SCBMCI LEARNING MODULE

APPLIED ECONOMICS
(GAS XII)

PERIOD: Quarter 1 – Week 1 and 2

LESSON

1. NATURE AND SCOPE OF ECONOMICS

2. ECONOMIC RESOURCES OR FACTORS
Materials: reading texts, paper and pen

LEARNING COMPETENCIES
By the end of the module, you will be able to:
 explain the nature and scope of economics,
 determine its fields: the micro and macroeconomics,
 resourcefully use the different resources in the production of goods and services, and in
real world, efficiently consume these finished products.

PRE-ASSESSMENT TEST
A. Direction: Let us check your knowledge to our topic. Kindly arrange the following words. These
are the terms you commonly encounter when you make decisions of going to the market.
Examples of these items are given on the right column. Write your answer on the space provided.
1. MIRECOOCNOMSCI ________________________ individuals and industries
2. TENAGILBDSOOG __________________________basic goods/commodities
3. SARCITYC _________________________________shortage in supply
4.UXDOOSLUGYR_____________________________expensive jewels and gems
5. CDAOTOASAGIP ____________________________baking machines

B. Direction: Kindly choose the letter of the correct answer. Encircle your answer.

1. The physical effort of the manpower to produce the protective devices of the frontliners describes
which factor of production?
a) Land b) Capital c) Labor d) Entrepreneur

2. The great ideas, concepts and drive of the production managers to produce something new describe
which factor of production?
a) Land b) Capital c) Labor d) Entrepreneur

3. The computers of the production manager in an office are what kind of goods or products?
a) Consumer goods b) Either consumer goods or capital goods c) Capital goods d) Economic goods

4. Which best describes economics as a social and an applied science?

a) The study of things we need to survive
b) The study of how people make choices when they are faced with an unlimited supply of resources
c) The study of human behavior
d) The study of how buyers make choices when there is limited supply of resources

5. Which of the following are examples of human needs?

a) Water and a place to live like houses b) Iced caramel macchiato frappuccino
c) Flat screen televisions d) Laptops and computers

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CONTENT/TOPIC

LESSON 1: Nature and Scope of Economics

According to Molina, J. A. & Nadal, G. J I (2020), 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 have 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
•Studies of markets of
good and services Macroeconomics
•Focuses of the behavior •Studies the economy as a
of individual in the market whole
•Explains how and why •Focuses on aggregate
these units make indicators (such as
economic production, employment,
etc.)

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

BASIC TERMS 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.
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 TANGIBLE GOODS –material goods INTANGIBLE GOODS – when they are in the form of
or commodities. services. Those rendered by doctors, engineers, doctors and
other professionals

Goods may also be classified according to use.

CONSUMERS GOODS – goods for the ultimate CAPITAL GOODS or INDUSTRIAL GOODS
consumption of the consumers. - used in the production of other goods and
Ex.: toothpaste, services.
bath soap, etc. Ex.: buildings,
machinery,
equipment

Source:www.watsons.com.ph Source: www.alarmy.com

ESSENTIAL GOODS- used to satisfy the basic LUXURY GOODS – goods man may do
needs of man without, but may give comfort and satisfaction.
Ex: foods and medicine Ex., perfume, cakes; chocolates, expensive cars.

Source:ww
w.quora .com

Source: www.msn.com
www.theconversation.com
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 is 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. Source: www.kindpng.com

LESSON 2: ECONOMIC RESOURCES OR FACTORS

In the article of Nowaczyk, J (2020) on Identifying the Factors of Production, he defined economic
resources as 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 resources available to create supply
such as raw materials that comes from the ground.
It can be a nonrenewable resource; commodities
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 shopping center is a capital good.
Labor is the work done by people- education,
skills, and motivation and productivity.
Productivity measures how much each hour of
worker time produces in output. Workforce
receives wage for his labor.

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 Sources:www.mas
terclass.com ,
www.vengage.net

CAPITAL as a Factor of Production
Capital or capital goods are capital – the money
that companies used to buy resources; manmade
objects like machinery, equipment, and chemicals
that are used in production. For example, capital
goods include industrial and commercial
buildings. A commercial aircraft is example of a
capital good.
Sources:https://www.toppr.com
www.stori.com
ENTREPRENEURSHIP as a Factor of
Production
Entrepreneurship develops an idea into a
business. An entrepreneur combines the other
three factors of production to add to supply. The
most successful entrepreneurs are innovative and
risk-takers. The income entrepreneurs earn is
profits.

Sources:www.courses.lu
menlearning.com
Source: www.financialexpress.com

www.smallbusiness.chron.com
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

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ASSESSMENT

TASK A.
Direction: Determine which factor of production is needed in the following problem. Write your answers
on the work sheet provided at the back of the module.

1. The ABM Manufacturing Co. hired a gardener. He uses a lawn mower for landscaping. Which
factor of production would you consider this machine?

2. The owner of the company withdrew cash for the salaries of the employees. Which factor of
production would you consider cash on hand?

3. The top manager of the firm said “the great ideas, concepts and emotional determination of a
person 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?

4. The farmers planted pineapple cuttings in the vacant area located in their locality. Which factor
of production would you consider a pineapple plantation?

TASK B.
Multiple-choice
Direction: Choose the letter of the correct answer. Write your answers on the work sheet provided at the
back of the module.

1. Mrs. Nenita De Jesus purchased basic goods like vegetables and groceries for the consumption of her
family. These goods are:
a. Consumers goods b. Capital Goods c. Luxury 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 b. Luxury Good c. Capital Good d. Economic Good

3. ABM Computer shop purchased additional 10 units of computer for the business. These goods are
called: a. Consumers goods b. Luxury Goods
c. Capital Goods
d. Economic Goods

4. Which is not considered as tangible good?

a. Cell phone b. Mask c. Sack of rice 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 economical 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.

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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 monitor ethical manners of employees.
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

PERFORMANCE STANDARD
Direction: Please perform independently. Pick all the goods and classify them accordingly. Your mother
went to the market to shop goods for the family. She purchased the following goods. Canned goods;
bread; sacks of rice; meat; vegetables; toothpaste; bath soaps; perfumes; wrist watch; aircon to ventilate
her store and coffee maker for her store. Write your answers on the work sheet provided at the back of the
module.

REFLECTION.....
In this lesson, I learned that

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REFERENCES:

Sirin Çaki S (2019) 10 Basic Office Equipment Every Business Needs. Retrieved on June 01 2020 from
https://www.market-inspector.co.uk/blog/2017/01/10-basic-office- equipment-for-starting-a-business

Enriquez, H C (2020). Basic Economic Problems of the Country. Retrieved on June 01 2020 from
https://www.slideshare.net/HannahCullen/lesson-3-basic-economic-problems

Lamarco, N. (2018) The Socioeconomic Factors Affecting Small Businesses Retrieved on June 01
2020 from https://smallbusiness.chron.com/socioeconomic-factors-affecting-small-businesses-73234.
html https://www.slideshare.net/HannahCullen/lesson-3-basic-economic-problems

Molina, J. A. & Nadal, G. J I (2020) Concept and Scope of Economics. Retrieved on June 01 2020
from http://personal.unizar.es/jamolina/Unit1.pdf

Nowaczyk, J. (2020 ).Four Factors of Production: Land, Labor, Capital & Entrepreneurship
Retrieved on June o1 2020 from https://study.com/academy/lesson/four-factors-of-production-land-labor-
capital-entrepreneurship.html

Pretty, N (2020). Basic terms in Economics. Retrieved on June o1 2020 from

https://www.slideshare.net/nikspretty/basic-terms-in-economic

Portillo, E.F (2017). Basic terms in Economics retrieved on June 01 2020 from
https://www.slideshare.net/enaportillo13/basic-terms-in-economics

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 Serapion C. Basalo Memorial Colleges Inc.
Senior High School Department

WORKSHEET IN APPLIED ECONOMICS

Name: ____________________________ Grade and section: ____________________

Teacher ____________________________ Date submitted: _______________
:

TASK A:

1. _________________________

2. _________________________

3. _________________________

4. _________________________

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 Serapion C. Basalo Memorial Colleges Inc.
Senior High School Department

WORKSHEET IN APPLIED ECONOMICS

Name: ____________________________ Grade and section: ____________________

Teacher ____________________________ Date submitted: _______________
:

TASK B:

1. _________________________

2. _________________________

3. _________________________

4. _________________________

5. _________________________

6. _________________________

7. _________________________

8. _________________________

9. _________________________

10. _________________________

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 Serapion C. Basalo Memorial Colleges Inc.
Senior High School Department

WORKSHEET IN APPLIED ECONOMICS

Name: ____________________________ Grade and section: ____________________

Teacher ____________________________ Date submitted: _______________
:

Performance Standard A:

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