between the rich and the poor
customers willing to buy the same products.
TRUE Shortage of goods and services is an economic problem; and shortages are always constant
TRUE 5. The Build Build Build Program by the government aims to help improve the infrastructure
projects and other programs of the country.

Part II Multiple Choice. Choose the letter of the correct answer.

1. The fundamental economic problem that must be solved efficiently
A.
2. Economists point out that scarcity must be addressed to protect the
B.
3. What two factors contribute to scarcity in the production of goods and services?
C.
4. If there is scarcity in public transportation, what should the learners do?
A.
5. The economists describe the amount of resources in an economy as: a) Always constant b) Can
never decrease or increase c) Unlimited at any moment in time
D.
REFLECTIVE LEARNING SHEET
Regardless of your economic status. Which is more important to you, health or unlimited supply for
your wants?

Choosing between health or unlimited supply for my wants, I will choose health.
Health is a type of need of an individual, in other terms, it is a big part of the survival of
human. Without health, we would not be able to enjoy or even pursue to get what we want,
because we would not have enough energy to move. Just like the old saying say “health is
wealth”, therefore having poor health is like being poor financially. It is in the matter of
being physically and mentally able to work and strive, in order to get the things that we
want. Hence, it is striking two birds at once, I will be getting the health I chose and I will be
having the opportunity to pursue my wants.

1. Land - space
2. Labor –manpower
3. Capital –computers
4. Entrepreneurship- great
ideas