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Republic of the Philippines, Department of Education National Capital Region, , DIVISION OF CITY SCHOOLS – MANILA, Manila Education Center, Arroceros Forest Park, Antonio J. Villegas St. Ermita, Manila, , Applied Economics, Basic Economic Problems, and How Applied Economics, Solves Economic Problems, ?, , ?, , Quarter 1 Week 2 Module 2, Learning Competency:, Utility and application of Applied, Economics to solve economic issues and problems

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HOW TO USE THIS MODULE?, Before starting the module, I want you to set aside other task/s that, may disturb you while enjoying the lessons. Read the simple instructions, below to successfully enjoy the objectives of this kit. Have fun!, 1. Follow carefully all the contents and instructions indicated in every, page of this module., 2. Write on your notebook the concepts about the lessons. Writing, enhances learning that is important to develop and keep in mind., 3. Perform all the provided activities in the module., 4. Let your facilitator/guardian, answer key card., , assess, , your, , answers, , using, , the, , 5. Analyze conceptually the post-test and apply what you have learned., 6. Enjoy studying!, , PARTS OF THE MODULE, , , , , Expectations - These are what you will be able to know, after completing the lessons in the module., Pre-test - This will measure your prior knowledge and the, concepts to be mastered throughout the lesson., Looking Back to your Lesson - This section will measure what, learning and skills did you understand from the previous, lesson., Brief Introduction- This section will give you an overview of, , , , the lesson., Activities - This is a set of activities you will perform with a, , , , , partner., , , , , Remember - This section summarizes the concepts and, applications of the lessons., Check your Understanding - It will verify how you learned, from the lesson., , , , Post-test - This will measure how much you have learned from, the entire module, , 2

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LESSON, 2, , Utility and Application of Applied Economics to, Solve Economic Issues and Problems, EXPECTATIONS, , Specifically, this module will help you to:, identify the basic economic problems, , illustrate how applied economics can be used to solve economic, problems, , construct framework to solve the economic problem, , solve problems on economic activities, , , , , , , Let us start your journey in learning, more on the resources of production and, possible issues on the production of goods and, services. Are you excited to answer the Pretest? Smile and Enjoy!, , PRE-TEST, , Part I. Identification: Direction: Please read and analyse the questions, carefully. 1) What do you think were the resources used to produce the, products (dresses)? 2) What were the issues/problems in the production, of the products?, Resources In the Issues/Problems in the, Production (dress), Production, 1, 2, 3, 4, https://int.search.myway.com/search/AJimage.j, html, , Part II. Matching Type: Match Set A or the central economic, issues and problems to Set B or the description of economic issues., SET A, ____1. What to produce, , SET B, A. the legalities of the production, , ____2. How to produce, , B. the nature of goods to produce, , ____3. Whom to produce, , C. the allocation of the, among members of the society, D. the methods of production, , ____4. What provision in the, production of products, , 3

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LOOKING BACK TO YOUR LESSON, , Great, you finished answering, the questions. You may request, your facilitator to check your work., Congratulations and keep on, learning!, , Last topic, we discussed the nature and scope of economics; the two fields of, the study which include micro and macroeconomics. We also discussed the, kinds of goods and the economic resources to produce the goods. Let’s check, your retention of our past lesson., Part I Multiple Choice., Directions: Kindly choose the letter of the correct answer. Encircle your answer., 1. The physical effort of the manpower to produce the basic needs of the, consumers, describes which factor of production?, a) Land, b) Capital, c) Labor, d) Entrepreneur, 2. The initiative and creativity to produce something new describes which factor, of production?, a) Land, b) Capital, c) Labor, d) Entrepreneur, 3. The equipment of the coffee shop to produce cups of coffee, 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 of the following best describes economics as a social and an applied, science?, a) The study of products we need to survive, b) The study of how customers make choices when there is unlimited, supply of resources, c) The study of human personalities, d) The study of how buyers make choices when there is limited supply, 5., , The following are examples of customers’ basic needs., a) Water and shelter, b) Iced tea, c) Laptop and cellular phones, d) Expensive bags, , Part II. Matching Type, Direction: Please match the resources with the statements., A) Land, C) Labour, B) Capital, D) Entrepreneurship, 1. ________________The idea for a car that runs on a rocky road, 2. ________________The crude oil used by ABM Firm to produce gasoline, 3. ________________The machine used by Mang Jose, a tailor to stitch PPEs, 4. ________________The manpower to build bridges and houses, 5._________________Technicians who repair computers, 4

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BRIEF INTRODUCTION, In the article of Forbes Custom (2017), The Philippines: Asia’s New, Economic Powerhouse, the Philippine economy has transformed into one of, Asia’s most dynamic economies on the back of fast-paced Gross Domestic, Product (GDP) growth.(www.forbes.com). For the longest time, it has all the, opportunities to sustain its growth and stability. However, due to the problem, on pandemic, at present, it is suffering from economic depression. The issue of, scarcity on supply due to limited resources, but unlimited wants, is the, ultimate economic problem. Scarcity implies a limited quantity of resources, needed in production., Guru, S. (2020) mentioned, the main issues on production include the, products to produce; how to produce these products and for whom to produce, the products and how to make the economy grow. Economics, therefore, is, concerned with the allocation of resources to make the most efficient use of, these resources., , The Four Basic Economic Problems, In the article of Guru, S. (2020) Basic Central Problems Faced by an, Economy, there are basic problems common to all economies. In terms of, production, common to all countries is the problem on scarcity. This arises, because the resources are limited and have alternative uses. This problem gives, rise to four basic problems of an economy., In this topic, we will look into these basic problems of what to produce,, whom to produce, how to produce and what provisions on production for, economic growth. As we said earlier, economics can be a tool to solve these, economic problems. Economists formulate strategic solutions to economize the, problems such as economic growth or the ability to produce goods and, services, reduce expectation or the ability to reduce our wants such as, lessening consumption, and improve the use of resources or the capacity to use, our existing resources wisely., , http://www2.harpercollege.edu/mhealy/eco212i/lectures/5es/5es.htm, , 5

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Learning Module for Applied Economics, , What to Produce?, If there is scarcity of goods in a, society, the firms have to make, wise, decision, on, what, goods/service should be produced, and determine the quantity to, produced. For example, which do, we produce more, masks or, canned goods? But we need, capital goods like machines, or, consumer goods like laptops. The, society must decide the type and, quantity of good/service to be, produced to meet the immediate, needs of the society., , How to Produce?, The production of goods or, services needs effective methods, and processes. For example, you, can produce PPEs using sewing, machines; sardines using aqua, resources like fish and land, resources like tomatoes. The, production requires more labor, and capital investment., , BASIC ECONOMIC, PROBLEMS OF THE, COUNTRY, For whom to Produce?, , What provision/laws should be, made for economic growth?, A society uses all its resources for, current consumption. If a society, uses all its resources, then its, production capacity will not, increase. The standard of living of, the people and the income of the, workforce remain constant until, the standard of living will decline in, the future. The society must decide, also on the part of the resources to, be saved for future progress, , The society would always, consider the immidiate, beneficiary of the goods. For, example when we produce, masks and PPEs we suppose to, produce first these for the, frontliners of COVID Pandemic, fight. A society decides on the, distribution of the goods, and services among the, members of society who need, them the most., , APPLIED ECONOMICS ON BASIC ISSUES AND PROBLEMS, Applied Economics seeks to solve the problems on scarcity. This, happens when human wants for goods and services exceed the available, supply. In a modern economy, it is evident that a division of labor happens, when people earn income by specializing in what they produce. They will use, that income to purchase the products they need or want every day (BC Campus, 2020)., 6

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Learning Module for Applied Economics, , Also, in the division of labor, it allows workers and firms to produce, more. This is because: a) agents focus on areas of advantage due to natural, factors and skill levels; b) the agents learn and invent; c) the agents take, advantage of economies of, scale., , Division, , and, , specialization of labor only, work when individuals can, purchase what they do not, produce, Applied, , in, , markets., , economics, , then, , helps you understand the, basic problems facing the, world today. It helps you, become a well-rounded thinker. And most importantly, it prepares you to be a, good citizen., , (Credit: Nina Hale/Flickr Creative Commons), https://opentextbc.ca/principlesofeconomics/chapter/1-1-what-is-economics-and-why-is-it-important/, , ACTIVITIES, , Activity No. 1 Let’s analyse this passage. This will help you understand our, new topic on the basic economic issues and problems in the production of, goods and services. Are you ready? If yes, you may now analyse the situation., Problem 1 You read about a traveling situation in which some airline, passengers seem to get a “fast pass” through security and move effortlessly, through the boarding process, while other passengers are waiting in long lines., In this example, the travellers who are moving quickly through the boarding, process are probably:, a), VIP passengers waiting longer more in an inconvenient lines, b), Passengers who value time and convenience and are willing to pay, additional fees for the privileges and other services, c), Loyal passengers whom they knew beforehand in which line to go to, avoid delays and inconveniences, d), Government officials who are seated in the executive area, , 7

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Learning Module for Applied Economics, , Activity 2. Multiple Choice (with critical thinking analysis), Direction: Please encircle the correct answer., 1., Scarcity of resources in your locality (Manila) is evident. Only available, are fabrics, electric sewing machines and skilled workers. The government said,, you are only allowed to work from home to be safe and free from infection of, viruses. Which items most likely you need to produce?, a), b), c), d), , PPEs, Canned goods, Sacks of rice, Sewing machines, , 2., Manila is ranked 2nd in the most cases of COVID patients in Metro, Manila. The city needs urgent services of the medical frontliners in curing the, increasing number of patients. There is scarcity in the raw materials for, production. To whom would you produce first the available resources?, a), Soldiers, b), Police Officers, c), Medical Frontlines, d), Your family, 3., There is an urgent need of PPEs by the medical frontliners in the City of, Manila due increasing number of COVID patients every day. Which is not true, of producing the products (PPEs)?, a., b., c., d., , Import from China, TESDA students and skilled workers may produce the PPEs, Manufacturers/suppliers may supply the PPEs, Export PPEs to Japan as gross national products, , 4. The ABM Manufacturing Company decides to produce more on liquid soap, than bar soap to supply the growing demands in the market. It solves issues, on:, a., b., c., d., , Whom to produce, How to produce, How much incentive, What to produce, , 8

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Learning Module for Applied Economics, , Activity 3 Directions: You may collaborate and communicate with your friends, and family members in doing the tasks. Currently, we are dealing with scarcity, on units of bicycles. Below is a framework showing the solution on how to deal, with economic issues on meeting the products., Question: As an agent of the economy, how will you deal with this scarcity?, Choices are given below. Place them in their proper columns as to economic, growth; and improve the use of available resources and reduce expectations., , http://www2.harpercollege.edu/mhealy/eco212i/lectures/5es/5es.htm, , Answer, , a), , b), , c), , __________________, , _____________________, , __________________, , _________________, , _____________________, , __________________, , __________________, , _____________________, , __________________, , __________________, , _____________________, , __________________, , __________________, , _____________________, , __________________, , ability to produce goods and services; reduce our wants or lessening, consumption; use our existing resources wisely; don't waste limited resources;, productive efficiency; allocates efficiency; full employment and equity of, resources; and reducing wants, , 9

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Learning Module for Applied Economics, , REMEMBER, , , Economics can be a tool to solve economic problems on the, production of goods and services., , , , Production is the process by which resources are transformed into, useful forms., , , , Resources are things provided by nature that can be used directly, or indirectly to satisfy human needs., , , , The basic economic problems on production includes: what to, produce, whom to produce, how to produce and what provisions on, production for economic growth., , , , Strategic options/decisions to economize the problems include:, economic growth – ability to produce goods and services; reduce, expectation- reduce our wants - lessening consumption; improve, the use of resources - use our existing resources wisely; don't, waste the limited resources; productive efficiency; allocate, efficiency; full employment and equity of resources; and reduce, expectations – reducing wants., , , , , , , , , , CHECK YOUR UNDERSTANDING, Fill in the Blanks., Directions: Please read and answer the following sentences, , , of goods and services: a)__________________; b)_______________________;, , , , c) ________________; d) __________________., , , , , Among nations, these are the common economic problems on production, , Economics can be a tool to solve the fundamental problem in economics, which is _________________ in the production of goods and services., , , , The strategic solutions/decisions/options to economizing problems, include a)________________; b)___________________; and c)_______________., 10

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Learning Module for Applied Economics, , POST-TEST, Part I TRUE or FALSE, , Directions: Please write TRUE if the statement is correct and FALSE if the, statement is incorrect., 1., , _______________Scarcity in goods and services happens if the resources in, the production are inadequate or scarce., , 2., , _______________Customers must choose among several alternatives if, scarcity exists., , 3., , ________________ Income inequality is the gap in income that exists, between the rich and the poor customers willing to buy, the same products., , 4., , ________________Shortage of goods and services is an economic problem;, and shortages are always constant, , 5., , _________________The Build Build Build Program by the government aims, to help improve the infrastructure projects and other, programs of the country., , Part II Multiple Choice. Choose the letter of the correct answer., 1., The fundamental economic problem that must be solved efficiently, a), Scarcity of resources, b), Health system, c), Surplus of demands, d), Export policies, 2., , Economists point out that scarcity must be addressed to protect the, a) The poor but not the rich, b) Both the poor and the rich, c) Neither the poor nor the rich, d) The poor but never the rich, , 3. What two factors contribute to scarcity in the production of goods and, services?, a) Unlimited resources and limited wants, b) Unlimited resources and wants, c) Unlimited wants and limited resources, d) Limited resources and wants, 11

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Learning Module for Applied Economics, , 4. If there is scarcity in public transportation, what should the learners do?, a) Home based learning is an alternative choice for access to education, b) Stop learning while waiting for transportation shortage to be solved, c) The government must import units of car from neighbor countries, d) All choices are applicable, 5. The economists describe the amount of resources in an economy as:, a) Always constant, b) Can never decrease or increase, c) Unlimited at any moment in time, d) Limited at any moment in time, , REFLECTIVE LEARNING SHEET, , Every society must make choices, about which essential should be allocated, with the available but limited resources, for production. In most cases, where, there is scarcity in the production of, necessities, or where there are no enough, funds to accomplish everything for the, satisfaction of everyone, the society has to, make better choices., Today, we have to adjust to the, new normal way of living. There is, scarcity in the production of goods and, services for everyone’s needs and wants., Everything in this world has limitations., Rich and poor, all individuals…”ceteres, paribus….” “all else are equal”….., Regardless of your economic, status, which is more important to you,, health or unlimited supply for your, wants?, , _________________________________________________________________________, _________________________________________________________________________, _________________________________________________________________________, _________________________________________________________________________, _________________________________________________________________________, _________________________________________________________________________, _________________________________________________________________________, _________________________________________________________________________, _________________________________________________________________________, , 12

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Learning Module for Applied Economics, , Name______________________________Year/Section_______________Date___, Teacher____________________________School_____________________________, , Worksheet (Additional Activity), Let us assess your creativity and love for nature., , Directions:, , Please read carefully., , Despite the limited resources and, , scarcity of products for our consumption, today, we still want to achieve, maximum satisfaction. We make use as few resources as possible, allocate our, resources where they are best suited, and use the appropriate technology or, materials and produce the right goods and services., Given the resources below, please select the most efficient products that could, be produced to maximize production and help the economy., Raw material, , Finished Product/Services, , 1. Steel:, , casino tokens or public cars?, , ______________________, , 2. Crude oil:, , gasoline or kerosene?, , ______________________, , 3. Cars:, , small cars or SUVs ?, , ______________________, , 4. Flour:, , cakes or breads?, , ______________________, , 5. Cloth scraps:, , doormats or washable masks, , ______________________, , 6. Fruits:, , canned juices or fresh fruits?, , ______________________, , 7. Vegetables:, , fresh or frozen vegetables? ____________________________, , 8. Coconut oil:, , cooking oil or expensive lotion?, , _______________________, , 9. Sources of air: electric fans or units of aircon?, , _______________________, , 10. Imports:, , Choice, , PPEs or clothes from Korea? __________________________, , 13

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ANSWER KEY, PRETEST:, Part, 1. Land, 2. Labor, Part II, 1. B, 2. D, LOOKING BACK TO YOUR LESSON:, Part I, 1. C, 2. D, 3. C, Part II, 1. D, 2. A, 3. B, , 14