OBJECTIVES

At the end of the lesson, the learner

is expected to:
Define basic terms in Applied
Economics
 Explain why Economics became
a Social Science
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PRE-TEST
I. True or False: Carefully read each sentence and
determine if the sentence is TRUE or if the sentence is
FALSE.

1. Economics comes from the Greek word oikonomia

which means household chores.
2. Economics is considered a field of social science.
3. Economics is relevant because it is part of
everybody’s life.
4. There are three (3) divisions of Economics, the
microeconomics, the macroeconomics and the home
economics.
5. As a science, Economics is related to other sciences.
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II. Essay. Answer the following using five (5)
sentences and above.

a. As an individual, what do you

think is the essence of
studying economics?

b. How do you apply economics

in your household?
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WHAT IS ECONOMICS?

Economics is the study of social behavior

guiding in the allocation of scarce
resources to meet the unlimited needs and
desires of the individual members of a
given society.
ECONOMIC
DEFINED
From the Greek words Oikos meaning household and
nomos meaning management
= household management

The wise production and use of wealth to meet the

demands or needs of the people

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 ECONOMICS
AS DEFINED BY
AUTHORS OF
ECONOMICS BOOKS
4.
5. Paul Samuelson (Economics)
“The study of how people and society end up choosing, with or
with or without use of money, to employ scarce resources that
that could have alternative uses to produce various
commodities among various persons and groups in society.”

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7. Hall and Loeberman (Macroeconomics: Principles and
Applications)
“The study of choice under the condition of
scarcity”

8. Bernardo Villegas (Guide to Economics for Filipinos)

“A social science that studies and seeks to allocate
allocate scarce human and non-human resources
resources among alternatives in order to satisfy
satisfy unlimited human wants and desires.”
 COMMON WORDS AMONG
DEFINITIONS…
• Scarcity- a situation wherein the amount of something
available is insufficient to satisfy the desire for it.

• Resources-The labor, capital, land and natural

resources and entrepreneurship that are used to
produce goods and services.

• Unlimited – without limits, infinite

• Wants –desires
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ECONOMICS AS A STUDY OF
WEALTH
The earlier definition of economics as
the science of wealth-getting and
wealth-using implies that the
motivation of the process of wealth
accumulation is the utilization of wealth
for the individual’s satisfaction and
society’s welfare.
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 ECONOMICS AS A STUDY OF
MAKING CHOICES

In everything we do, whether we

produce or consume, whether wealth-
getting or wealth-using, we make
decisions and these decisions are based
on alternative choices.

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 ECONOMICS AS A STUDY OF
ALLOCATION
The definition of economics as a social
science that deals with the study of
allocation of scarce resources to answer
the unlimited wants.

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Major
A
A
A
TYPES OF ECONOMICS:
1. Household Economics – most common use of
economics is for the family. At this level, anyone
who knows the economic principles will be able to
improve the running of the household.

2. Business Economics – when a person or group of

persons begins to work, they come under the system
of business economics in their workplace. In this
type, you deal with the rent, salary, profits and
others.
3. National Economics – Economic factors of problems
affecting the whole nation. Deals with the
management of income, expenditures, wealth or
resources of a nation.

4. International Economics – The highest stage of

economic activities involving the business of one
country with other countries like trade, tourism,
exchange rates.
Is Economics a science?
Support your answer.

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ECONOMICS AS A SCIENCE
• Is a science because it is an organized body of
truth, coordinated, arranged and systematized
with reference to certain general laws and
principles.(Observation, Formulation of
theories, Gathering of data, Experimentation,
Conclusion, Generalization)
• Economic analysis seeks to explain economic
events using some kind of logic based on a set
of systematic relations.
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 ESSENCE OF STUDYING ECONOMICS
• To understand the world better
Applying the tools of economics can help you
understand global and cataclysmic events such as
wars, famines, epidemics, and depressions. Economics
has the power to help us understand these
phenomena because they result from the choices we
make under the condition of scarcity.
• To gain self-confidence and become wise decisions
makers
Mastery of economics will help you to
understand how things work in your society thereby
“feeling equipped” ABM_AE12
• To achieve social change and contribute to National
Development
Economics can help us understand the origins of
origins of serious social problems such as:
unemployment, hunger, poverty, disease, child abuse,
drug addiction, violent crime. It will also explain why
previous efforts to solve these problems have failed,
and help us to design new, more effective solutions.

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• To help prepare for other careers
Economics has long been a popular college
major for individuals who are intending to work
in business. But it has also been popular among
those planning careers in politics, international
relations, law, medicines, engineering, etc. This is
for good reason because practitioners in each of
these fields often find themselves confronting
economic issues.
Historical Development of Economics

HUNTING AND FISHING

PASTORAL STAGE

AGRICULTURAL STAGE

HANDICRAFT STAGE

INDUSTRIAL STAGE

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 THE DEVELOPMENT OF PHILIPPINE
ECONOMICS

Pre- Digong
Hispanic Gov’t

Fill in the economic development of the Philippines

and the significant policies in each stage.

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Problems and Application:
How much did you spend on the last
item you bought for yourself?
What other things could you have
bought with the same amount of
money? Why didn’t you buy the other
other items you just listed?

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Activity : Newspaper Clipping
Cut an article from any leading newspaper
under the business section. Identify the article
article whether Microeconomics or
Macroeconomics. Discuss and be able to
explain why the article falls under the
Microeconomics or Macroeconomics. (Note:
(Note: Be able to specify the exact issue of the
the newspaper).

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QUIZ
Quiz: Identification
1. Economics came from the Greek word _______
_______ which means “household
management”.
2. According to him, economics is “a scientific
study which deals with how individuals and
society make choices.”
3. It is the study of social behavior guiding in the
the allocation of scarce resources to meet the
unlimited needs and desires of the individual
members of a given society. ABM_AE12
4. The earlier definition of economics as the
science of wealth-getting and wealth-using
implies that the motivation of the process of
wealth accumulation is the utilization of wealth
for the individual’s satisfaction and society’s
welfare.

5. It deals with the economic behavior of the

individual units such as consumers, firms, the
owners of factors of productions
APPLIED ECONOMICS
REVISITING ECONOMICS AS A SOCIAL
SCIENCE

6. It is the allocation of the total product among members of society.

It is related to the problem of for whom goods and services are to
be produced.
7. It is used of good and services.
8. It is the use of inputs to produce outputs.
9. It refers to management of income, expenditures, wealth or
resources of a nation.
10. In everything we do, whether we produce or consume, whether
wealth-getting or wealth-using, we make decisions and these
decisions are based on alternative choices.

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APPLIED ECONOMICS
REVISITING ECONOMICS AS A SOCIAL
SCIENCE

Part II. Enumeration.

1 – 4. Common words in Economics
5 – 7. Study of Economics
8 – 11. Concerns of Economics
12 – 13. Divisions of Economics
14 – 17. Types of Economics
18 – 22. Historical Development of Economics
23 – 27 Rowtow’s 5 Stages of Economic Development
28 – 30. Essence of Studying Economics

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APPLIED ECONOMICS
REVISITING ECONOMICS AS A SOCIAL
SCIENCE

Reference:
• Tullao Jr., Tereso S. Applied Economics For A
Progressive Philippines. Phoenix Publishing House;
927 Quezon Ave., Quezon City. 2016
• Pagoso, Cristobal M. Philippine Economics (Macro
Approach). NELSON PUBLICATION; Marimar
Village Paranaque City. 2003
• Carnaje, Gideon P. Applied Economics. Vibal Group
Inc, Araneta Avenue, Quezon City. 2016

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