Republic of the Philippines

Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OF QUEZON PROVINCE
QUEZON NATIONAL HIGH SCHOOL
M.L. Tagarao St., Ibabang Iyam, Lucena City

NAME: ___________________________________ DATE: ______________________

GRADE & SECTION: _________________________ TEACHER: Aloha C. Cantos
.
APPLIED ECONOMICS
Quarter 1 Week 1
Module 1 – Economics as Social Science
and Applied Science in Terms of Nature and Scope

What I Need to Know

This module was carefully prepared and designed for you to perform at your own pace.
Useful activities on the nature and scope of economics, its fields were provided for you to
accomplish which will allow self-discovery of the concept. These will also help develop your
creativity and critical thinking skills to make decisions independently. It is also expected that
upon accomplishing these activities, you can communicate confidently and collaborate with
other people to solve problems, intelligently. And most importantly, your character and initiative
to handle situations which you cannot control will be improved.
At the end of the session, you should be able to explain the nature and scope of economics,
determine its fields: the micro and macroeconomics, resourcefully use the different resources in
the production of goods and services, and in real world, efficiently consume these finished
products.

What I Know
Activity No. 1 Direction: Let us check your knowledge to our topic. Kindly arrange the
following words. These are the terms you commonly encounter when you make decisions of
going to the market. Examples of these items are given on the right column. Write your answers
on the line space provided.

1. MIRECOOCNOMSCI ________________________ individuals and industries

2. TENAGILBDSOOG __________________________ basic goods/commodities
3. SARCITYC __________________________________ shortage in supply
4. UXDOOSLUGYR ____________________________ expensive jewels and gems
5. CDAOTOASAGIP ____________________________ baking machines

Assessment

Direction: Kindly choose the letter of the correct answer. Encircle your answer.

1. The physical effort of the manpower to produce the protective devices of the frontliners
describes which factor of production?
a) Land c) Labor
b) Capital d) Entrepreneur
2. The great ideas, concepts and drive of the production managers to produce something new
describe which factor of production?
a) Land c) Labor
b) Capital d) Entrepreneur
3. The computers of the production manager in an office are what kind of goods or products?
 a) Consumer goods c) Capital Goods
b) Either consumer goods or capital goods d) Economic Goods

4. Which best describes economics as a social and an applied science?

a) The study of things we need to survive
b) The study of how people make choices when they are faced with an
unlimited supply of resources
c) The study of human behavior
d) The study of how buyers make choices when there is limited supply of
resources

5. Which of the following are examples of human needs?

a) Water and a place to live like houses c) Flat screen televisions
b) Iced caramel macchiato Frappuccino d) Laptops and computers

MODULE 1 NATURE AND SCOPE OF ECONOMICS

Let’s say, in conducting your research, you may consider studying the economic situation of
the families in Manila. For example, the GAS and ABM students may focus on the annual
income of families, buying behaviour in the market, on specific items commonly purchased
these families and many more. The HUMSS might take an overall view on the entire economic
system: what causes the families to limit their spending capabilities, what environmental factors
stresses them from purchasing their needs and wants; or what makes them satisfied in their
buying behavior. Both approaches are useful, and both examine the same, but the viewpoints
are different. In a similar way, both microeconomics and macroeconomics study the same
economy, but each has a different viewpoints.
Whether you are looking at the buying behaviour of the people in the market or economics,
the micro and the macro insights should blend with each other. In studying the buying behaviour
of the people, the micro insights about particular behaviour and spending habits of the people
help them understand the overall economic situation on individual matters, while the macro
insights about the overall economic situation on the entire economy which help to explain the
internal and external environments, as a whole.

What’s In

Like in your studies, we can make an assumption of our real situation. Today, the whole
world, including the Philippines, suffers from economic problem due to the existence of
worldwide COVID 19 Pandemic. Manila, in particular, is one of the most cities in the Philippines
being affected by the said Pandemic. We want to understand why such case happens and how
it affects the lives of everyone in the economy. An ordinary citizen could hardly understand what
is happening in the society if he does not have backgrounds in economics. Economics, as a
social and applied science will explain and help you understand what is really happening in the
economy.

Activity 1:

Direction: Let’s analyze the market environments of the society. Please encircle your
answer.
1. As a citizen of Manila, determine which is NOT TRUE of the economic activities that have
been observed in your locality:
a) Everyone has experienced buying limited supply of commodities
b) Everyone has inadequate supply of hygienic materials and protective devices
c) Some citizens have suffered from changes in the pandemic protocols of the government
d) The people in Manila have freely enjoyed traveling from one place to other.
2. Which of the following has NOT observed in the community during the ECQ in the same
locality?
a) Everyone enjoyed shopping in the market
b) Unemployment in the community was sharply experienced
c) Prices of commodities suddenly increased
d) The people in Manila were reluctant of the pandemic protocols.

What’s New

THE NATURE AND SCOPE OF ECONOMICS

According to Molina, J. A. & Nadal, G. J I (2020), economics is a SOCIAL SCIENCE

concerned with the explanation and prediction of observed phenomena in the society.
Economics studies the way in the societies solve the fundamental problems of reconciling the
unlimited desires of individuals with scarcity of resources, susceptible to numerous alternative
uses. Economics is also an APPLIED SCIENCE because it uses the scientific method in its
explanations, which consists of observing reality and presenting questions and problems to
arrive at the formulation of theories and models. As an applied science, it follows a systematic
procedure to solve issues and problems of the society.

What Is It

THE FIELDS OF ECONOMICS

Microeconomics and macroeconomics has perspectives on the economy.
*Microeconomics: focuses on the behavior of individual economic units and the
functioning of markets. Its perspective focuses on parts of the economy: individuals, firms, and
industries.
*Macroeconomics: studies the functioning of economics as an aggregate (production,
employment). Its perspective looks at the economy as a whole, focusing on goals like
production, the standard of living, unemployment and inflation. Macroeconomics has two types
of policies for pursuing these goals: monetary policy and fiscal policy.

Figure 1. Micro vs Macro Economics

Macroeconomics
Microeconomics *Studies the economy as a
*Studies of markets of good services whole
*Focuses of the behaviour of *Focuses on aggregate
individual in the market indicators (such as production,
*Explains how and why these units
make economic

The Economic Agents/Stakeholders

1. Consumers
• Consume goods and services /offer production factors
• Maximize utility
2. Producers
• Produce goods / demand productive factors
• Maximize profit 3. The public sectors
• Attempt to maximize the well-being of society

*The agents interact among themselves in a specific territorial, social, natural and/or cultural
framework that determines their relationships → Market

BASIC TERMS TO UNDERSTAND ECONOMICS

It is essential That you familiarize yourself with the study of economics. This will facilitate
your understanding of economic analysis. Specifically you meet GOODS- which yields to
your satisfaction. It is anything used to satisfy your wants and needs.

TANGIBLE GOODS-material INTANGIBLE GOODS – when they are in the

goods or commodities form of services. Those rendered by doctors,
engineers, and other professionals

Goods may also be classified according to use.

CONSUMERS GOODS – goods for the CAPITAL GOODS or INDUSTRIAL GOODS -
ultimate consumption of the consumers. Ex.: used in the production of other goods and
toothpaste, bath soap, etc. services. Ex.: buildings, machinery,
equipment.

ESSENTIAL GOODS- used to satisfy the LUXURY GOODS – goods man may do
basic needs of man Example: foods and without, but may give comfort and satisfaction.
medicine. Ex., perfume, cakes; chocolates, expensive
cars.

ECONOMIC GOODS – goods which are

useful and scarce; with value attached to them
and a price has to be paid for their use. If a
good is so abundant and it can satisfy
everyone’s needs without anybody paying for
it, then, that good is free. The air is free, but
the air from an aircon is an economic good.
Figure 2: Kinds of Goods
ECONOMIC RESOURCES OR FACTORS
In the article of Nowaczyk , J (2020) on Identifying the Factors of Production, he defined
economic resources as the factors of production for goods and services. The factors of
production are inputs combinations in the production of goods and services to make an
economic profit for the firms. These factors of production are land, labor, capital, and
entrepreneurship. Resources are limited in nature, but human wants and needs are unlimited,
thus, an efficient allocation of these resources or factors of production is a big challenge for
every economy. Economics also helps the entrepreneurs and the economy to allocate
resources in the production of supplies to meet the demands of the consumers.

Land as a Factor of Production Land - Labor as a Factor of Production

natural resources available to create supply Labor is the work done by people-
such as raw materials that comes from the education, skills, and motivation and
ground. It can be a nonrenewable resource; productivity. Productivity measures how much
commodities such as oil and gold; and each hour of worker time produces in output.
renewable resource, such as timber. Oil is a Workforce receives wage for his labor.
natural resource, but petroleum gas is a capital
good. Farmland is a natural resource, but a
shopping center is a capital good.

Capital as a Factor of Production Entrepreneurship as a factor of

Capital or capital goods are capital – the Production
money that companies used to buy resources; Entrepreneurship develops an idea into a
manmade objects like machinery, equipment, business. An entrepreneur combines the
and chemicals that are used in production. For other three factors of production to add to
example, capital goods include industrial and supply. The most successful entrepreneurs
commercial buildings. A commercial aircraft is are innovative and risk-takers. The income
example of a capital good. entrepreneurs earn is profits.

Figure 3: Resources of Production and Characteristics

Characteristics of Resources:
1.Scarcity: insufficient resources to supply all the desires and needs of individuals. In the
production of goods and services; there are issues that economics may encounter: these
include: for Land – inadequate land and natural resources; polluted areas; overcrowded spaces;
for Labor – unskilled workforce; mismatch of jobs; for capital - low quality of
equipment/machines; insufficient fund/capital; and for entrepreneurship – Inadequate training of
entrepreneurs; limited opportunity; scarcity of great ideas but many competitors in the market.
2.Multiple use: Resources can have more than one possible use. For example, a plot of land
can be used to plant coffee or to build a factory.
3.Partially replaceable: one resource can replace another in the production of a good or
service (e.g., replace manual labor with technology).

Scarce resources and unlimited desires Scarcity

Scarcity and alternative uses Choice
Choice Opportunity Cost

What’s More
CLASSIFICATION OF GOODS
Activity No. 1

Direction: Please perform independently. Pick all the goods and classify them accordingly.
Your mother went to the market to shop goods for the family. She purchased the following
goods. Canned goods; bread; sacks of rice; meat; vegetables; toothpaste; bath soaps;
perfumes; wrist watch; aircon to ventilate her store and coffeemaker for her store.

Consumer Good Luxury Goods

Industrial Goods Economic Goods

Essential Goods
ASSESSMENT (Picture Analysis)

Direction: Still, please do this independently.

The picture shows the different factors in the production of goods. This will help you become
creative in your analysis on the application of resources you need in the production of goods
that are most needed in the society. Please determine the resources.

See! Economics is a very interesting field to study. Your teacher is very much willing to
teach you more about it

What I Have Learned

Microeconomics and macroeconomics are two different perspectives on the

economy. The microeconomic perspective 1) studies the behavior of individual economic units;
2) studies the functioning of markets 3) focuses on parts of the economy: individuals, firms, and
industries. The macroeconomic perspective 1) looks at the economy as a whole and 2) focusing
on goals like productions; standard of living, unemployment, and inflation. Macroeconomics has
two types of policies for pursuing these goals: monetary policy and fiscal policy.
In the production of goods and services; there are factors that economics may
encounter: these include: land – inadequate land and natural resources; polluted areas;
overcrowded spaces; labor – unskilled workforce; mismatch of jobs; capital - low quality of
equipment/machines; insufficient fund/capital; and entrepreneurship – inadequate training of
entrepreneurs; limited opportunity; scarcity of great ideas but several competitors in the market.

 Economics has two fields: micro and macroeconomics. __________________ study

of markets of good and services and focuses on the behaviour of individual on
products and services in the market while_________________________ deals with
the study of the economy as a whole and focuses on aggregate indicators such as
_______________; ____________________; ___________________.
 The Classification of goods:
__________________;____________________;____________;______________

 There are four factors of production or the resources needed to produce products
and services:
________________;__________________;_______________;_____________.
 Needs and wants are __________________while resources are
____________________.

What I Need to Reflect

 Today, we are in a new normal way of living, a very different one from way we have lived
for several years. It’s because everyone has that fear of the COVID 19 that might cause us from
health and economic issues. Everyone, therefore, has to be very responsible in his behaviors in
the market; and become efficient in his consumption; friendly to the environment or the natural
resources as these may become scarce in the future. Everyone must become aware of the
micro and macro levels of the environment and contribute to the growth of our economy.

Did you find our topic enjoyable and interesting? Write something about. You May use the
box below.

WHAT I CAN DO
Activity 1 Direction: This chart represents the economic resources in the
production of goods and services by the ABM Computer Shop located in Manila. 1) Kindly
recognize each resource.
2) Give an example of each resource that the computer shop needs for the production of its
services. Choices are provided below.
Activity No 2
Direction: Determine which factor of production is needed in the following
problem
1. The ABM Manufacturing Co. hired a gardener. He uses a
lawn mower for landscaping. Which factor of production
would you consider this machine?

2. The owner of the company withdrew cash for the salaries of

the employees. Which factor of production would you
consider cash on hand?

3. The top manager of the firm said “the great ideas,

concepts and emotional determination of a person to
produce something that consumers want to buy” is very
important for the company. What factor of production
describes the ability to create great ideas?

4. The farmers planted pineapple cuttings in the vacant area

located in their locality. Which factor of production would
you consider a pineapple plantation?
NAME: ___________________________________ DATE: ______________________
GRADE & SECTION: _________________________ TEACHER: Aloha C. Cantos

Assessment (Multiple Choice)

Direction: Choose the letter of the correct answer. Encircle your
answer.
1. Mrs Nenita De Jesus purchased basic goods like vegetables and groceries for
the consumption of her family. These goods are:
a. Consumer goods c. Luxury Goods
b. Capital Goods d. Economic Goods
2. Mr. Dennis Elecanal purchased new car as a gift for his father’s birthday.
This good is
a. Consumer Good c. Capital Goods
b. Luxury Good d. Economic Goods
3. ABM Computer shop purchased additional 10 units of computer for the
business. These goods are called:
a. Consumers goods c. Capital Goods
b. Luxury Goods d. Economic Goods
4. Which is not considered as tangible good?
a. Cell phone c. Sack of rice
b. Mask d. Training service
5. Which is true about Economics as a social science?
a) Scarce resources and limited needs drive choice
b) Economics explains and predicts economic events
c) The scientific method is based on the normative analysis
d) Economic hypotheses lead directly to predictions
6. Which is true on the value of an economic theory in practice? It is determined by
a. how accurate the assumptions are.
b. how well the theory can be represented by a graph.
c. how well the theory can predict or explain.
d. how economical the model is.
7. Which of the following is the study of the aggregate economy studied as a
whole?
a. Mathematical economics c. Macroeconomics
b. Econometrics d. Microeconomics
8. Business ethics refers to any behavior by businesses that may
a. be illegal.
b. violate social or moral standards.
c. result in the maximization of profits.
d. All of the above.
9. Businesses have responded to incentives for ethical behavior by doing ALL
except
a. lobbying for the abolition of laws that require ethical behavior.
b. appointing “ethics officers” to monitor ethical manners of employees.
c. providing training sessions in ethical behavior for employees.
d. establishing codes of ethical behavior for employees.
10. Which of the following is not an economic agent in your locality?
a. Producer c. Public Sector
 b. Consumer d. None of ABC
https://www.stagneshs.org/ourpages/auto/2015/4/25/44353125/Unit%201%20Answer%20Key.pdf https://study.com/academy/practice/quiz-
worksheet-four-factors-of-production.html https://global.oup.com/us/companion.websites/9780199811786/student/chapt1/multiplechoice
https://quizizz.com/admin/quiz/5b7564f0dfd12e00194449b9/factors-of-production
NAME: ___________________________________ DATE: ______________________
GRADE & SECTION: _________________________ TEACHER: Aloha C. Cantos

Worksheet
Let’s do this (Additional Activity No. 1)

Direction: Listed below are the resources for production of goods and services. Please
list down the economic issues to each resource of production that may harm the economy.
Choose your answer from the box below. You may collaborate with family and friends in
accomplishing the graphic organizer.

Land Labor

_______________________ ______________________

Resources of
Production

Capital Entrepreneurship

_________________ __________________

*inadequate land and natural resources; polluted areas; overcrowded spaces

*unskilled workforce; mismatch of jobs
*low quality of equipment/machines; insufficient fund/capital;
*entrepreneurship–inadequate training of entrepreneurs; no new and great ideas
 Activity No. 2
Please categorize the characteristics of microeconomics and macroeconomics using the
diagram below. This will enhance your creativity to solve issues in the future.
*Studies the behavior of individual economic units;
*Focuses of the behavior of individual in the market
*Focuses on parts of the economy: individuals, firms, and industries;
*Studies the economy as a whole
*Focuses on goals like production standard of living, unemployment & inflation
*Policies are focused on monetary policy and fiscal policy
*Studies od markets of goods and services

The Economy

Microeconomics Macroeconomics
1.
1.
2.
2.
3.
3.

References