Department of Education

ACCOUNTMATHEMATICS
9
Module 1

Applied Economics
First Quarter: Module 2
MARIA BLOSSOM S. VARNELL
WRITER

FLORINDA M. BERROYA, MBA

EDITOR/REVIEWER

EMELITA D. BAUTISTA Ed D
VALIDATOR

Schools Division Office – Muntinlupa City

Student Center for Life Skills Bldg., Centennial Ave., Brgy. Tunasan, Muntinlupa City

1
Applied Economics
First Quarter: Module 1
Introduction to Applied Economics

Department of Education *Republic of the Philippines

Applied Economics – Senior High School
Unit I – Introduction to Applied Economics
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Author: MARIA BLOSSOM S. VARNELL
Editor/Reviewer: FLORINDA M. BERROYA, MBA
Validator: EMELITAD. BAUTISTA, Ed D
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Department of Education *Republic of the Philippines

Introductory Message
For the Facilitator:
We may be in the middle of the most challenging times in history. We, Filipinos
are resilient and our bayanihan spirit would not allow this trial and tribulation to hinder
us to serve these young people who needs to be educated and prepare for their future.
The purpose of this module is to facilitate learning despite limitation. Prepared activities
are thoroughly designed to ensure that learners underwent sequential learning based on
the objectives set at the curriculum. This module is also designed to cater the needs of
the majority based on their skills set and abilities.
As facilitator, you’re tasked to properly orient learners on the appropriate use of
this module and to ensure team support to parents, elder siblings and other significant
adult that they know well how this will be used to support learners at home.
Please, remind learners to use answer sheet provided for their pre-test, self-
check exercises and post-test.

For the learner:

This module is designed as an aid for your perpetual learning of Applied
Economics. The course is prepared with theoretical discussion of the basic concept and
theories of the said subject. There are samples designed relevant with the actual
practical life situation. Activities which are deemed appropriate for skills and abilities
of Senior High School learners suitable with the curriculum guide executed from the
curriculum prepared by the Department of Education.
It will enable you familiarized yourself with the significance of the Economy in
our country and beyond. Allowing you to make connections with your actual life
experiences and understand what’s going on in the society, country and the world as a
whole. We are hopeful that this module will trigger your interest in involving yourselves
for noble cause of thinking beyond the frontiers of the comfort of your own home and
community seeing the essence of the simple acts and its impact to the greater whole.
Please refer to the separate answer sheet provided in every activities and
exercises that you need to accomplish.
“Remember that education is a matter of the heart, of which God is the sole master,
and we will be unable to achieve anything unless God teaches us, and puts the key in
our hands.” Don Bosco
COURSE PRE-TEST
Direction:
Choose the letter of the correct answer. Please write your answer on the sheet
provided.
1) It is a condition where are there insufficient resources to satisfy all the needs
and wants of a population.
A. Abnormality B. Greed C. Scarcity D.
Relatively

2) When a good is scarce compared to its demand.

A. Relative Scarcity B. Absolute Scarcit C. Scarcity of NeedsD.
Demand

3) What are the basic economic resources?

A. Man, nature, money C. Workers, Laborer, Salary
B. Land, labor, capital D. Owner, Capitalist, Building

4) It refers to the value of the foregone alternative

A. Costing B. Expenses C. Capital D. Opportunity
Cost

5) What is this branch of Economics that is concerned with the overall

performance of the entire economy?
A. Macroeconomics B. Microeconomics C. Social Science D. Demand
Curve

6) All societies are faced with the basic questions in the economy, which of the
following is considered basic economic problem?
A. What to produce and how much C. Who will produce the
supply?
B. When and where to produce D. Where to produce the
supply

7) It is a question on the production method that will be used to produce the goods
and services.
A. What technology to use C. Which resource mix
B. How to produce the goods D. How many items to produce

8) It talks about the target market of the goods

A. Distribution place C. Suppliers schedule
B. Consumers or customers D. Client needs
9) Economics is one significant subject for Senior High school, choose a reason
why it is important to study Economics.
A. It is for the students to know the essence on how to budget and properly
allocate the goods available.
B. It helps to understand the student to make rational decisions in spending
money
C. It enables the student to take a look on how Philippine economy
operates
D. All of the above.

10) As a student and soon to be voter, why do you think is it important for you to
choose educated politician who are in favor for the welfare of majority
especially the poor?
A. The leaders of our government have the power to monopolize the
Economic system.
B. They are so influential in the community that identifying with them
makes you famous as well.
C. They are governing bodies which formulates economic policies.
D. To avoid politicians who has the tendencies to manipulate the Economy
of the Philippines to protect their wealth.
After going through a module, you are expected to:
1. Demonstrates an understanding of economics as an applied science and its
utility in addressing the economic problems in of the country.
2. Analyze proposed solution/s to the economic problems using the principles of
applied economics
In this lesson you will have an understanding of the definition of Applied
Economics. There will be an added knowledge to your prior awareness of its essence to
your life as student, its effect to your family situation and its greater impact as a whole.
We will discuss the development of economics based on events of on history, people
behind it and their contributions. It will allow you to sharpen your understanding on
what it should have been and foresight on what will be.
You will have a depth knowledge on the economics as social science and applied
science which will make you appreciate the context of theories, formulas and the actual
life situation and events in the role of economics and impacts on the lives of people. As
an introductory part, you should familiarize yourselves with the basic economic concept
and the basic economic problem of the why’s of economic. These are significant terms
which you will need to remember as we go along the studies of economics.
Activity I. Family Economic Genealogy
Before the Activity
Materials:
Black pen, Family Economic Genealogy Layout, Blank white A4 bond paper (if
necessary)
Instructions:
1. This activity involves parents. They are encouraged to guide their students
upon doing this activity. Students needs to write the names of their
grandparents.
2. They should be aware of the complete name as well as the highest educational
attainment of their grandparents.
3. It is important to for them to know the profession, job or the nature of work of
their grandparents as well as their parents.
4. Students are allowed to draft their own Family Genealogy if there is a need for
more information and data they needed to indicate.
Family Economic Genealogy

________________________________ ________________________________
Grandfather’s Name: Grandmother’s Name:
__________________________________ __________________________________
Highest Educational Attainment: Highest Educational Attainment:
__________________________________ __________________________________
Job/Work: Job/Work:

________________________________ ________________________________
Father’s Name: Father’s Name:
__________________________________ __________________________________
Highest Educational Attainment: Highest Educational Attainment:
__________________________________ __________________________________
Job/Work: Job/Work:

________________________________ ________________________________
________________________________ Third Child’s Name:
First Child’s Name: Second Child’s Name:
__________________________________ __________________________________
__________________________________ Highest Educational Attainment:
Highest Educational Attainment: Highest Educational Attainment:
__________________________________ __________________________________
__________________________________ Job/Work:
Job/Work: Job/Work:
During the Activity
1. Parental guidance and presence are necessary in accomplishing this activity.
2. Children should be aware of the economic status of the family.
3. Information provided should be truthful and factual. Parents can explain reasons
behind their education and stories behind it whether it’s a story of victory or
defeat.
4. Provide all the necessary details and please avoid leaving blank space. Allow the
children to ask questions they would like to ask from their parents. Processing
should be read out loud at home.
After the Activity
1. Ensure that the student discovered something new from their parents and
grandparents.
2. Entertain questions from the nature of work their grandparents and parents
performed.
3. Staple answer sheet with name, grade level and section and contact number. Hand
over the answer sheet to the coordinator to bring it to school.

Rubric:
5 points for complete details
3 incomplete details
0 without details
Particulars 5 3 0 Subtotal
1. Grandparents name, highest
educational attainment, Job/work

2. Parents name, highest educational

background
3. Children education, job (if working)

Total Score (15 points)

Processing: (This should be read out loud after the student answered all the necessary
information provided.)
What is the importance of the activity in Applied Economics subject?
It is important to know the family economic genealogy for the students to be aware
of their own family history and economic background. As introduction to the subject, we
shall be discussing history of economics and their significant contributions. You will know
economic factors its impact on the wider scope which will be discussed on the macro and
micro economics which are the significant division on the studies of economics. Our course
title is Applied Economics, it is in this chapter that you will appreciate the differences of
economics as Social Science and Applied Science and how it affects your life in the smaller
setting. Despite the huge scope of economics, you as student and your family has an impact
on the past, present the where the economic status of the nation is leading to.
This subject aims to equip each student to be citizen capable of contribution for the
improvement of the economy. It will surely be possible with the help of their parents and
extended family who models from their daily life an actual event in their economy.

Lesson 1
Differentiate economics as social science and applied science.
I. Overall Perspective of Applied Economics

A. Definition of Economics
Economics –These words are Greek in origin oikos, which means household and nomos
meaning law and order of nemein which means to manage. Oikonomia or Oikonomus
means an orderly, systematic way of using household resources. The purpose of
Economics is the efficient allocation of limited or scarce resources.
Students have an impression that Economics is another Mathematical subject involving
problem solving, calculation and graphical interpretation. However, it is integrated with
human desires of satisfying its endless needs and wants.
Another significant focus of the studies of economics is the scarcity of resources. Here
comes the essence of economics in the situation where there are growing needs of the
people with the limitations. Economics enable the efficient use of scarce resources in
order to produce goods and services which will be allocated accordingly.

B. Brief History of Economics

When did people start to realize the importance of the studies of Economics?
Economics might be unheard during the Stone Age. People then were thinking only of their
survival. There were abundant resources by which people had easy access to food
whenever they were in need of it. Furthermore, the population was small while there were
abundant resources. People’s needs were basic and not as complicated and demanding from
what people nowadays had. On the other hand, economics started with the way of life that
they already had.
People then are hunters and gatherers; they hunt animals to have their meat as their
food. They exchange these meats from other hunters with fruits and vegetables. These
hunters usually don't stay in one place. They move to other places whenever they want.
Eventually, they realized that seeds from plants that they’ve got could be planted and later
grow. This involves the agricultural revolution where people started to settle in a village
and have farms near their houses to sustain the needs of the village people.
Another part of the agricultural revolution was that people realized that these
exchanges of food could also lead into exchange of goods. Farmers now turn into
manufacturers. People started to use Science Technology and Mathematics which enabled
them to develop huge manufacturing and processing of food which led to a surplus of food
and goods. These surplus of goods and food were more than enough to supply the needs of
the people. Therefore, small farm villages grew into cities and they were able to ship these
into other places and countries.
Moreover, another significant event in history which impacted the development of
economics was the industrial revolution. During this time machines were created and
developed. People then realized that machines could replace people from doing a huge
amount of work. Therefore, more goods were produced and manufactured. Since there
were more supplies of goods and food the system led to globalization where the produced
goods were sent to different countries and parts of the world.
During the 17th century Adam’s Smith’s Wealth of the Nation book clarified that
the government should have limitations of its power. Its main focus should be on defense,
peace and order, infrastructure and improvement of education. Its economic focus should
make the economy open and not the other way around. Moving on to the next century there
are remarkable ideas which emerge. Thomas Malthus ideas on the relationship between
supply of food and population. Socialism and communism were Karl Marx ideas against
capitalism. Alfred Marshall’s book Principles of Economics is the most valuable
contribution to the development of economics. It is in this book that he introduced the
concept of demand and the supply of products and its elasticity. In addition to the book
he’d written during the 19th century Money, Credit and Commerce it is in this book that
he introduced the time as a factor in analysis.
Based on the Encyclopedia Britannica, Nineteenth-century economists had devoted
their attention to two extreme types of market structure, either that of “pure monopoly”
(in which a single seller controls the entire market for one product) or that of “pure
competition” (meaning markets with many sellers, highly informed buyers, and a single,
standard product).

II. Development of Economics

A. Economics as Social Science

Earlier we define Economics as efficient allocation of goods and services. Now, let
us define first Economics as Social Science. According to Encyclopedia Britannica Social
Science is a discipline which deals with human behavior. The social sciences include
cultural (or social) anthropology, sociology, social psychology, political science and
economics. Once again, it is mentioned how relevantly interconnected these two
disciplines: economics and social science.
Economics before the application of mathematical computation and graphical
interpretation, it deals with human behavior. What is the importance of seeing Economics
as human behavior? In psychology, psychologists try to understand the human behavior
and dynamic of an individual person. A person behaves and has an attitude and character.
He/she interacts with people around. Its behavior has an impact with the encounter he/she
had met. It is more than a link or a chain but interaction that happens between people creates
specific impact with each person they encounter. We can see relationships within
interaction.
Relationships and interactions have an effect on society. Economics as a field of
discipline which to record, interpret and understand the effects of these interactions. it is
being observed in a scientific way so as to create concepts and theories which will later
help in addressing the results and issues on the human interaction that occur. Basically,
economics studies on the production, distribution and consumption of goods and services.

B. Economics as Applied Science

Applied Science applied existing knowledge to develop more practical applications
such as technology or inventions. Within natural sciences also called pure science
developed to predict and explain the phenomenon in the natural world. Applied science
uses basic science for practical endeavors. It uses technology although there might be
feedback between applied science and basic sciences in research and engineering.
As early as the 17th century two well-known people John Baptiste (1767-1832) and
John Stuart Mill (1803-1873) started the use of the term applied economics. Applied
Economics function basically identifies concepts, principles and theories which are
adoptable to real life situations and later project the outcomes.
Applied Economics as application of econometric theory and econometrics in a
specific setting. As one of the two sets of fields in economics it is typically characterized
by the application of the core, economic theory and econometrics to address practical issues
in a range of field including demographic economics, labor economics, business
economics, industrial organization, agricultural economics, development economics,
education economics, health economics, monetary economics, public economics and
economic history.
The process often involves a reduction on the level of abstraction of these frontiers.
There are a variety of approaches including not only empirical estimation using
econometrics. Input output analysis or simulation. But also, case studies, historical analogy
common and so-called common sense on the vernacular. This range of approaches is
indicative of what Roger Backhouse and Jeff Beadle argue is the ambiguous nature of the
concept with applied economics. It is a concept with multiple meanings, among broad
methodological distinctions one source places it either positive or normative economics
but the art of economics is lost as most economics do.

III. Importance of the Study of Economics

How will the studies of Economics affect the lives of the Senior High School students?
What is the significance of the studies of this subject? Would it make a difference if you
will study economics or not? These are the lingering questions in the mind of students who
are taking economics.
In a world where people are bombarded with lots of information and there is many
surfacing fake news, it is necessary that as a student you are equipped with skills on how
to identify knowledge and information which will be truthful and are not misleading.
Economics will enable you to think based on facts and information presented as it is based
on Science. It will increase your knowledge to identify credible information from false
information which has a hidden agenda and is basically harmful for the economy.

Studies of economics will give you a higher perspective by which the economy of
a country operates and how the government runs this huge household of our country. When
gross national product and gross domestic products are discussed actual facts and
information will be presented. It will also reflect the actual performance of the government
on how the leadership of the country affects the lives of the many whether they are rich or
poor.

As mentioned above, the government way of management affects the entire

economy of the country, the purpose of the studies of economics will impart knowledge to
each student on how their purchasing power and behavior affects the economy as a whole.
At the same time the smallest household where the common people belong are affected
with what’s going on in the bigger perspective and movement in the GNP and GDP of the
country.

Upon the perseverance of the studies of the economics students will realize as well
the significance of the quality of the people in a nation affects the country as a whole. On
the discussion of population, it is the population who decides on the answer to the basic
economic problem of society, what to produce; for whom to produce and how to produce.
It is obvious that the population demographics affect the economy of the country. It is on
the comparison with the total number of people educated and uneducated; employed and
unemployed; economic status gap whether rich or poor nor the ability to obey the laws and
how the government who implements the law enact the law. Are these people who enacts
the law and lead the people as a good model?

That is why the studies of economics is very important, students need to be informed
that as they take their academic strand, graduates of Bachelor in Science Major in
Economics as an option to their college courses plays a major role decision making in the
country as government employees and is capable to be part of international organization
such as United Nation and Asian Development Bank. These organizations play a
significant role in the betterment of society and a country as Philippines debt grew from
ADB.

Lastly, studies of economics are an introductory course for all future voters to choose
credible leaders who are compassionate, empathetic and qualified enough, capable of
considering the welfare of the majority of the population through sound decision making
setting aside personal agenda and are not power hungry and power playing. A student who
takes economics seriously are future assets of the country as they are contributing and are
considered assets as they would have a desire to contribute as an educated, responsible and
skilled citizen and not just a liability to society.

IV. Basic Economic Concept

Earlier, we speak about the infinite wants and needs of the people. It is another topic
to discuss differences between needs and wants. However different these subjects may be.
Resources are used to be able to respond to the unlimited wants and needs of the people
through the goods and services. People have infinite wants and needs. We can see the
obvious conflict between earth’s limited resources and man’s unlimited wants and needs.
Although people couldn’t have everything that they want and needs. Economics is the
study on how the scarce resources provided to us by the earth or the human provided
services or hand made goods to answer people unlimited wants and needs. The question is
how do we attend to this infinite need and wants using finite resources provided? Who gets
it? Who doesn’t?

Goods are tangible objects. It can be touched or grasps these are the material things
that you get whether its food fruits, vegetables, cooked meals, assorted drinks, electronic
gadgets mobile phone, iPad, laptop, vehicle and many more. Services are intangible things
are those that are can’t be touched like insurance, health care, haircut, spa, education and
many more. Paying for it but not being able to touch nor grasp. Wants are things that
people desire to satisfy pleasure. Yet, a person can still live without satisfying this urge.
Needs like food, shelter and clothing’s are necessities. People couldn’t survive without
satisfying their needs. They will put themselves into danger or risk of not being able to
survive if they will not satisfy these needs. Resources are goods used to produce goods.
As an example, if need bread you need flour therefore, you need wheat.

Scarcity there is not enough resources to satisfy the unlimited wants and needs of
the people. There is a corresponding price for every good and services that the people
would like to avail to satisfy one’s needs and wants. There is a “price tag”. Any goods,
services and item that has a price tag is scarce. Therefore, it is classified as economic goods
and services provided for the people. Price is the deciding factor who gets what? Who has
the capability to get these items? Everybody would like to buy vehicle. What kind of
vehicle? Is it car, jeepney or a van? If its 1,000 pesos then everybody would like to have
their own car but since it costs more than 500,000 pesos there are only few who would be
able to buy or purchase a car. There are few people who has the money to afford the
product.

Choice is very essential in making economic decision. Since people doesn’t make
infinite income, people need to make a choice whether they will purchase the good or
services. They have to make a decision on how to allocate their limited financial resources
and so always need to choose between alternatives too. Although there are those who got
“big bucks” meaning they earn a lot and has the capability to get what they want, the rich
people and the poor who has limited income to sustain the needs of their family. Later on,
we shall discuss about the purchasing power. At the moment, choice leads to another
economic concept which is the opportunity costs.

Opportunity Cost is what you gave up in order to have something else. You
decided to dine out for lunch during office hours. You’ve got an hour to decide which
restaurant you will eat at. You need to decide which food to spend your money with and
which to consume as well. In an hour, you decided to have lunch at Max restaurant meaning
you gave up on going to Gerry grill. You choose Max’s fried chicken therefore; you gave
up buying grilled seafood from Gerry’s grill. You have limited time and money and you
can’t be at the same place at the same time and you can’t be greedy to eat lunch twice.
Opportunity costs speaks about the value of forgone alternative you gave up for choosing
other products or services.

After Senior High School, you would make significant decision of either studying
in the university and pursue a college degree, acquiring life or technical skills or not study
at all. Which path would you take? If you pursue college degree, you surely will up to
another four to five years of hard work and endurance to acquire professional knowledge,
skills and a license. While, acquiring technical skills would also be helpful in performing
blue collar job and a year or two of studies, then you’ve got a minimum wage-earning job.
You also have a choice of not pursuing a college degree, nor acquire skills let fate decide
and see where your street-smart skills lead you. This is opportunity costs which path will
you take then? Which of these mentioned choices will you be able to grab? Which of these
will you let go?

Utility the value of usefulness and pleasure a consumer receives when they buy a
product. It is the very reason you are spending money on the goods and service that you
avail. Total Utility is the total satisfaction or happiness gained in consuming the product.
While the Marginal utility is the extra satisfaction gained while consuming extra of the
product. When you buy milk tea then you are happy and satisfied with the first
consumption. Let’s say you purchased 12 oz. and then you bought another 12 oz. then
added another satisfaction. However, for the third purchase you might be bloated and for
the fourth, you might get sick.

V. The Basic Economic Problem of Society

A. What are the goods and services to be produced?

Society has to decide which goods and services to produce. As a nation, we have
entrusted the government to make decisions on spending the money on the military or the
welfare of the people? Should you go agricultural or industrial or the technology industry?
What should be the priority which will be favorable for all considering the welfare of the
majority?

B. How should these goods and services be produced?

It is in this aspect that machinery, production process, raw materials and technology were
identified in order to produce the goods that would answer to the needs of the population.
While we are clear that services are provided by professionals and skilled workers.

C. For whom should these goods and services be produced?

The answer to this question identifies the customer demographics. Who will purchase the
goods and products? What is the age range, gender or economic status? There might be
considerations of religious background and other preferences.

VI. Positive Economics and Normative Economics

Positive economics is based on facts and information. This study is based on data
collection. Decision making is based on reliable facts gathered from experiment and actual
events. Statement when started with “if” and “then” further “what is” and “what was”. It
allows statements to be tested with facts and information.

Normative economics are opinions, personal judgements and values. Comparing the
statement, “People tend to shop when they have a salary increase.” from “Everyone should
go shopping.” The earlier statement is a positive statement while the latter is normative.
What made it obvious is the term used “should” and “ought” to be opinion based. Another
example of a statement which can be tested is whether it's a positive or normative
statement. “All rich people need to pay higher taxes.” This statement looks positive yet its
normative statement. How do we make it from normative to positive? Let us provide data
from the statement. “All rich people with an annual income of million pesos pay higher
taxes.”

VII. Branch of Economics

A. Macroeconomics
A. branch of economics which deals with the overall operation of the entire
economy of a country and its relationship and impact with the global perspective.
Macroeconomics is concerned with the overall flows of goods and services, its connection
with aggregates such as national income, national output, price level, government
spending, inflation, gross national product, gross domestic product, unemployment and
money supply. As it looks at the general economic operation of the country at the same
time analyzes the several areas and sectors on how these aggregates function and affects as
a whole.
It seeks to understand the big picture rather than detailed individual choices. In
particular, it studies the determination of the overall level of the economic activity of
unemployment, aggregate income, average prices, and inflation. Of the questions dealing
with technological change, production and consumption, of wages and earning are
microeconomics. Those dealing with unemployment, inflation, and differences among
wealth in the nation are macroeconomics.

B. Microeconomics
Microeconomics is a branch of economics that studies the decision of individual
households and firms and the way individual markets work. Microeconomics also studies
the way in which taxes and government regulation affect the allocation of labor and of
goods. (Michael Parkin)
Furthermore, is concerned with the behavior of individual entities such as the consumer,
the producer, and the resource owner. It is more concerned on how goods flow from the
business firm to the consumer and how resources move from the resource owner to the
business firm. It is also concerned with the process of setting prices of goods that is also
known as Price Theory (Dinio and Villasis).
It is in microeconomics where the choice of the individual person was studied so as to
understand its impact on the bigger perspective of economics. Human choices, decision
making and the allocation of resources are being determined in the scenario. It doesn’t
focus on the external factors that occur in the market rather it explains changes in a
particular situation and condition.
As an example, the manufacturing company. It then would study how it can maximize
its production with lesser production costs, but at the same time be able to sell the product
at a reasonable price to be able to compete in the market. Microeconomics has a direct
impact on the operations of several companies.
Fill in the blanks with the necessary information to complete each statement.
1. Economics came from the Greek word ___________ which means household and
_______________ meaning law and order.
2. People are _________________ and _________________ they hunt animals to
have their meat as their food.
3. _____________________ where people started to settle in villages and have farm
near their houses to sustain the needs of their people.
4. People started to use ___________________ and ____________________ which
enabled them to develop huge manufacturing processes.
5. During __________________, people realizes that machines could replace people
from doing a huge amount of work.

Read the following statement carefully and identify whether it tells Economics as
Applied Science or Social Science.
1. Economics observe behavior and responses of people in specific political
condition.
2. It is necessary to see facts, data and graphical interpretation so as to make sound
decision making.
3. Involvement of Mathematical computation and calculation.
4. Input output analysis or simulation.
5. It records interpret and understand the effects of interactions so as to create
concepts and theories
Choose the letter of the correct answer.
A. Multiple Choice

1. Which branch of economics deals with the overall operation of the entire economy
of the country and its relationship and impact with the global perspective?
A. Macroeconomics B. Microeconomics C. Applied Economics

2. A kind of economics which is based on facts and information where decision

making rely on facts, experiments and actual events.
A. Applied Economics B. Normative Economics C. Positive Economics

3. Which branch of economics deals with the studies of the individual households
and firms and the way the individual market works?
A. Applied Science B. Microeconomics C. Normative Economics

4. What is the basic economic problem of society?

A. What goods and services to produce; how to produce and for whom?
B. Who owns the business; what product to produce and who will buy the
product?
C. Scarcity of resources; greed of people and power-hungry leaders

5. How do you call the value and satisfaction you get from purchasing a product?
A. Cost B. Customer satisfaction C. Utility

6. When you dine out with your friends, you have eaten cheeseburger. Yet, you
weren’t satisfied so you bought another piece of it. You were full but you were
still craving for the taste and so you bought the third one. How do you call the
extra satisfaction gained while consuming extra of the product?
A. Greediness to product B. Marginal Utility C. Total Utility
7. You went to the grocery store and bought your monthly grocery for your family
consumption. However, you realized that your budget is not enough to buy a
gallon of ice cream then, you still need to buy a dozen of egg. Based on economic
concept, how do you call this giving up of ice cream and choosing a dozen of egg?
A. Scarcity B. Opportunity Costs C. Utility

8. How do you call these tangible objects which you are purchasing to satisfy your
needs?
A. Goods B. Services C. Product

9. A student has a thousand peso. He is thinking how to spend his money and he
decided to buy grilled chicken, pork and a salad for dinner instead of buying his
cellphone accessories. Which of the following choices is the most appropriate
answer based on his/her experience?
A. Responding to Needs B. Responding to Want C. Motivation

10. Which part of the history of economics where people shifted to manufacturing and
processing of goods instead of the traditional farming?
A. Science Technology B. Industrial Revolution C. Agricultural Revolution

B. Essay Writing

Discuss the importance of the studies of Economics. 10 points.

Rubric:

Particulars Number of Points

1. Define economics using his/her own 3 points
words.
2. Cites economic terms and gave samples 3 points
based on his/her personal experiences.
3. Show optimism by mentioning shared 4 points
family stories of hope and perseverance.

Total 10 points
Performance Task:
Follow up on Family Economic Genealogy. Given a chance to write your future
economic genealogy. Write your own down to the third-degree generation. Assume you
are the grandparent. How would you like your Family Economic Genealogy to look like?

References:
Encyclopedia Britannica

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