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Applied Economics Module 2

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Ethyl Vilgrace Pacaldo
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5 views

Applied Economics Module 2

for college students

Uploaded by

Ethyl Vilgrace Pacaldo
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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BUSN 5: Applied Economics

Learning Module 2: Economics as Applied and Social


Science

Prepared by:
Ethyl Vilgrace Oliveros Pacaldo
Faculty, Institute of Arts and Sciences
ECONOMICS AS APPLIED AND SOCIAL
SCIENCE

ECONOMICS
-Oikanomia-
(Household Management)

Is the proper allocation and Is the science of choice. It studies how


efficient use of available people choose to use scarce resources to
resources for the maximum produce various commodities.
satisfaction of human wants

-Nordhaus-
-Fajardo-

Is a branch of knowledge that deals


Is a scientific study which with production, distribution and
deals with how individuals consumption of goods and services.
and society may general
choices.
-Webster-
-Sicat-

ECONOMICS IN PROCESS:

UNLIMITED WANTS
SCARCITY MAKE CHOICES
ECONOMIC ACTIVITIES:

 Earning Money
 Buying Goods and Services
 Depositing and Withdrawing money in bank

ECONOMICS AS SOCIAL SCIENCE:

- Is classified as a social science because it deals with the study of human’s


life and how he lives with other men.

Science
Social
Science
Economics

MACROECONOMICS VS MICROECONOMICS:
ECONOMICS

MACROECONOMICS MICROECONOMICS

MACROECONOMICS

 Deals with the economics behavior of the whole economy or its aggregates
(composed of individual units)
 Discusses the following:
 Gross national product
 Level of employment
 National income
 General level of prices

AGGREGATES

MICROECONOMICS
 Deals with economic behavior of individuals units such as:
o Consumers
o Firms
o Landowners
 Discusses the following:
o Price of rice
o Number of workers in a certain firm
o Income
o Expenditure

Production

Public Finance Divisions of


Distribution
Economics

Consumption Exchange

BASIC ECONOMICS PROBLEMS:

 Unemployment
 Poverty
 Poor Quality of Infrastructure
 Income Inequality

Unemployment

(Common Causes)

 The number of people entering the job market has been greater that the
number of jobs created.
 The rural-urban migration increases due to employment opportunities
 Many of the unemployed individuals are college graduates

Rural to Urban Migration

Push Factors Pull Factors


 Few services  Access to services
 Lack of job opportunities  Better job opportunities
 Unhappy life  More entertainment facilities
 Poor transport links  Better transport links
 Natural disasters  Improved living conditions
 Wars  Hope for a better way of life
 Shortage of food  Family links

What can be done solve unemployment problem?

 Appropriate economics policies for labor-intensive industries


 Improve the educational system of the country especially in the rural
areas
 Minimize rural-urban migration by improving the economic environment
in rural areas
 Proper coordination between government and the private sector to solve
the problem of job mismatch
 Slowing population growth. Philippine growth must increase faster than
the population.
 Provision of more investment opportunities to encourage local and
international investment

Poverty

(Common Causes)
 Increase in population
 Increase in the cost of living
 Unemployment
 Income quality

What can be done to solve the poverty problem?

 Reduce unemployment
 Appropriate policy on labor income
 Provision of unemployment benefits for those who will be unemployed
due to natural or man-made calamities (Typhoon, Bombing of terrorists,
earthquake)
 Increase social services like education, health care and food subsidies for
sustainable poverty reduction
 Appropriate policy on labor crime

Poor Quality of Infrastructure

(Common Causes)

 Increasing rate of corruption


 Substandard materials

What can be done to solve poverty problem?

 The government shall implement fiscal reform program


 Continue reform in key sectors – particularly power, roads and water – to
improve cost recovery, competition, and institutional credibility and to
sharply reduce corruption.
 Improving central oversight of the planning and coordination of
investments
 Focus on investment through public-private partnerships to achieve faster
delivery of service

Income Inequality

Income is the money that an individual earned from work or business


received from investments
Income Inequality - refers to the gap in income that exists between the rich
and the poor

(Major Causes)

 Political Structure (palakasan, utang na loob)


Example: Voting for the wrong person during election
 Indirect Taxes – poor people shoulder these taxes like the Value
Added Tax – 12%
 Income Taxes

What can be done to solve the problem of income inequality?

 Policies to enforce progressive rates of direct taxation on high wage


earners and wealthy individuals
 Direct money transfers and subsidize food programs for the urban and
rural poor
 Direct government policies to keep the price of basic commodities
 Raise minimum wage
 Encourage profit sharing

Exercise No. 3

1. Aside from the economic problems enumerated in this learning


material, cite atleast three (3) economic problems that the Philippine
Economy experiencing nowadays in the time of Covid-19 pandemic
and how these problems will be solved.

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