LEARNING ACTIVITY SHEET
For Applied Economics
S.Y. 2020 – 2021
Economics as a Social Science and Applied Science
in Terms of Nature and Scope
Module 1 Week 1
This LAS covers the learning competencies:
1. Define economics
2. Differentiate economics as social science and applied science in terms of nature
and scope
Content Standard:
The learner demonstrates an understanding of economics as an applied science and its
utility in addressing the economics problems of the country
Performance Standard:
The learners shall be able to analyse and propose solution/s to the economic problems
using the principles of applied economics
NATURE AND SCOPE OF ECONOMICS
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.
THE FIELDS OF ECONOMICS
Microeconomics and macroeconomics are two different 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.
Microeconomics Macroeconomics
•Studies of markets of goods and •Studies the economy as a whole
servservices •Focuses on aggregate indicators
Macroeconomics
(such asthe
•Studies production)
economy as a whole
•Focuses of the behaviour of . Unemployment and inflation
individual in the market . Monetary
•Focuses and fiscalindicators
on aggregate policy
Explains how and why these units make
economic decisions.
Figure 1. Micro vs Macro Economics
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
BASICTERMS 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.
INTANGIBLE GOODS – when they are
TANGIBLE GOODS –material
in the form of services. Those
goods or commodities.
rendered by doctors, engineers,
Ex. Bags, books, clothes. doctors and other professionals
Goods may also be classified according to use.
CONSUMERS GOODS – goods for the CAPITAL GOODS or INDUSTRIAL GOOD
ultimate consumption of the consumers. used in the
Ex.: toothpaste, bath soap, etc. production of
other goods and
services.
Ex.: buildings,
machinery,
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equipment. https://int.search.myway.com/search/AJimage.j
ESSENTIAL GOODS- used to satisfy LUXURY
the basic needs of man GOODS –
goods man
may do
without, but
may give
comfort and
E example: foods and medicine. satisfaction. Ex., perfume, cakes; chocolates
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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
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.
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ECONOMIC RESOURCES OR FACTORS
Economic resources are 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 Labor as a Factor of Production
Land - natural Labor is the work done by people- education, skills, and
resources motivation and productivity. Productivity measures how
available to much each hour of worker time produces in output.
create supply Workforce receives wage for his labor.
such as raw
materials that
comes from
the ground. It
can be a non-
renewable
resource;
commodities
www.study.com
such as oil and gold; and renewable
resource, such as timber. Oil is a natural
resource, but petroleum gas is a capital
good. Farmland is a natural resource, but a Istockphoto.com
shopping center is a capital good. (Amadeo,
k. 2019)
Capital as a Factor of Production Entrepreneurship as a Factor of Production
Capital Entrepreneurship develops an idea into a business. An
or entrepreneur combines the other three factors of
capital production to add to supply. The most successful
goods entrepreneurs are innovative and risk-takers. The income
are entrepreneurs earn is profits.
capital –
the
money
that
companies used to buy resources; man-
made objects like machinery, equipment,
and chemicals that are used in production.
For example, capital goods include industrial
and commercial buildings. A commercial
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aircraft is example of a capital good.
https://www.market-inspector.co.uk/blog/2017/01/10-basic-
office-equipment-for-starting-a-business
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
Written Task (30 points)
Activity no. 1 CLASSIFICATIONS OF GOODS
Directions: Pick all the goods and classify them accordingly. Your mother went to the
market to shop various goods for the family. She purchased the following: canned goods;
loaf of bread; sacks of rice; kilos of meat; vegetables; packs of toothpaste; bath soaps;
perfumes; wrist watches; unit of aircon to ventilate her store and units of coffee maker for
her store.
Consumer goods Luxury goods
Industrial goods Economic goods
Essential goods
Activity 2 (Picture Analysis)
Directions:
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 .
3
2
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.
Activity 3 : Supply the following missing information:
• 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
_____________.
• There are other issues and problems on the production of goods and
services related to resources.______________________________.
Analysis:
Part 1: 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 one example of each resource that the computer shop needs for
the production of its services. Choices are provided below the chart.
RESOURCES OF PRODUCTION
All natural resources, which are given by
and found in nature, and are, therefore,
not manmade.
Any form of human effort exerted in the
production of goods and services.
Man-made goods used in the production of goods and
services. It does not only include money, it also includes
building, machineries, equipment’s, raw materials used in
production
Development of an idea into a business. An entrepreneur combines the
other three factors of production to add to supply
Choices for No 1. Entrepreneurship; Land; Capital; Labor
Choices for No. 2 Manpower; space; great idea; computer
Part 11
Directions: Read the statements carefully and identify the following.
a) The ABM Manufacturing Co. hired a gardener. He uses a
lawn mower for landscaping. Which factor of production would you
consider this machine?
___________________________________________________________
b) The owner of the company withdrew cash for the salaries of the
employees. Which factor of production would you consider cash on
hand?
__________________________________________________
c) The top manager of the firm said “the great ideas and emotional
determination”, a person has 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?
d) The farmers planted pineapple cuttings in the vacant area located
in their locality. Which factor of production would you consider a
pineapple plantation?
____________________________________________
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Performance Task (30 points)
A. Performance Task no. 1
Directions: 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
Entrepreneurship
Capital Production _____________
____________
*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
Performance Task No. 2
Directions: 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 behaviour 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 productions standard of living, unemployment and inflation.
* Policies are focused on monetary policy and fiscal policy.
*Studies of markets of good and services
The Economy
Microeconomics Macroeconomics
1. 1.
2. 2
3. 3.
Reflection:
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.
Assessment (Multiple Choice )
Directions: 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. Consumers 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. Consumers Good c. Capital Good
b. Luxury Good d. Economic Good
3. ABM Computer shop purchased additional 10 units of computer for the business.
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 parsimonious the model is.
7. Which of the following is the study of the aggregate economy studied as a whole?
a. Mathematical economics
b. Econometrics
c. Macroeconomics
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 ensure that employees behave in an ethical manner.
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
b. Consumer
c. Public Sector
d. None of ABC
End
