Republic of the Philippines

Department of Education
Region XII
Division of Cotabato
DALAPITAN HIGH SCHOOL
Dalapitan, Matalam, Cotabato

Learning Activity Sheet in Applied Economics

Name: _________________________________________Grade/Section: __________________________

Subject: _______________________________________ Score: _________
Lesson: Quarter 3 Week 1 LAS 1
Activity Title/ Topic: Introduction to Applied Economics
Learning Target: 1. Define basic terms in applied economics.
Code: (ABM_AE12-Ia-d-1)
Reference: Applied Economics - Senior High School Alternative Delivery Mode First Edition, 2020

LAS Modifier: JECLYN D. FILIPINAS

To better comprehend the basic or technical principles and fundamentals in the study of economics, it is essential
to particularly familiarize the following terms and their corresponding definitions as used in this study.
TERM DEFINITION
Applied economics. The application of economic theory and econometrics in specific
settings with the goal of analyzing potential outcomes.
Demand schedule Reflects the quantities of goods and services demanded at different prices.
Economics Social science which deals with the allocation of scarce resources to
satisfy the unlimited human wants.
Economic resources Also known as factors of production, are the resources used to produce
goods and services.
Economic system The framework in which a society decides on its economic problems
Equilibrium price Condition of balance or equality
Law of Demand The quantity of a commodity which buyers will buy at a given time and place
will vary inversely with the price.
Law of Supply The quantity offered for sale will vary directly with prices. Macroeconomics
The branch of Economics that studies the economy as a whole, also known as National Income Analysis
Market Is a place where buyers and sellers interact with each other and that
exchange takes place among them.
Microeconomics The branch of Economics that deals with parts of the economy such as the
household and the business firm. It is also known as Price Theory.
Monopolistic competition Imperfectly competitive market wherein products are differentiated and
entry and exit are easy.
Monopoly When a single firm that sells in that market has no close substitutes.
Oligopoly Market dominated by a small number of strategically interacting firms.
Perfect competition Implies an ideal situation for the buyers and sellers.
Scarcity Is a condition where there are insufficient resources to satisfy all the needs
and wants of a population.
Supply schedule Shows the different quantities that are offered for sale at various
prices.
Exercises:

Activity 1.1. Think and Write

Please recall any Economic Terms you encounter or learn from your previous studies or personal knowledge in the
past? Please write some of those below before you answer the questions that follow.

1.___________________

2.____________________

3.___________________

4. ___________________

5. ___________________

Performance Task:

1. Where do you usually apply those terms in your daily life?

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

1. In Philippine economy, what is the significance of those terms?

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

You might ask, “why do we need to study economics?” Well, to know how important, the subject is, all you need to do
is read the front page of newspapers to realize that the most important news are economic in nature. Watch the news
on TV, and for sure, important news always presents economic issues.

Hence, dealing with the study of economics is interesting since the issues to be tackled and resolved in this subject,
affect us all. After all, media commentators, politicians, and even barbers and taxi driver knowingly or unknowingly
talk about economic issues. They all need to understand how to make more rational decisions in spending money,
saving part of it, and even investing some of it.

On the national level, economics will enable you to take a look on how the economy operates and how effective are
government officials and policy makers in trying to shape up the economy and formulate policies for the good of the
nation.

Modified to:

Applied Economics - Senior High School Alternative Delivery Mode First Edition, 2020

Prepared by: Noted by: Monitored by:

JECLYN D. FILIPINAS SANTOS A. SAMBRANO __________________

Teacher-2 Principal-1 PSDS/EPS
 Republic of the Philippines
Department of Education
Region XII
Division of Cotabato
DALAPITAN HIGH SCHOOL
Dalapitan, Matalam, Cotabato

Learning Activity Sheet in Applied Economics

Name: _________________________________________Grade/Section: __________________________

Subject: _______________________________________ Score: _________
Lesson: Quarter 3 Week 2-4 LAS 2
Activity Title/ Topic: ECONOMICS AS A SOCIAL AND APPLIED SCIENCE
Learning Target: 1.Identify the basic economic problem of the country. (ABM_AE12-Ia-d-2)
Explain how applied economics can be used to solve economic
problems (ABM_AE12-Ia-d-3);
Reference: Applied Economics - Senior High School Alternative Delivery Mode First Edition, 2020

LAS Modifier: JECLYN D. FILIPINAS

CONCEPT NOTES:
Economics is regarded as a social science because it uses scientific methods to build theories that can help explain the
behavior of individuals, groups and organizations. It is related to other social sciences studies like for example: a. History-
because the modern system of economics developed over a period of time in the past; b. Political Science-because
government and laws interact with the economic forces in the society; and c. Sociology-because of its emphasis on social life.
We need social sciences concepts in resolving actual human problems. Economics as an Applied Science, therefore does not
only study economics itself but also help us understand pecuniary problems involving the family issues, along with the local,
national, or international communities concerns, and on how to possibly help resolve recognized economic problems for the
common good. Realizing the impact of applied economics to our daily lives, we may be able to identify problems besetting
Philippine society and optimistically find solutions by using economic principles.
Basic economic problems of society (ex. Philippines) have to be identified and recognized to cope with constraints and
limitations including the following:
a. What to produce and how much-the Philippines government is concerned with what goods or services should be
produced in the economy
b. ; b. How to produce-what production method that will be used to produce goods and services; and
c. c. For whom to produce- deals with the importance of determining markets of the products being produce.
.
EXERCIES:

Direction: Rank the economic problems cited below from 1 to 5, where 1 is the greatest and 5 is theless problem that you think
need attention by the government.

____ hunger _____poverty ____booming population ____ unemployment ____ corruption

Economics as a Social and Applied Science

Economics is a social science which deals with the proper allocation of scarce resources to satisfy the unlimited human wants.
Economics is classified as a social science because it deals with the study of man’s life and how he lives with other men.

Obviously, economics is interdependent with other sciences like sociology, political science, geography, religion and other social
sciences. As a social science, economics studies how individuals make choices in allocating scarce resources to satisfy their
unlimited wants.

Scarcity is the reason why people have to practice economics. Part of human behavior is the tendency of man to want and to
have as many goods and services as he can. Scarcity is that fact of life which makes man’s material wants never fully satisfied
because the resources he has are limited while his wants are almost unlimited. However, his ability to buy goods and services is
limited by his income and purchasing power. It is therefore in this context that man has to practice economics.

From the resources point of view, some would define economics as the study of the efficient allocation of scarce resources. Since
resources are generally scarce while human wants tend to be unlimited, economics encounters not a few problems. The root
problem, which is the real problem, is the unjust distribution of productive resources among the members of the society. The
fundamental problem of unfair allocation of resources has been a global problem. There are extremely very few rich while there
are very many poor.

Thus, in a broad sense, economics can be defined as a social science that studies and seeks to allocate scarce human and non-
human resources among their alternative uses in order to satisfy unlimited human wants and desires.
The Economic Resources

Our economic resources are also known as factors of production or inputs. There are five major factors of production, which are
utilized in our economy. These are land, labor, capital, entrepreneur, and foreign exchange.

1. Land - These resources consist of free gifts of nature which includes all natural resources above, on, and below the ground
such as soil, rivers, lakes, oceans, forests, mountains, mineral resources and climate. Land is considered economic resources
because it has a price attached to it. One cannot utilize this natural resource without paying for it usually in the form of rent or
lease.

2. Labor - This is also termed as human resources. Labor refers to all human efforts, be it mental or physical, that help to
produce want satisfying goods and services. This applies not only to workers, farmers or laborers, but also to professionals like
accountants, economists or scientists. Labor is an indispensable factor in the production of goods and services. In return, he
earns an income in the form of wages and/or salaries.

3. Capital - It is a finished product, which is used to produce goods. It consists of all man-made aids to further the production
process such as tools, machinery and buildings. Capital also serves as an investment. Income derived from capital is interest.

4. Entrepreneur - An entrepreneur is the organizer and coordinator of the other factors of production: land, labor, and capital. An
entrepreneur is one who is engaged in economic undertakings and provides society with goods and services it needs. He utilizes
his initiative, talent and resourcefulness in the creation of economic goods. He is able to compensate himself through the
acquisition of profits.

5. Foreign Exchange - This refers to the dollar and dollar reserves that the economy has. This is mostly affecting the national
economy in terms of import and export transactions, and in the case of Philippine Overseas Filipino Workers (OFW), is affecting
their remittances of money to their families back home.

Branches of Economics

The study of Economics is divided into two branches: Microeconomics and Macroeconomics.

1. Microeconomics - It deals with the economic behavior of individual units such as the consumers, firms, and the owners of the
factors of production. Such specific economic units constitute a very small segment of the whole economy. For example, the price
of rice, the number of workers of a certain firm, the income of Mr. Cruz, the expenditures of PLDT, etc. Microeconomics is also
known as the Price Theory.

2. Macroeconomics - It deals with the economic behavior of the whole economy or its aggregates such as government,
business and households. An aggregate is composed of individual units. The operation of the various aggregates and their
interrelationship is analyzed to provide a profile of the economy as a whole.

Macroeconomics is concerned with the discussion of topics like gross national product, level of employment, national income,
general level of prices, total expenditures, etc. It is also known as employment and income analysis.

The Basic Economic Problems

All societies are faced with basic questions in the economy that have to be answered in order to cope with constraints and
limitations. These are:

1. What to Produce? - First of all, the system must determine the desires of the people. Goods and services to be produced are
based on the needs of the consumers. However, there are some factors that should be taken into consideration in producing the
goods and services the individuals need. These are: 1. Availability of resources; 2. Physical environment; and 3. Customs and
traditions of the people.

2. How much to Produce? - Knowing what to produce is not enough. The system must know how much of the chosen goods
should be produced. It must determine how many of these buyers are willing to buy the goods and services produced by the
economy. Here, the people’s taste and preference plays a major factor in determining production.

3. How to Produce? - When producing goods and services, one has to think of how best to do it. The best way to make goods is
not to spend too much. This also means you have to make goods with quality. To make goods like these, one has to know the
best way of making goods. You have to choose the cheapest way. But this way must also let you make something with good
quality.

4. For Whom Shall Goods and Services Produced? - The last question has something to do with the problem of distribution.
Once the goods are produced, how shall they be distributed. Thinking about this problem means asking, “Who gets what?” on a
bigger scale. In this case, this means whatever is being sold can be bought. But only those who have money and who want it can
buy what is being sold. The poor cannot buy the same goods and services as rich people. When you have money, you have
purchasing power. It means, you have the power to buy things.
PERFORMANCE TASK

Activity 1: Word Search. Identify the word or terminology described in each number below. Write ypur answer before the number.

1. __________ is the social science that involves the use of scarce resources to satisfy unlimited wants.

2. Economic resources, also known as factors of __________, are the resources used to produce goods and services.

3. __________ is a condition where there are insufficient resources to satisfy all the needs and wants of a population.

4. __________ is a physical and human effort exerted in production.

5. Capital is a man-made resource used in the production of goods and services, which include machineries and equipment. The
owner of capital earns an income called _______________.

6. __________ is the authoritative system wherein decision-making is centralized in the government or a planning committee.

7. Soil and natural ___________ that are found in nature and are not manmade.

8. __________ economics is the application of economic theory and econometric in specific settings with the goal of analyzing
potential outcomes.

9. An __________ is the organizer and coordinator of the other factors of production.

10. ______________ deals with the economic behavior of individual units such as the consumers, firms, and the owners of the
factors of production.

Activity 1.2: Check Your Understanding

1. Why is economics a study of social science?

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

2. Why economics is deeply rooted in the concept of scarcity? How can you relate scarcity as a Senior High School student?

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

Prepared by: Noted by: Monitored by:

JECLYN D. FILIPINAS SANTOS A. SAMBRANO __________________

Teacher-2 Principal-1 PSDS/EPS
 Republic of the Philippines
Department of Education
Region XII
Division of Cotabato
DALAPITAN HIGH SCHOOL
Dalapitan, Matalam, Cotabato

Learning Activity Sheet in Applied Economics

Name: _________________________________________Grade/Section: __________________________

Subject: _______________________________________ Score: _________
Lesson: Quarter 3 Week 5-6 LAS 3
Activity Title/ Topic: Basic Economic Problems and the Philippine
Learning Target: 1. Explain the law of supply and demand, and how equilibrium price and quantity are determined (ABM_AE12-Ie-h-4);

2. Discuss and explain factors affecting demand and supply (ABM_AE12 Ie-h-5);
3. Compare the prices of commodities and analyze the impact on consumers (ABM_AE12-Ie-h-6)
Reference: Applied Economics - Senior High School Alternative Delivery Mode First Edition, 2020
LAS Writer: JECLYN D. FILIPINAS

Socioeconomic Development in the 21st Century

A solid understanding of economic principles and how they are applied in real-life situations can serve as significant tools to help address the
country’s economic problem.
To understand the basic economic problems, imagine two countries, one of them rich and the other poor. Do they have the same economic
problems? The answer is yes, but it is not that simple. There is a difference.
The rich country can solve problems easier. They can solve problems faster. They do not have to worry about basic problems. But for poor
countries, finding food for daily living is in itself a problem. They have a hard time finding shelter, clothing, health services, or even education.
Another reason why even rich nations have economic problems is because of the way human beings act. Human nature means an endless list
of wants. But there are not enough things to give us what we want. Even rich nations cannot escape human nature and limited resources.
Applied Economics in Relation to Philippine Economic Problems
The Philippine economy has grown significantly during President Benigno Simeon Aquino’s administration. With a growth rate of the country’s
Gross Domestic Product of 6.8% in 2012, improving to 7.2% in 2013, and slowing down to 6.1% in 2014, these rates are an improvement of
past rates preceding President Aquino’s term. It is also higher than its Asian neighbors such as Malaysia, Thailand, South Korea, Hongkong,
India, and Indonesia (CIA World Factbook, 2013).
Despite this admirable growth, people, especially the poor, have been complaining of non-inclusive growth. Millions of Filipinos are claiming
they experience hunger or they still live below the poverty level.
Unemployment is still a main problem of the Philippine economy with an unemployment rate rose to 17.7 percent accounting to 7.3 million
unemployed Filipinos in the labor force in April 2020. According to the Philippine Statistics Authority, this is a record high in the unemployment
rate reflecting the effects of Corona virus disease 2019 (COVID-19) economic shutdown to the Philippine labor market.
Employment rate in April 2020 fell to 82.3 percent from 94.7 percent in January 2020. In April 2019, it is posted at 94.9 percent. This translates
to 33.8 million employed persons in April 2020 from 41.8 million in April 2019. All regions reported double-digit unemployment rates. The
highest unemployment rate was in Bangsamoro Autonomous Region in Muslim Mindanao (BARRM) at 29.8 percent. It is followed by Region III
(Central Luzon) and Cordillera Administrative Region (CAR) with unemployment rates recorded at 27.3 percent and 25.3 percent, respectively
(https://psa.gov.ph/content /employment-situation-april-2020).
Another significant socioeconomic problem in the country is poverty. According to the Philippine Statistics Authority, in the first semester of
2018, a family of five needed no less than P7,337, on average, to meet the family’s basic food needs for a month. On the other hand, no less
than P10,481, on average, was needed to meet both basic food and non-food needs of a family of five in a month. This amount is the poverty
threshold. These are 10.9 percent higher than the food and poverty thresholds from the first semester of 2015.
The booming population growth in the Philippines is another basic economic problem that can be connected to the issue of scarcity. When
population becomes too big, economic resources may no longer be enough to support the growing population. According to the 2014 census,
the Philippine population stood at 100 million. As of 2020, from World Population Review data, it has reached 110 million people. This is
apparently the reason why schoolrooms are not enough for the children who are of school age. This could also be an explanation why
government hospitals are crowded with sick people and maternity wards are full of women giving birth with hospital beds that are not enough to
accommodate them.
The country’s problems vary with times and circumstances. It is now a challenge for the students to observe and identify what these problems
are.

Activity 1:
 Making It Count! The Philippines has encountered many serious problems most of the time. In the table below, list down some of these
economic problems the country has encountered for this year. At the opposite side, give at least three possible solutions that you think will help
solve the problem you have listed at the right.

Economic Problems Possible Solutions

1. 1.

2.

3.

2. 1.

2.

3.

Activity 2:Think and Reflect

Directions: Make a reflection journal where you will write your answers to the following questions:

1. How do you assess our economy today? Is it underdeveloped? developing? or developed? Why?

2. What factors you think affect the recurrence of the country’s economic problem? As a student, how can you eliminate or minimize these
problems?

Activity 3: I Can Do This!

If you were to advise the President of the Philippines on how to address the issues on poverty and unemployment to improve the lives of the
Filipino people, what would you tell him and why?

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

PERFORMANCE TASK.
Drawing Out the Artist in You!

Create a poster showing a basic economic problem in your locality. To make a poster, you need white cartolina and some drawing and coloring
materials. The poster must look neat with labels that are readable and relevant.

Prepared by: Noted by: Monitored by:

JECLYN D. FILIPINAS SANTOS A. SAMBRANO __________________

Teacher-2 Principal-1 PSDS/EPS

Republic of the Philippines

Department of Education
Region XII
Division of Cotabato
DALAPITAN HIGH SCHOOL
Dalapitan, Matalam, Cotabato
 Learning Activity Sheet in Applied Economics

Name: _________________________________________Grade/Section: __________________________

Subject: _______________________________________ Score: _________
Lesson: Quarter 3 Week 7 LAS 4
Activity Title/ Topic: Basic Economic Problems and the Philippine
Learning Target: 4. Explain the law of supply and demand, and how equilibrium price and
quantity are determined (ABM_AE12-Ie-h-4);
5. Discuss and explain factors affecting demand and supply (ABM_AE12 Ie-h-5)
Reference: Applied Economics - Senior High School Alternative Delivery Mode First Edition, 2020
LAS Modifier: JECLYN D. FILIPINAS

Socioeconomic Development in the 21st Century

A solid understanding of economic principles and how they are applied in real-life situations can serve as significant tools to help
address the country’s economic problem.
To understand the basic economic problems, imagine two countries, one of them rich and the other poor. Do they have the same
economic problems? The answer is yes, but it is not that simple. There is a difference.
The rich country can solve problems easier. They can solve problems faster. They do not have to worry about basic problems. But for
poor countries, finding food for daily living is in itself a problem. They have a hard time finding shelter, clothing, health services, or even
education.
Another reason why even rich nations have economic problems is because of the way human beings act. Human nature means an
endless list of wants. But there are not enough things to give us what we want. Even rich nations cannot escape human nature and
limited resources.
Applied Economics in Relation to Philippine Economic Problems
The Philippine economy has grown significantly during President Benigno Simeon Aquino’s administration. With a growth rate of the
country’s Gross Domestic Product of 6.8% in 2012, improving to 7.2% in 2013, and slowing down to 6.1% in 2014, these rates are an
improvement of past rates preceding President Aquino’s term. It is also higher than its Asian neighbors such as Malaysia, Thailand, South
Korea, Hongkong, India, and Indonesia (CIA World Factbook, 2013).
Despite this admirable growth, people, especially the poor, have been complaining of non-inclusive growth. Millions of Filipinos are
claiming they experience hunger or they still live below the poverty level.
Unemployment is still a main problem of the Philippine economy with an unemployment rate rose to 17.7 percent accounting to 7.3
million unemployed Filipinos in the labor force in April 2020. According to the Philippine Statistics Authority, this is a record high in the
unemployment rate reflecting the effects of Corona virus disease 2019 (COVID-19) economic shutdown to the Philippine labor market.
Employment rate in April 2020 fell to 82.3 percent from 94.7 percent in January 2020. In April 2019, it is posted at 94.9 percent. This
translates to 33.8 million employed persons in April 2020 from 41.8 million in April 2019. All regions reported double-digit
unemployment rates. The highest unemployment rate was in Bangsamoro Autonomous Region in Muslim Mindanao (BARRM) at 29.8
percent. It is followed by Region III (Central Luzon) and Cordillera Administrative Region (CAR) with unemployment rates recorded at
27.319
percent and 25.3 percent, respectively (https://psa.gov.ph/content /employment-situation-april-2020).
Another significant socioeconomic problem in the country is poverty. According to the Philippine Statistics Authority, in the first
semester of 2018, a family of five needed no less than P7,337, on average, to meet the family’s basic food needs for a month. On the
other hand, no less than P10,481, on average, was needed to meet both basic food and non-food needs of a family of five in a month.
This amount is the poverty threshold. These are 10.9 percent higher than the food and poverty thresholds from the first semester of
2015.
The booming population growth in the Philippines is another basic economic problem that can be connected to the issue of scarcity.
When population becomes too big, economic resources may no longer be enough to support the growing population. According to the
2014 census, the Philippine population stood at 100 million. As of 2020, from World Population Review data, it has reached 110 million
people. This is apparently the reason why schoolrooms are not enough for the children who are of school age. This could also be an
explanation why government hospitals are crowded with sick people and maternity wards are full of women giving birth with hospital
beds that are not enough to accommodate them.
The country’s problems vary with times and circumstances. It is now a challenge for the students to observe and identify what these
problems are.

Activity 1.1. I Can Do This!

 If you were to advise the President of the Philippines on how to address the issues on poverty and unemployment to improve the
lives of the Filipino people, what would you tell him and why?

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________

Additional Activities

Activity 1.2 Drawing Out the Artist in You!

Create a poster showing a basic economic problem in your locality. To make a poster, you need white cartolina and some
drawing and coloring materials. The poster must look neat with labels that are readable and relevant.

Prepared by: Noted by: Monitored by:

JECLYN D. FILIPINAS SANTOS A. SAMBRANO __________________

Teacher-2 Principal-1 PSDS/EPS

Republic of the Philippines

Department of Education
Region XII
Division of Cotabato
DALAPITAN HIGH SCHOOL
Dalapitan, Matalam, Cotabato
 Learning Activity Sheet in Applied Economics

Name: _________________________________________Grade/Section: __________________________

Subject: _______________________________________ Score: _________
Lesson: Quarter 3 Week 6 LAS 4
Activity Title/ Topic: Utilizing Applied Economics
Learning Target: 1. Explain the law of supply and demand, and how equilibrium price and quantity are determined (ABM_AE12-Ie-h-4);

2. Discuss and explain factors affecting demand and supply (ABM_AE12 Ie-h-5);
3. Compare the prices of commodities and analyze the impact on consumers (ABM_AE12-Ie-h-6)
Reference: Applied Economics - Senior High School Alternative Delivery Mode First Edition, 2020
LAS Writer: JECLYN D. FILIPINAS

CONCEPT:

Have you ever asked who decides on the prices of the goods you buy? For many people, the answer is easy. They think the
government decides how high or low prices should be. But this is not always true. For example, the government may only
regulate the prices of rice, gasoline, and apartment rent. But the prices of most goods are determined by market price.

A market price is the price determined only by demand and supply. It also means that the government had little say about that
price. But what if the government decided on a price that is higher than the market price? Who would be affected? How will this
affect the demand and supply for that good or service?

In such a case, the sellers will be badly affected. Since people want lower priced goods, they will buy less. That means if the
price goes up, they will not buy as much. The sellers will have a lot of goods that people are not buying.

What about if the government mandate the sell of goods or services at a price lower than the market price? In this case,
remember that people want as much profit as possible. If the government decides on a price lower than what the market alone
would have allowed, will the sellers be happy? The answer is no. If people have to pay the sellers less for their goods, the sellers
will get less money.

In general, prices are decided upon by demand and supply. In this chapter, we are going to study the law of supply and demand.
It will also discuss the price structure and the role of government in the process.

Application of Demand and Supply

In an economy where prices are continuously rising, people have always wondered what factors cause prices to fluctuate. The
core of this lesson aims to show that demand and supply are the main forces that cause prices to increase or decrease. The
lesson also tries to explain why an increase in the price of a commodity will make consumers want to buy less of it and producers
want to sell more and why a price decrease will cause the opposite reaction.

Activity 1.2.1. Picture Analysis

Directions: Analyze the picture in answering the questions below:

1. How do you determine the prices of goods and services?

______________________________________________________________
______________________________________________________________
______________________________________________________________
2. What will happen if the prices of basic commodities will keep on increasing?
______________________________________________________________
______________________________________________________________
______________________________________________________________

3. Is there any effective way of keeping the prices of basic commodities at levels that are accessible to the
masses? ______________________________________________________________
______________________________________________________________
______________________________________________________________