The document provides an overview of key concepts in applied economics for a class including rules, grading system, learning objectives, and definitions of terms like scarcity, needs vs wants, trade-offs, opportunity costs, supply, demand, and the branches of economics. Scarcity exists because resources are limited while wants are unlimited, and economics studies how people deal with scarcity. Trade-offs are options given up when making a choice, and the most desirable alternative given up is the opportunity cost. Supply refers to the total goods available for sale, while demand is the total needs and wants of customers. Applied economics applies economic principles to real-world problems at the micro or macro level.

1. APPLIED
ECONOMICS
Week 1

2. CLASS RULES:
NO PHONES allowed during class
hours.
RESPECT your teacher.
RESPECT your classmates.

3. Grading System:
WW: 25%
PT: 45%
QA: 30%

4. MELC:
Differentiate economics as social science
and applied science in terms of nature
and scope
Subtask: Define basic terms in Applied
Economics

5. Scarcity
Scarcity is the condition in which
our needs and wants are greater
than our limited resources.

6. Why is SCARCITY linked to
Economics?
Scarcity is the reason why people have to study and
practice economics.
Economics studies how people distribute or divide their
limited resources in order to satisfy their unlimited
wants. Or simply, it is the study of how individuals and
societies deal with scarcity.

7. NEED vs. WANT
Needs are the things we can’t live
without.
Wants are the things we can live
without.

8. Trade-offs
When making choices, there are things
that we need to give up.
Trade-offs consist of all the options that
we give up when we make a choice.

9. Opportunity Costs
Among all your trade-offs, the most desirable
alternative that you gave up is called the opportunity
cost.
The key to making the best possible decision is to
minimize your opportunity cost by selecting the
option that gives you the largest benefit.

10. The Branches of Economics
Microeconomics is a branch of economics that is
concerned with the decision-making done by smaller
economic units such as individuals or consumers, firms
and industries.
Macroeconomics on the other hand is the study of the
large economy as a whole or the aggregate economy.

11. SUPPLY
Supply refers to the total number of goods or services available for
sale. These goods or services are produced by making use of the
factors of production consisting of land, labor and capital.
- Land refers to all natural resources or any raw materials coming
from the ground that is used to produce supply.
- Labor is the work done by people or human resources.
- Capital does not only mean money as this can be in the form of
man-made tools or objects that may be used to produce supplies.

12. DEMAND
Demand refers to the aggregate or the
totality of the needs and wants of the
customers.
NOTE: Balancing supply & demand is one of the
goal of Economics so that scarcity is eliminated.

13. Applied Economics
It is the application of the principles of supply,
demand, trade-offs, opportunity-costs, and
other economic theories to solve real-world
problems. It may be practiced in the
microeconomic or macroeconomic level.

14. Review Quiz (1/4)
Category: Multiple Choice
RULE: Any erasure or alteration
will be marked WRONG.

15. 1. Which of the following best defines
scarcity?
A) An excess of resources
B) An unlimited availability of resources
C) The limited availability of a resource
D) The absence of resources

16. 2. Which of the following best exhibits
a trade-off?
A) A person choosing to save money for a down payment on a
house, instead of taking a vacation.
B) A person choosing to drink water instead of soda.
C) A company choosing to use more efficient production methods,
which also reduce waste and improve overall quality.
D) A government choosing to allocate equal funds for healthcare
and education.

17. 3. Which of the following best defines
what an opportunity cost is?
A) The value of the next best alternative that must be given up in
order to pursue a certain action or decision.
B) The total cost of a good or service, including all expenses such
as materials, labor, and shipping.
C) The price paid for a good or service, including any taxes or fees.
D) The cost of capital, or the cost of borrowing money to fund an
investment.

18. 4. Which of the following statements
correctly defines supply?
A) The amount of a good or service that a producer is willing
and able to offer for sale at a given price.
B) The amount of money that consumers are willing to pay for
a good or service at a given price.
C) The total number of consumers in a market.
D) The total amount of a good or service available in a market,
regardless of price.

19. 5. Which of the following correctly
defines demand?
A) The willingness of consumers to buy goods and services at
a specific price
B) The cost of producing goods and services
C) The total value of goods and services produced in a specific
period of time
D) The amount of goods and services that a company is able
to produce