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Applied Economics  
 
 
 
 Quarter 3 – Module 1:
 Economics as a Social Science
 
 Introductory Message:

This learning module is a collaborative effort between the institution, Ganaan

Christian Academy and the teachers. It aims to provide students meaningful and
effective learning amidst this difficult time. This module is self- paced and self-
explanatory, the instructions given in each part of this module are clear and concise.
 
This is what we consider a “handiwork,” it is done from the heart through the
hands of the teachers. We would like to encourage you to go through with this module
chronologically and comprehensively. Please feel free to message us for feedback. May
you be guided by our Almighty Father as you go through with this module. Enjoy your
journey!
 For the Students
Read and follow each instruction carefully. Understand the content of this module
comprehensively. Any following activities in this module shall be answered with honesty
and integrity. Write your answer on a notebook intended only for this subject. Follow the
instruction and perform all the activities of this module.
 
 
 

For the Facilitator/ Parent

Read and follow each instruction carefully. Make sure that there is a learning
space at home provided for your assigned student/ child to work on. At most, each
module should be done during the scheduled time of the subject and may be extended
as necessary. The role of the facilitator or the parent is to clarify any content that
requires further guidance and explanation. Let your assigned student/ child write the
answers on a Notebook intended only for this subject. Let your assigned student/ child
read the lessons included in this module comprehensively. Let your assigned student/
child do or perform all the activities set in this module and follow instructions properly.
 
 
 
 
 Introduction
The Applied Econonmics attempts to inform and establish the ABM Strand as an important aspect of SHS curriculum.
This provides upright guidelines for the career and life choices in economics.

This module consists information to guide students of the definition of economics and how it is applied in social science.
The students are expected to understand the concept in social perspective and differentiate good and bad economic acts.
 The Most Essential Learning Competencies: 
● Differentiate economics as social science and applied science in terms of nature and scope 

 This module includes lessons such as: 

● Revisiting Economic as a Social Science
● Adam Smith, the First Economist
 
After going through this module, students will:
1. Define economics
2. Explain the concept of scarce resources
3. Identify the four factors of production
4. Relate opportunity cost with the different financial activites; and
5. Differentiate between good and bad economic good
 Lesson Proper
Note: Answer each questions provided in the
following random slides.
Revisiting Economics
as a
Social Science
 What is Economics?

Is the study of allocation of scarce resources (human or non human) and allow
alternative uses to satisfy the needs and wants

2 important concepts of economics: scarcity and choice

Example of scarce resource:

We all need transportation to travel from location A to location B thus we need more modes of
transportation aside from jeepneys.
On this note, economics gives choices that scarcity requires us to make – and what we give up
when we make those choices. This distinguishes economics from other social sciences.

Activity: Cite a scenario where you experienced scarcity of a product or service and
what was the alternative choice you made?
Scarcity, Choice, and Trade-offs
Goods – are physical objects such as shoes and computers or for consumption

Services – are work done for people such as shoe repair and computer maintenance

Scarcity – is a situation in which people cannot have everything that they want because of
limited resources

Resources – are the most basic elements that people use to produce the goods and
services that they want
Trade-offs – situations when people have to choose between two things ( activities ) that
cannot be had or done at the same time.
 Scenario:
Higher Electricity Cost or No Electricity at All?

Most people want electricity to be available all the time and they want lower electricity cost, too. The Philippine
government is facing worsening electric power problem and many parts of the country is experiencing blackouts.
Thus government has to make a difficult choice and look at measures that will help carry the electricity load during
peak hours but would make electric power pay more per kilowatt hour. This is unlikely to be welcomed by customers.

Question:
Something is “free” for you if you can have it without giving up some of your money or your time. Suppose that
walking to school, you noticed a table with hamburger and soft drink and a sign that reads: “Free lunch here
today.” But you remember your economics teacher saying that while you might not have to pay for a lunch,
“there is no such thing as a free lunch.” Why is the offered lunch not free for you?
Who is the First Economist?

ADAM SMITH
Is the father of economics. He is an English professor who served
as the chief Bureau of Customs, England. He was a well-traveled
man, tutoring the royalty of his time. He conceived a lot of rules,
using the French phrase, laissez-faire, for free enterprise and the
word entrepreneur for the skill necessary to bring the factors of
production into a coherent whole.
 
  The works of Adam, and his contemporaries, fall under the
  emphasis where there is less government intervention.
  Government action is limited to:
  - Police power
- Infrastructure development
 
- Entering into treaties with other governments; and
  - Collection of taxes
 Concept of Scarce Resources
Concept of the Factors of Production:

1. Land
- Used as space to create the products or services to satisfy the wants and needs, and the basic resources within land, sea, and air

2. Labor
- Karl Marx considered this as ultimate production factor
- Nothing gets converted to product or service without labor

3. Capital
- has 2 categories ( human and financial )
 Physical – factory buildings, machines, equipment
 Financial –interest or rent

4. Entrepreneurial ability
-a necessary skill to mix the other three factors
- Can identify the unmet need and combine three factors to supply product or services to satisfy needs and wants.
Scarcity and the Application of Economics
1. Economics provides you with tools for understanding the world around you and
for making sense of the daily news
(In many countries, Internet technology are expanding businesses compared to traditional retailers. Economics helps you
understand the choices consumers make and how their decision to shop online and make purchase over the internet)

2. Economics can help you predict the likely effect of events and government
actions
( At present, more and more consumers are deciding to make their purchase over the internet. We can use economics to
predict what is likely to happen over the next decade in terms of trading and government actions)

3. The lessons in economics can be used as a guide making personal and business
decisions, as well as decisions about matters that concern society as a whole
(whenever there is limited resources – be it your time, money, etc. decisions have to be made about how to use that
resource. If there is scarcity of your resource, you use economics to choose an alternative way instead of using what
is scarce.)
Branches of Economics

Microeconomics (small) Macroeconomics(large)

Close-up view Overall view

Analyzes INDIVIDUAL parts of an Looks at the TOTAL output

economy

Sees the total status of the economy

Analyzes specific market e.g., total employment status
Inflation rate, etc.
Opportunity Cost

You currently have P20 in your pocket. Suppose you wanted to eat taho and ice cream but
each cost P20. Both can be bought for P40.

If you buy the taho, the ice cream is your opportunity cost. It is the one that was given up.
If one chooses to buy ice cream, the taho is the opportunity cost.Due to limited resources of
money, you have to choose the alternative and the other choice becomes the opportunity cost.
Goods and “the Bads”
Goods and “the Bads”

Producing products or services are beneficial to consumers, and as shown in the

previous slide some service or product both benefit the customers.

The “bads” can also be created with this invisible hand. Say you have a factory that
creates good and service, but it pollutes the river due to water discharge and as well as
contaminates the air.

These are referred as the “bads” that economist are studying as to how it heavily affects
the communities.
 Module 1: Exercise 1
Problems and Application
 
 
 
Instruction: Answer the following in your notebook or in MS word. Send a picture format thru an online app.
 
 
A. How much did you spend on the last item you bought for yourself? What other things could you have bought with
the same amount of money? Why didn’t you buy the other items you just listed?  
 
B. How much time have you spent reading this module? What else could you have done with the time spent reading
this module? Why didn’t you do other things you just listed?

C. How is the preparation of a family budget an exercise in dealing with scarcity? What adjustments do you think
your parents would make if your family income decreased by 25 percent? By 50 percent?

D. Think of a recent case in which a decision made by the Philippine government was constrained by the scarcity of
resources. Describe the trade-offs that were involved.
 Module 1: Exercise 1
Problems and Application

E. Look at today’s newspaper. What is the leading economic business news story? List the microeconomic and/or
macroeconomic questions the story deals with. What trade-off does the story imply?

*Deadline: February 17 before 12 midnight

For submission earlier than Friday, February 17; 10 points will be added from final score
*excess point beyond perfect score will be added on the next activities or exercises.

For late submission 10 points will be deducted from final score

References:  
Books:  
Carnaje, Gideon. Applied Economics. Revised Ed. Vibal Group Inc., 2019.  
 
Caoile, Patrick. Applied Economics.The Phoenix Publishing House., 2017.
 
 
Sites:  
Department of Education. “Most Essential Learning Competencies.”

https://commons.deped.gov.ph/K-to-12-MELCS-with-CG-Codes.pdf

https://image.slidesharecdn.com/capitalism-and-markets2832/95/capitalism-and-markets-28-728.jpg?cb=1190305241