module 1 Applied Economics

1. APPLIED
ECONOMICS
QUARTER 3 – MODULE 1
ECONOMICS AS SOCIAL AND APPLIED SCIENCE
IN TERMS OF NATURE AND SCOPE

2. LET’S CHECK YOUR PRIOR KNOWLEDGE…
Directions: Identify what scarce resource is represented in
each picture. Analyze the supporting sentence of each item
and write MICRO if it belongs to microeconomics and
MACRO if it is macroeconomics. Jumbled word is provided
to guide you identify the scarce resource asked.

3. Many people are not able to eat enough in
a day because of the lockdowns during the
pandemic.

4. People are having a problem on saving
money due to Inflation or increase in
the price level of goods and services.

5. Global warming has caused water resources
in some areas to run-short of.

6. Overpopulation and oversupply of the labor
force have caused many people to be
unemployed.

7. Some students in rural areas are having
trouble doing their work due to lack
of internet access.

8. There’s a shortage of school supplies in
the market of some remote islands due to
the delayed delivery from the suppliers
caused by restrictions on transportation
during the pandemic.
LOOHCS SUPPEILS

9. Medical practitioners do not have enough
supplies to protect themselves
during the COVID-19 pandemic.

10. WHAT IS IT?
Economics is a branch of
social science concerned with
the use of limited resources
to meet boundless desires
(Rabanal, 2018).

11. NATURE OF ECONOMICS
It involves a systematized collection of facts and
figures.
It is based on the formulation of theories and laws.
It deals with the cause-and-effect relationship.

12. SCOPE OF ECONOMICS
Microeconomics studies the
behavior of individual market
participants such as
consumers, producers, and resource
owners, as well as corporations.

13. SCOPE OF ECONOMICS
It is more concerned with the
flow of commodities from the
business to the consumer, as well
as the movement of resources from
the resource owner to the
business.

14. SCOPE OF ECONOMICS
It also deals with the
process of determining the
price of commodities,
commonly known as Price
Theory.

15. Elasticity: The ratio of change in the percentage
of one variable to another variable is
determined by elasticity. For example, demand
elasticity of income, demand elasticity of price,
demand elasticity of supply, and so on.
CHARACTERISTICS OF MICROECONOMICS:

16. Theory of Production: It entails the
conversion of inputs into outputs in a cost-
effective manner. Packaging, shipping,
storage, and manufacturing are only a
few examples.
CHARACTERISTICS OF MICROECONOMICS:

17. Cost of Production: This theory
evaluates the object price based
on the cost of resources.
CHARACTERISTICS OF MICROECONOMICS:

18. Oligopoly: It refers to the
market domination of tiny
businesses.
CHARACTERISTICS OF MICROECONOMICS:

19. Macroeconomics is a branch of
economics that studies the whole
economy and the issues that affect
it.
SCOPE OF ECONOMICS

20. Unemployment, inflation,
economic growth, and monetary
and fiscal policy are the main
focal areas.
SCOPE OF ECONOMICS

21. Macroeconomics is concerned with
the nature of economic growth, as
well as the extension of productive
capacity and national income.
SCOPE OF ECONOMICS

22. AGGREGATES AND THEIR INTERACTIONS
OF MACROECONOMICS:
Growth: It investigates the elements that
contribute to economic growth, such as
an increase in a country's output per
capita through time.

23. AGGREGATES AND THEIR INTERACTIONS
OF MACROECONOMICS:
Business Cycle: It argues for the central bank
and the government to collaborate in
formulating monetary and fiscal policies to track
output throughout the business cycle.

24. AGGREGATES AND THEIR INTERACTIONS
OF MACROECONOMICS:
Unemployment: The unemployment rate is
used to calculate it. It is caused by a
number of variables, including pay increases, a
shortage of job openings, and so forth.

25. AGGREGATES AND THEIR INTERACTIONS
OF MACROECONOMICS:
Inflation and Deflation: Inflation refers to an increase
in a commodity's price, whereas deflation refers to a
reduction in a commodity's price. These indicators are
useful for assessing the state of a country's economy.

26. ECONOMICS AS AN APPLIED
SCIENCE
Figure 2. Economic Theory is all about thinking things up, while Applied Economics is
about trying things out (Market Business News, n.d.).

27. ECONOMICS AS AN APPLIED
SCIENCE
Applied Economics, as opposed to
economic theory, is the study of
economics in real world settings. It
is the application of economic ideas
and theories to real-world
circumstances with the goal of
predicting the results.

28. ECONOMICS AS AN APPLIED
SCIENCE
It is the application of economic
theory and econometrics to specific
situations in order to analyze possible
outcomes.

29. It is characterized by the application of the
core, referring to economic theory and
econometrics, as a means of dealing with
practical issues in fields such as demographic
economics, labor economics, business
economics, agricultural economics,
development economics, education economics,
health economics, monetary
economics, economic history, and many others.

30. WHAT IS ECONOMETRICS?
Econometrics – is the application of statistical
and mathematical theories to economics for
the purpose of (Cambodian Economist Group, n.d.):
⚫ Testing hypotheses
⚫ Forecasting future trends

31. Econometrics Example:
Real life application of
econometrics would be to study
the hypothesis that as a
person’s income increases,
spending increases (Macalinao,
E. M., 2017).

32. Figure 3. Part of Econometrics is converting economic theories into data that policy makers
can use (Market Business News, n.d.).

33. WHAT IS THE IMPORTANCE OF APPLIED
ECONOMIC APPLICATION?
1. When economics is applied to a firm, a household, or a country, it
helps to eliminate any attempts to make a situation appear worse or
better than it is.
• Applied economics becomes a powerful tool for revealing the genuine
and entire situation so that actions can be taken.
Example:
Applied economics can be used to evaluate a company's earnings. The
findings may aid CEOs in devising tactics to increase sales.

34. WHAT IS THE IMPORTANCE OF APPLIED
ECONOMIC APPLICATION?
2. Applied economics serves as a framework for determining what activities can be
taken to improve the current economic condition in a reasonable manner.
• by examining each aspect, it is possible to improve areas where performance is
lacking.
Example:
• Buying and selling products and services
• The utilization of raw materials
• Within the organization, there is a division of labor (e.g., firm, company, agency)

35. WHAT IS THE IMPORTANCE OF APPLIED
ECONOMIC APPLICATION?
3. Applied economics may educate you the way to
avoid making costly mistakes.
• to review what steps were taken to improve and
correct situations and continue good
strategies to keep the economy flowing in a correct
direction.

36. LET’S CHECK YOUR UNDERSTANDING…
Directions. Give what is asked
for in each item. Write your
answers in your notebook.

37. LET’S CHECK YOUR UNDERSTANDING…
1. Explain briefly and concisely the economic process where
it shows why people have to practice economics by analyzing
the flow of the diagram/illustration below (brainly.ph,
n.d.).

38. LET’S CHECK YOUR UNDERSTANDING…
2. The scope of economics can be understood under two
subheads: Microeconomics and
Macroeconomics. Explain in the Venn diagram their
differences and similarities.

39. LET’S CHECK YOUR UNDERSTANDING…
3. Explain applied economics application by stating its
importance and their examples. Make use of a diagram to
show your explanation.

40. LET’S CHECK YOUR UNDERSTANDING…
How does resource scarcity impact
economic growth and development?
What are the implications for
energy, water and food security?