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Q1W3 Applied Economics - Localized
Q1W3 Applied Economics - Localized
OUTCOME-BASED EDUCATION
LEARNING QUARTER I
MODULE WEEK
3
APPLIED ECONOMICS
QUARTER I
WEEK 3
Development Team
Writer: Mary Grace L. Santos
Management Team:
Important Reminder
DO NOT WRITE ANYTHING IN THIS MODULE. This module is a government
property and other learners will use it again. You may use any clean sheet of paper that is
available in your home for your answers in the given activities. The rubrics and answer key
for the activities are found in the latter page of this module for you to self-check your answers.
This module will be retrieved by the end of the week.
This is to test your prior knowledge on the given lesson. Copy the graph below. Analyze the
graph and answer the questions below. Write it in any clean sheet of paper and label it as
WHAT I KNOW.
GRAPH ANALYSIS
source:https://www.google.com/search?q=equilibrium+graph&tbm=isch&ved=2ahUKEwiF_snyro3rAhW5yIsBHbqlDYMQ2-
cCegQIABAA&oq=equilibrium+graph&gs
a. Locate the equilibrium point on the demand and supply. Put a point on the graph.
b. If the price is above the equilibrium point what could you predict with the demand and
supply?
c. If below the equilibrium point what could you predict with the demand and supply?
WHAT’S IN
WHAT IS IT
INTRODUCTION
Economics helps us solve the problem on excess supply and excess demand, and
lead it to a balanced supply and demand. In our needs, we do not want oversupply. It means
wastage of income. For entrepreneurs, it is not efficient if their stocks or supplies are greater
than the actual demand. It is a loss not revenue.
In economics, there are terms that you must learn to understand the better market
situations. A demand or the amount of good or service consumers are willing to purchase at
each price. If customers cannot pay for it, there is no effective demand. Price is what a buyer
pays for a unit of the specific good or service. The total number of units purchased at that price
is called the quantity demanded.
If all other factors remain equal, the higher the price of a good, the fewer people will
demand that good. “the higher the price, the lower the quantity demanded” and vice
versa.
The amount of a good that buyers purchase at a higher price is fewer because as the
price of good goes up, the opportunity cost of buying the good also is less. Consumers will
avoid buying a product.
For example, if the price of video game drops, the demand for games may increase as
more people want the games.
The demand curve is always downward sloping due to the law of diminishing
marginal utility.
The law of supply demonstrates the quantities that will be sold at a given price.
The higher the price, the higher the quantity supplied and vice versa. Producers supply more
at a higher price because selling at higher quantity at a higher price increases revenue.
When graphing the supply vs. the price, the slope rises.
Source: https://www.investopedia.com/terms/d/supply-curve.asp
Source:https://fee.org/articles/the-law-of-supply-and demand/
Equilibrium price or market-clearing price. is the price at which the producer can
sell all the units he wants to produce and the buyer can buy all the units he wants.
sufficient to induce suppliers to bring to market that same quantity of goods that
Our case today can be compared to our topic. Let us understand that everything has
limitations in our consumption- our basic needs like food, shelter and water. Even our
consumption on the mode of transportation has limitation.
The challenge to us, consumers, is how we make use of our imitative, and utilize our
income to satisfy our demands at the most affordable prices; for the sellers to supply the needs
of the consumers while making profit; for the government to legislate the economy while
helping all the agents and to protect the monetary and fiscal transactions.
As a consumer, how can you sustain your needs (basic commodities) despite the
challenges in increased price of these items in the market?
WHAT’S MORE
1. Under the dowry system in India, a market with more women seeking
partners, the trade shift favors the men. What law or economic principle
is applicable?
2. In the same system, men with better jobs receive larger payments. What
economic principle is applicable to this situation? Justify your answer.
3. State the law of demand.
4. State the law of supply.
Qd
Qd
1.2) Analyze data and describe the curve. Interpret the results.
Qd
b. How much is the price in the equilibrium point? Present your solution.
The law of demand states that a higher price typically leads to a lower quantity demanded.
A supply curve shows the relationship between quantity supplied and price on a graph.
The law of supply says that a higher price typically leads to a higher quantity supplied.
The equilibrium price and equilibrium quantity occur where the supply and demand
curves cross.
The equilibrium occurs where the quantity demanded is equal to the quantity supplied.
If the price is below the equilibrium level, then the quantity demanded will exceed the
quantity supplied.
Excess demand or a shortage will exist. If the price is above the equilibrium level, then
the quantity supplied will exceed the quantity demanded
4. A shift in a demand or supply curve occurs when a good's quantity demanded or supplied
changes even though price remains _____________________________.
ASSESSMENT
________1. The upward slope of the supply curve illustrates the law of demand—
―higher price leads to a higher quantity supplied, and vice versa.
________2. The downward slope of the demand curve illustrates the law of
supply—the inverse relationship between prices and quantity demanded.
________5. The law of supply says that ―at higher prices, sellers will supply more
of economic goods‖
10. If Toyota firm is producing a car faster than people want to buy, there is
a. an excess supply of car and price can be expected to decrease.
b. an excess supply of car and price can be expected to increase.
c. an excess demand of car and price can be expected to decrease.
d. an excess demand and price can be expected to increase.
WHAT I KNOW
B. Oversupply/surpuls- the
quantity supplied is greater
A.
that the quantity demanded.
C. Shortage/scarcity- the
quantity supplied is less that
the quantity demanded.
WHAT’S IN
1. The Law of Demand
2. The Law of Supply
WHAT’S MORE
1. The law of demand - According to the model above, ―Supply, Demand and Marriage
excess demand for grooms should have caused the terms of courtship to shift in favor of
men. Economics teaches us that when there is excess demand for a good,its price
rises.
2. The law of supply - Men with better jobs would receive larger payments. This can be
compared to the supply of product at a given price. ―As the price of a product
increases, companies will produce more of the product.
3. The law of demand – the higher the price, the lower the quantity demanded & vice
versa.
4. The law of supply – the higher the price, the higher the quantity supplied” & vice versa.
Sources: https://opentextbc.ca/principlesofeconomics/chapter/
WHAT I CAN DO
1. The Laws of Supply and Demand
2. The Law of Supply
3. Curve
4. Constant
5. Equilibrium
6. The Law of Demand
REFERENCES: