IN T R O D U C T IO N O N

I E D E C O N O M I C S
APPL
GRADE 12 - ABM
Learning Targets:
 Differentiate economics as social science and
applied science in terms of nature and scope; and

 Examine the utility and applications of applied

economics to solve economic issues and problems.
 What is Economics?
Is the study of the ways that individuals and societies
allocate their limited resources to satisfy their unlimited
wants.
SCARCITY
Is the limited availability of a commodity,
which may be in demand in the market
or by the consumers. Also included
an individual’s lack of resources to
buy commodities.
Economics as a Social
Science Psychology

 Studies human behavior.

Sociology

 Studies how individuals make choices in allocating

scarce resources to satisfy their unlimited wants.
Economics as a Applied Science

 Help students to learn about the relationship of

a business and basic economic theories.

 focuses on urban problems, the health-care crisis,

agricultural problems, poverty, economic growth and
the environment.
Basic Economic Problems

What to For whom to

produce? produce?

How to
produce?
Basic Economic Problem of the Country

 Unemployment
 Poverty
 Poor quality of Infrastructure

 Income Inequality
UNEMPLOYMENT
 is a term referring to individuals who are
employable and actively seeking a job but
are unable to find a job
POVERTY
 Is said to exist when people lack the
means to satisfy their basic needs
including food, clothing and shelter.
 POOR QUALITY OF
INFRASTRUCTURE
 Insufficient facilities for entrepreneurs
available on the market for the efficient
use of profit.
 INCOME INEQUALITY
INCOME
 Is the money that an individual earned from
work or business received from investments.
INCOME INEQUALITY
 refers to the size of the gap between the
richest and poorest members of society- the
wider gap, the greater the inequality.
Productive Resources
Productive resources or
factors of production, are the
inputs used to produce the
goods and services that
people want.
Three Board
Categories of
Productive
Resources
1.HUMAN RESOURCES
 Is the board category of human
efforts, both physical and
mental, used to produce goods
and services
LABOR
Is the physical and mental
effort used to produce goods
and services
ENTREPRENEUR
Human resources also
include the special skills of
an entrepreneur, who tries to
earn profit by developing a
new product or finding a
better way to produce an
existing one.
2.NATURAL RESOURCES
Are so- called “gifts of
nature”. They include
land, forests, minerals,
oils reserves, bodies of
water, and even animals.
RENEWABLE RESOURCES
 Is a natural resource which replenish
to replace he portion depleted by usage
and consumption, either through
natural reproduction or other recurring
processes in finite amount of time in a
human time scale.
EXHAUSTIBLE RESOURCES 
 Is a natural resource that
cannot be readily replaced
by natural means at a
quick enough to keep up
with consumption.
Example: coal, petroleum,
metal ores, fossil fuels, natural
gas.
3.CAPITAL GOODS
Include all human
creations used to
produce goods and
services.
 GOODS AND SERVICES
GOODS
 an item you can see, feel, and touch
that requires scarce resources to
produce and satisfies human wants.
 Can be consumed.

SERVICES
 Something not physical that requires
scarce resources to produce and
satisfies human wants.
 Is intangible.
 ACTIVITIES:
I. Answer the following questions:
1. What is the central problem you face when you make economic
choices?
2. What are examples of productive resources you use in your life?
II. Identify the given statement whether it is a Human Resources, Natural
Resources or Capital Goods.
__________a. Cab Driver __________f. Bodies of water
__________b. Minerals __________g. Barrel of oil
__________c. Coal __________h. Airports
__________d. Entrepreneur __________i. Teacher
__________e. Highways __________j. Brain Surgeon
III. How
  can you tell whether the food you eat from your refrigerator is
scarce?
 REQUIREMENTS:
• A notebook designed for
Applied Economics only. Write
your complete name and your
grade level and strand.

• Use black or blue ballpen only