12

Applied Economics
Quarter 1
Module 1: Economics as an applied
science

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Applied Economics - Grade 12
Quarter 1 – Module 1: Economics as an Applied Science

Republic Act 8293, section 176 states that: No copyright shall subsist in any work of the
Government of the Philippines. However, prior approval of the government agency or office wherein
the work is created shall be necessary for exploitation of such work for profit. Such agency or office
may, among other things, impose as a condition the payment of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names, trademarks, etc.)
included in this book are owned by their respective copyright holders. Every effort has been exerted
to locate and seek permission to use these materials from their respective copyright owners. The
publisher and authors do not represent nor claim ownership over them.

Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

Development Team of the Module

Writers: Joanna Marie J. Madrid, Teacher II
Editors: Ms. May D. Catubig, AP Area Chairman / Mr. Rhoderick M. Barretto, Assistant Principal II
Reviewers: Ms. Joy G. Cabrera, EPS / Mr. Darcy Guy Y. Mañebo, EPS
Illustrator: Joanna Marie J. Madrid, Teacher II
Layout Artist: Joanna Marie J. Madrid, Teacher II

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Applied Economics - Grade 12
Quarter 1www.dreamstime.com
– Module 1: Economics as an Applied Science

I. Introduction:

Knowing and understanding the economic problem of the country, where everybody
is complaining of not having sufficient income to meet both ends of the family, thus family
members is suffering from scarcity. Apply and studying economics is needed nowadays. This
is the reason why people have to practice economics in daily lives, in this lesson, you are
expected to understand to make good decisions in choosing how to maximized the use of
scarce resources to satisfy as many wants as possible.

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II. Objectives
At the end of the lesson you
are expected to:

ABM_AE12-Ia-d-1
 Describe the basic term’s in applied economics.
 Appreciate the importance of studying economics in one’s life.
 Recognize different economics activities existing within their locality.
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III. Vocabulary List

Let’s unlock the difficulties thru the help of most common terms below that used in the
topics.
 Resources- things that used to make other goods.
 Needs – stuff we must have to survive, generally: food, shelter, and clothing.
 Wants- stuff we would really like to have (fancy food, shelter, clothing, big screen
TVs, jewellery, conveniences, also known as luxuries.
 Goods- tangible ( you can touch it) products we can buy.
 Sevices - works that is performed for others.
 Purchasing Power- the amount of goods and services that can be purchased with a
unit of currency
 Opportunity Cost- refers to the value of the best foregone alternative.
 Trade-offs – one thing is given up in order to get another.
 Stuff- Goods and service

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IV. Pre-Test
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I. MULTIPLE CHOICE: Write the letter that correspond to the correct answer on your
answer sheet.
1. Who is the Father of modern Economics?
a. Bryan Adams b. Adam Smith c. Joseph Smith d. Joseph Adams
2. Economics etymology came from the two greek words ‘oiko’ and ‘nomos’ which
means_______.
a. management of the house c. management of funds
b. management of money d. management of the home
3. What is insufficiency in resources to meet the wants and needs of the consumers?
a. scarcity b. inflation c. depression d. recession
4. Which of the following refers to the tangible products?
a. needs b. wants c. stuff d. goods
5. Why does Economics regarded as Science?
a. It uses laboratory equipment c. It uses factual information
b. It uses scientific methods d. It uses theories

II. MATCHING TYPE: Match Column A with Column B. White the letter of the correct
answer on your answer sheet.

A B
____ 1. Opportunity Cost a. good is scarce compared to its demand.
____ 2. Absolute scarcity b. It refers to the value of the best foregone
____ 3. Trade-off c. one thing is given up in order to get another
____ 4. Economics d. supply is limited
____ 5. relative scarcity e. study of social behavior guiding in the allocation of
scarce resources.

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 V. Learning Activities
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Learning Activity 1. Let Us Examine!

Nowadays we are facing a big economic crisis. These
problems have a big impact on our society and especially to
the economic situation of our country. As Senior High
School Student, this is a big challenge, Now that we are
embracing the “new normal” setting amidst the COVID19,
Learning the importance of Economics would be
advantageous for you.

In this activity, your task is to arrange the jumbled

letters and define the terms based on your prior knowledge. Write the answers on your
answer sheet.

JUMBLED ANSWER PRIOR KNOWLEDGE

LETTERS

1. NWTSA _____________

2. CRASYCIT _____________

3. DSENE _____________

4. REDAT FSFO _____________

5. CEOMICONS _____________

Learning Activity 2. Concept Map

Write a word/ concept related to economics and from your work, after you are done
with the concept web, define economics by choosing from the words you given in the concept
web. Write the answers on your answer sheet.

ECONOMICS

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Process Questions: Please refer your answer to the concept web and write the answer on
your answer sheet.

1. What did you observe from your given example?

2. Why do we need to study economics?

Learning Activity 3
Today, most of us is facing challenges that needs to be addressed; shortage of foods,
commodities, increase in gasoline price, low standard of living and other issued related to the
needs of the family.

Guided Questions: Please refer your answer base on learning activity 1 and 2. Write the
answers on your answer sheet.

1. Which part of the activities was difficult to answer? Why?

2. Which part of the activities was easier to answer? Why?
3. As a Senior High School students, what would be your part as a contribution to our
economy?

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Economics comes from two old Greek words - ‘oiko’, which means ‘home’
and ‘nomos’ which means ‘management’. (household management).

What is Economics?

 Economics -is the study of social behaviour guiding in the allocation of scarce
resources to meet the unlimited needs and desires of the individual members of a
given society. Adam Smith is the Father of Modern Economics.

Economics as defined by authors of Economics books

 Paul Samuelson (Economics) – the study of how people and society end up choosing,
with or without use of money, to employ scarce resources that could have alternative
uses to produce various commodities among various persons and groups in society.
 Roger Le Roy Miller (Economics, Today and Tomorrow) – “economics concerns
situations in which choices must be made about how to use limited resources, when to
use them and for what purposes. Resources can be defined as the things people use to
make the commodities they want.”
 Hall and Loeberman (Macroeconomics: Principle and Applications) – the study of
choice under the condition of scarcity.

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  Economics is the study of the proper allocation and efficient use of available scarce
resources in the production of goods and services for the maximum satisfaction of
human needs and wants. (Feliciano R. Fajardo).
Economics as a science

Economics is a science because it is an organized body of truth, coordinated, arranged

and systematized with reference to certain general laws and principles. (Observation,
Formulation of theories, Gathering of data, Experimentation, Conclusion, Generalization). It
is regarded as a science because it uses scientific methods to build theories that can help to
understand how individuals, groups, and organizations interact within the social structure to
address key questions about the production and exchange of goods and services.
Economic analysis seeks to explain economic events using some kind of logic based on a
set of systematic relations. It is a social science because the subject of economics is people or
societies and their behaviour which is unpredictable in nature, a social science is, broadly
speaking, the study of society and how people behave and influence the world around them.
In addition, economics study were individual makes choices in allocating scarce resources to
satisfy their unlimited wants.

Essence/ Relevance of Studying Economics

 To understand the world better

Applying the tools of economics can help you understand global and disastrous events such
as wars, famines, epidemics, and depressions. Economics has the power to help us understand
these phenomena because they result from the choices we make under the condition of
scarcity.
 To gain self-confidence and become wise decisions makers
Mastery of economics will help you to understand how things work in your society thereby
“feeling equipped”.
 To achieve social change and contribute to National Development
Economics can help us understand the origins of serious social problems such as:
unemployment, hunger, poverty, disease, child abuse, drug addiction, violent crime. It will
also explain why previous efforts to solve these problems have failed, and help us to design
new, more effective solutions.

BASIC CONCEPT OF ECONOMICS

We all know that economics is a social science, which

deals with production, distribution and consumption
functions. It is all about making choices regarding the
allocation of scarce resources, so as to make their best
possible use and satisfy human wants and needs. In
economics, we often go through the terms needs and wants,
but have you wondered about their differences. Needs point
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out something you must have for survival.

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 On the other hand, wants refers to something which is good to have, but not essential
for survival. For the purpose of spending and saving money wisely, every person must know
the difference between needs and wants.
By the term needs, we mean those requirements which are extremely necessary for a
human being to live a healthy life. They are personal, psychological, cultural, social, etc that
are important for an organism to survive.
In ancient times the three basic needs of the man are food, clothing and shelter but
with the passage of time, education and healthcare also became integral, as they improve the
quality of life. They are a person’s first priority as they are the things, that they keep us
healthy and safe. Therefore, if needs are not satisfied in time, it may result in illness, inability
in functioning properly or even death.
In economics, wants are defined as something that a person would like to possess,
either immediately or at a later time. Simply put, wants are the desires that cause business
activities to produce such products and services that are demanded by the economy. They are
optional, i.e. an individual is going to survive, even if not satisfied. Further, wants may vary
from person to person and time to time.
We all know that human wants are unlimited while the means to satisfy those wants
are limited. Hence, all the wants of an individual cannot be met and they must seek for
alternatives.

INTRODUCTION TO ECONOMICS
(Applied Economics by: Rosemary P. Dinio, PhD , Greorge A. Villasis)

Everybody goes through a day faced with constraints or limitation. People always
complain about not having enough to meet all the family’s needs. This, in effect, is the
existence of what we call scarcity. That is, insufficiency of resources to meet the wants of
customers and insufficiency of resources of producers that hamper enough production of
goods and services.
Scarcity is the reason why people have to practice economics. Part of human behavior
is the tendency of man to want to have as many goods and services as he can. 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.
Scarcity is a condition where there are
insufficient resources to satisfy all the needs and
wants of a population. Scarcity may be relative or
absolute. Relative scarcity is when a good is scarce
compared to its demand. For example, coconuts are
abundant in the Philippines since the plant easily to
grows in our soil and climate. However, coconuts
www.wordpress.com became scarce when the supply is not sufficient to
meet the needs of the people. Relative scarcity occurs not because the good is scarce per se
and is difficult to obtain but because of circumstances that surround the availability of the
goods. Bananas are abundant in the Philippines and are being grown in a lot of regions

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around the country. But when a typhoon destroys banana plants and farmer has no bananas to
harvest, then bananas become relative scarce.
On the other hand, absolute scarcity is when supply is limited. Oil is absolutely scarce
in the country since we have no oil wells from which we can source our petroleum needs, so
we rely heavily on imports from oil-producing countries like Iran and other Middle Eastern
countries. Cherries are absolutely scarce in our country since we do not have the right climate
to grow them and we have to rely on imports for our supply of cherries. This explains why
cherries are very expensive in the Philippines.

CHOICE AND DECISION-MAKING

Because of the presence of scarcity, there is a

need for man to make decisions in choosing how to
maximize the use of the scarce resources to satisfy as
many wants as possible. A homemaker who has a
monthly budget needs to decide on how to utilize it to
pay the rent, to buy food, to pay the children’s tuition www.slideshare.com
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fees, and to buy new clothes and shoes. She needs to make a choice. If she decides not to buy
new shoes for her children at start of the school year, then this is the choice she gave up.
Opportunity cost refers to the value of the best foregone alternative. When land is
devoted exclusively to the cultivation of rice, we give up an output of bananas or mangoes
that we could have planted on that area. A producer, who decides to transform all his leather
into shoes, gives up the chance to produce bags with that leather. A school teacher, who
could have worked in the bank, gives up his salary as a manager. That salary is his
opportunity cost. Without scarcity, a person does not need to make choice since he/ she can
have everything he/ she wants.
The concept of opportunity cost holds true for individuals, businesses and even a
society. In making a choice, trade-offs are involved. The opportunity cost of watching a
movie in a cinema is the value of other things that you could have bought with that money
such as a pint of ice cream, a combo meal in the fast food, or a simple t-shirt to be used in P.E
class. Another example is giving up work in favor of recreational activity, say you go on a
week’s stay in Boracay on leave without pay. Then you are giving up the income you would
have earned had you not decided to go on trip. Another example would be a business
proprietor that withdraws Php 10, 000 from his savings account so he can buy materials to be
used in his business.

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 VI. Practice Tasks
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Practice Task #1 Reflecting on needs versus wants

Understanding the difference between needs and wants that will help you to be
strategic about your spending.
Directions:
Categorize your spending
Think of at least 10 things you and your family has bought or spent money on
recently. Record them in either the “Needs” or “Wants” column in the table below.
 Examples of needs might be food and school supplies.
 Examples of wants might be specialty coffees, designer clothing, and video games.
Write the answers on your answers sheet.
NEEDS WANTS

Practice Task #2 Let’s Practice your knowledge

After you have read the topic about the economics as an applied science, answer the
following questions below. Write the answers on your answer sheet.

1. Define economics as social science thru a self-made slogan.

2. Describe the meaning of economics as social science thru a drawing.
3. How will you define scarcity base on your understanding in the lesson?
4. Do you experience scarcity in your life? (Cite your experience)
5. What action did you make?

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 Rubric
Components Needs Developing Sufficient Above
Improvement 2 3 Average
1 4
Clarity The purpose of The central The central The central
(supported by the student purpose of purpose of purpose of the
relevant work is not the student the student is student is clear
information will define. is identified. clear and and supporting
and ideas) The central Ideas are ideas are ideas are
ideas are not generally almost always well-
focus to focused in a always focused.
support the way that focused in a Details are
topic. supports the way that relevant,
topic. supports the enrich the
topic. work.
Organization Information Information Information Information
(sequence of and ideas are and ideas and idea are and idea are
elements/ poorly are presented in a presented in a
ideas) sequenced. presented in logical logical
The reader has an order sequence sequence
difficulty that the which is which flows
following the reader can followed by naturally and
thread of follow with the reader is engaging to
thought. minimum with little or the reader.
difficulties. low
difficulty.
Mechanics There are five There are There are no There are no
Correction of or more no more more than more than two
grammar and misspellings than four Three misspelled
spelling) and / or misspellings misspellings words or
systematic and / or and / or grammatical
grammatical systematic systematic errors in the
errors in the grammatical grammatical essay.
entire essay. error in the error in the
entire essay. entire essay.

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 Practice Task # 3 Let’s React in the Scenario

Instruction: Choose from the given decision to help you decide what to do in the two
Scenario below.
SCENARIO 1
Consider that you are the Barangay Captain and you have Php 150,000 budget for the
lighting of the street lights and other facilities for your barangay. Then here’s the pandemic
came in the Philippines and to prevent the virus to spread in the country some Municipalities
and Barangays are put to lockdown the decision must be made next week and one of them is
your area. All establishments and transportation are ordered to stop its operations. You have
two choices described below base on the meeting with your barangay officials.

 Use the Php150,000 pesos budget for lighting of streetlights. This will provide more
light for the safety of citizen and driver that passed through in the barangay in the
midnight to lessen the crime.
 Use the budget for the medicine kit, medical equipment, relief goods and other needs
of the barangay to help their constituent.
Guided Questions: Please refer your answer from the above given scenario. Write the
answers on your answer sheet.
1. What would you do?
2. What is the opportunity cost of your decision?
3. What are the trade-offs of your decision?
SCENARIO 2
After you completed your basic education which is the K-12 program, most of your
parents have an expectation from you, that you will be able to find a job after your Senior
High School Program but if you will be given a choice what would you do after completing
the SHS Program?

 Look for a job immediately after SHS program or

 Pursue Bachelor’s Degree.

Guided Questions: Please refer your answer from the above given scenario. Write the
answers on your answer sheet.
1. What would you do?
2. What is the opportunity cost of your decision?
3. What are the trade-offs of your decision?

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 Rubric
Components Needs Developing Sufficient Above
Improvement 2 3 Average
1 4
Clarity The purpose of The central The central The central
(supported by the student purpose of purpose of purpose of the
relevant work is not the student the student is student is clear
information will define. is identified. clear and and supporting
and ideas) The central Ideas are ideas are ideas are
ideas are not generally almost always well-
focus to focused in a always focused.
support the way that focused in a Details are
topic. supports the way that relevant,
topic. supports the enrich the
topic. work.
Organization Information Information Information Information
(sequence of and ideas are and ideas and idea are and idea are
elements/ poorly are presented in a presented in a
ideas) sequenced. presented in logical logical
The reader has an order sequence sequence
difficulty that the which is which flows
following the reader can followed by naturally and
thread of follow with the reader is engaging to
thought. minimum with little or the reader.
difficulties. low
difficulty.
Mechanics There are five There are There are no There are no
Correction of or more no more more than more than two
grammar and misspellings than four Three misspelled
spelling) and / or misspellings misspellings words or
systematic and / or and / or grammatical
grammatical systematic systematic errors in the
errors in the grammatical grammatical essay.
entire essay. error in the error in the
entire essay. entire essay.

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VII. Post Test

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I. MULTIPLE CHOICE: Write the letter that correspond to the correct answer on your
answer sheet.

1. Who is the Father of modern Economics?

a. Bryan Adams c. Joseph Smith
b. Adam Smith d. Joseph Adams
2. Economics etymology came from the two greek words ‘oiko’ and ‘nomos’ which means
______________.
a. management of the house c. management of funds
b. management of money d. management of the home
3. What is insufficiency in resources to meet the wants and needs of the consumers?
a. scarcity b. inflation c. depression d. recession
4. Which of the following refers to the tangible products?
a. needs b. wants c. stuff d. goods
5. Why does Economics regarded as Science?
a. It uses laboratory equipment c. It uses factual information
b. It uses scientific methods d. It uses theories

II. MATCHING TYPE: Match Column A with Column B. White the letter of the correct
answer on your answer sheet.

A B
____ 1. Opportunity Cost a. good is scarce compared to its demand.
____ 2. Absolute scarcity b. It refers to the value of the best foregone
____ 3. Trade-off c. one thing is given up in order to get another
____ 4. Economics d. supply is limited
____ 5. relative scarcity e. study of social behavior guiding in the allocation of
scarce resources.

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VIII. Assignment/Additional Activities

Additional Practice:
Consider the following situation and answer the questions below: You are planning to
attend college next year. The total cost of tuition and textbooks is Php10,000. If you go to
school, your room and board will cost you Php 5,000. If you did not go to school, however,
you would live at home, and your total room and board would only be Php 1,000.
Additionally, if you didn't go to college, you would work a job making Php 20,000 for the
year.
In terms of room and board alone, what would be your opportunity cost of attending college?
Be sure to explain your answer (HINT: The answer is not Php 5,000).
Guided Questions: Please refer your answer from the above given scenario. Write the
answers on your answer sheet.
1. What are the explicit costs of attending school? How much should be included for
room and board.
2. What would be the implicit cost of attending college next year?
3. What would be the total opportunity cost of attending college next year?

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 Rubric
Components Needs Developing Sufficient Above
Improvement 2 3 Average
1 4
Clarity The purpose of The central The central The central
(supported by the student purpose of purpose of purpose of the
relevant work is not the student the student is student is clear
information will define. is identified. clear and and supporting
and ideas) The central Ideas are ideas are ideas are
ideas are not generally almost always well-
focus to focused in a always focused.
support the way that focused in a Details are
topic. supports the way that relevant,
topic. supports the enrich the
topic. work.
Organization Information Information Information Information
(sequence of and ideas are and ideas and idea are and idea are
elements/ poorly are presented in a presented in a
ideas) sequenced. presented in logical logical
The reader has an order sequence sequence
difficulty that the which is which flows
following the reader can followed by naturally and
thread of follow with the reader is engaging to
thought. minimum with little or the reader.
difficulties. low
difficulty.
Mechanics There are five There are There are no There are no
Correction of or more no more more than more than two
grammar and misspellings than four Three misspelled
spelling) and / or misspellings misspellings words or
systematic and / or and / or grammatical
grammatical systematic systematic errors in the
errors in the grammatical grammatical essay.
entire essay. error in the error in the
entire essay. entire essay.

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IX. Answer Key

Pre-test

I. MULTIPLE CHOICE: Write the letter that correspond to the correct answer on your
answer sheet.

1. Who is the Father of modern Economics?

a. Bryan Adams b. Adam Smith c. Joseph Smith d. Joseph Adams
2. Economics etymology came from the two greek words ‘oiko’ and ‘nomos’ which
means_______.
a. management of the house c. management of funds
b. management of money d. management of the home
3. What is insufficiency in resources to meet the wants and needs of the consumers?
a. scarcity b. inflation c. depression d. recession
4. Which of the following refers to the tangible products?
a. needs b. wants c. stuff d. goods
5. Why does Economics regarded as Science?
a. It uses laboratory equipment c. It uses factual information
b. It uses scientific methods d. It uses theories

II. MATCHING TYPE: Match Column A with Column B. Write the letter of the correct
answer on your answer sheet.

A B
b.____1. Opportunity Cost a. good is scarce compared to its demand.
d.____ 2. Absolute scarcity b. It refers to the value of the best foregone
c.____ 3. Trade-off c. one thing is given up in order to get another
e.____ 4. Economics d. supply is limited
a.____ 5. relative scarcity e. study of social behavior guiding in the allocation of
scarce resources.

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 Learning Activity 1. Let Us Examine!
In this activity, your task is to arrange the jumbled letters and define the terms based on your
prior knowledge. Write the answers on your answer sheet.

JUMBLED ANSWER PRIOR KNOWLEDGE

LETTERS

1. NWTSA WANTS It is the desire that fulfil our satisfaction.

2. CRASYCIT SCARCITY Shortage of supply / lack of resources.

3. DSENE NEEDS Basic necessity and we cannot live without

these.

4. REDAT FSFO TRADE OFF It is the exchange of something.

5. CEOMICONS ECONOMICS Study about the resources to satisfy our needs

and wants.

Learning Activity 2. Concept Map

Write a word/ concept related to economics and from your work, after you are done
with the concept web, define economics by choosing from the words you given in the concept
web. Write the answers on your answer sheet.
demand
Scarcity Market services
Goods

Money
Factory

supply Producer
ECONOMICS Government
inflation
Households
Society

Entrepreneur
Price Consumer
taxes profit
Process Questions: Please refer your answer to the concept web. Write the answers on your
answer sheet.

1. What did you observe from your given example?

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  Economics is crucial to our daily lives, it is broad.
 Economics is everywhere, it helps us to survive to our daily living, it makes
the world go round.
2. Why do we need to study economics?

 Economics is important to study because nowadays we are facing with many

problems and wise decision is important to avoid shortage.
 To know how government, businesses, societies, households, and individuals to
allocate their scarce resources. And also it helps us to provide valuable knowledge for
making decisions in everyday life.

Learning Activity 3
Today, most of us is facing challenges that needs to be addressed; shortage of foods,
commodities, increase in gasoline price, low standard of living and other issued related to the
needs of the family.

Guide Questions: Please refer your answer base on learning activity 1 and 2. Write the
answers on your answer sheet.
1. Which part of the activities was difficult to answer? Why?

 The difficult part of the activities is to arrange the jumbled word, because
aside of positioning the unfamiliar letter you will give some insight about the
jumbled word.
 Another difficult part of the activities is the process question number 2 of
activity 2. I don’t know how to answer, the importance of studying economics.
2. Which part of the activities was easier to answer? Why?

 The easier part of the activities is the concept Map. Because economics is
everywhere, it easy for me to supply some word related to economics.
 Another easier part is to arrange the jumbled word, because some of words I
already encountered during grade 10 in economics subject. That is why it’s
easy for me to give some explanation about the jumbled word.

3. As a Senior High School students, what would be your part as a contribution to our
economy?

 As a Senior Students I will study hard so I can be able to apply my knowledge

and skills learned from my Senior High School to the field of work in the
future and become a productive individual to the country as part of the labor
force and because of that I will inspire others to do the same and to eradicate if
not, to minimize the unemployment rate in our country.

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 Practice Task #1 Reflecting on needs versus wants

Understanding the difference between needs and wants that will help you to be
strategic about your spending. Write the answers on your answer sheet.

NEEDS WANTS
Shelter Fancy suits
Food Pool
Water Touch screen cell phone
Cloth Big screen TV
Education Ferrari
Medicine Jewellery
Transportation New make up
Utilities Branded cloth
Family Starbucks
Air Home décor

Practice Task #2 Let’s Practice your knowledge

1. Define economics as social science thru a self-made slogan. (the answer may vary.)

 “Discipline is the key to success of the Nation.”

 “Think twice before you spend.”
2. Describe the meaning of economics as social science thru a drawing. (the answer may
vary.)
www.slideshare.com
(cto)

3. How will you define scarcity base on your understanding in the lesson?
(the answer may vary.)

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  Scarcity is the unlimited wants and needs of the consumer but the resources
are limited.

4. Do you experience scarcity in your life? (Cite your experience)

(the answer may vary.)

 Yes I’ve experience scarcity when it comes to allowance.

5. What action did you made? (the answer may vary.)

 Instead of riding a tricycle, I wake up early in the morning to walk in the

school and sometimes I sell food in my classmates during vacant hour.

Practice Task # 3 Let’s React in the Scenario

SCENARIO 1
1. What would you do?

 I will used the budget to buy medicine kit, medical equipment, relief goods
and other needs of the barangay to help my constituent.

2. What is the opportunity cost of your decision?

 The opportunity cost of my decision, I have a supply of medicine kit, medical

equipment, relief goods needed of my constituent during lockdown because of
pandemic that hits in the Phippines.

3. What are the trade-offs of your decision?

 The trade-offs of my decision is the streetlight project for my barangay.

SCENARIO 2
1. What would you do?
a. I will look for a job immediately after I finish Senior High School.
b. I will pursue my Bachelor’s Degree to enrol college.

2. What is the opportunity cost of your decision?

a. I have an opportunity to support my family needs.
b. If I pursue to enrol college and finish my study, I have a opportunity to get
better job.

3. What are the trade-offs of your decision?

a. The trade-off of my decision to get a job is the opportunity to pursue my

Bachelor’s Degree.
b. The trade-off of my decision to enrol is the opportunity to support the needs of
my family.

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Post Test Key Answers

I. MULTIPLE CHOICE: Write the letter that correspond to the correct answer on your
answer sheet.

1. Who is the Father of modern Economics?

a. Bryan Adams b. Adam Smith c. Joseph Smith d. Joseph Adams
2. Economics etymology came from the two greek words ‘oiko’ and ‘nomos’ which
means_______.
a. management of the house c. management of funds
b. management of money d. management of the home
3. What is insufficiency in resources to meet the wants and needs of the consumers?
a. scarcity b. inflation c. depression d. recession
4. Which of the following refers to the tangible products?
a. needs b. wants c. stuff d. goods
5. Why does Economics regarded as Science?
a. It uses laboratory equipment c. It uses factual information
b. It uses scientific methods d. It uses theories

II. MATCHING TYPE: Match Column A with Column B. Write the letter of the correct
answer on your answer sheet.

A B
b.____1. Opportunity Cost a. good is scarce compared to its demand.
d.____2. Absolute scarcity b. It refers to the value of the best foregone
c.____ 3. Trade-off c. one thing is given up in order to get another
e.____ 4. Economics d. supply is limited
a.____ 5. relative scarcity e. study of social behavior guiding in the allocation of
scarce resources.

Additional Practice: (assignment)

1. What are the explicit costs of attending school? How much should be included for
room and board?
 The opportunity cost (room and board) would be Php 4,000. You would spend
$1,000 either way, so the additional Php 4,000 (Php 5,000 - Php 1,000) is the
actual opportunity cost.
The total explicit cost would be Php 15,000, which is the cost of tuition and
books as well as the Php 5,000 for room and board. The Php 1,000 that would
have paid by staying at home by not going to school would actually be a
"savings" and would be applied to the implicit cost.

2. What would be the implicit cost of attending college next year?

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  The total implicit cost would be Php 19,000. You would be giving up the Php
20,000 you would have made by working, but would "save" the Php 1,000 in
room and board that you would have spent by living at home.

3. What would be the total opportunity cost of attending college next year?
 The total opportunity cost would be Php 34,000, which would be equal to the
sum of the explicit costs (Php 15,000) and implicit costs (Php 19,000).

23
 REFERENCES
1. Applied Economics by: Rosemary P. Dinio, PhD , Greorge A. Villasis
2. www.slideshare.com
3. Camarines Norte Division Applied Economics DLP
4. Question mark red
http://clipart-library.com/clipart/258756.htm
5. Dart
https://www.123rf.com/photo_39897487_stock-vector-darts-goal.html?
vti=mfats1ya0dvo2hnwp6-1-3
6. Book images
https://www.dreamstime.com/stock-photography-open-book-image15399662
7. Flying books with children
https://www.dreamstime.com/stock-illustration-fantasy-story-books-conceptual-
illustration-children-flying-will-take-them-anywhere-be-someone-derived-my-
image703783109.
8. Open book and pink flower
https://www.dreamstime.com/stock-photography-open-book-pink-flower-
image19047682
9. Question clipart - Clip Art Library
Download for free Questioning Cliparts #227323, download others question clipart
for free (clipart-library.com)
10. Cute girl in pink is sitting and reading a book. Concept design back to school in a flat
style.
https://www.dreamstime.com/stock-illustration-cute-girl-pink-sitting-reading-book-
concept-design-back-to-school-flat-style-character-image65661704
11. Scarcity image
https://www.quora.com/Is-the-allocation-of-resources-an-example-of-
microeconomics-or-macroeconomics
12. Unemployment meaning
https://corporatefinanceinstitute.com/resources/knowledge/economics/unemployment/
#:~:text=Unemployment%20is%20a%20term%20referring,not%20have%20an
%20appropriate%20job.
13. Purchasing power meaning
https://www.investopedia.com/terms/p/purchasingpower.asp
14. Girl with book eastwood
https://www.dreamstime.com/stock-images-girl-open-book-image25156544
15. Male Entrepreneur image
https://m.businesstoday.in/story/if-youre-great-with-numbers-heres-a-career-waiting-
for-you/1/236641.html

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16. Production meaning
https: //production-and-consumption-bs.weebly.com/production.html
17. Introduction to economics
https://www.slideshare.net/mobile/mikergo/introduction-to-economics-15041809
18. www.scribd.com
19. www.keydifference.com (images)
20. Manila Buliten (images)

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