IBN SIENNA INTEGRATED SCHOOL

SENIOR HIGH SCHOOL DEPARTMENT

Administration Business and Management (ABM) Track

SUBJECT SYLLABUS

LEVEL: Grade 12
SUBJECT CODE: ABM_AE12
SUBJECT TITLE: APPLIED ECONOMICS
SEMESTER: Second Semester AY 2017-2018
LECTURER: Mr. Al Jay T. Mejos
SCHEDULE: Sundays, 7:30-10:30 AM

SUBJECT DESCRIPTION: This course deals with the basic principles of applied economics, and its application to
contemporary economics issues facing the Filipino entrepreneur such as prices of commodities, minimum
wage, rent, and taxes. It covers an analysis of industries for identification of potential business opportunities.
The main output of the course is the preparation of a socioeconomic impact study of a business venture.

SUBJECT OBJECTIVE(S): At the end of this course, the student should be able to:
1. Analyze and propose solution/s to the economic problems using the principles of applied economics.
2. Conduct a survey of current economic situations within the vicinity.
3. Apply tools and techniques for business opportunities like the SWOT/TOWS analysis.
4. Conduct a survey of macro and micro environments affecting business in a locality.
5. Conduct a socioeconomic impact study on consumers; suppliers, investors; government; households
and international trade leading to options in venturing into a business.

SUBJECT REQUIREMENT(S): Written work 25%

Performance Task 45%
Quarterly Exam 30%
Total 100%
PREREQUISITE(S):
CO-REQUISITE(S): Business Enterprise Simulation; Business Ethics and Social Responsibility

SUBJECT OUTLINE:

1. Introduction to Applied Economics

2. Applied Economics
3. Industry and Environmental Analysis: Business Opportunities Identification
4. Socioeconomic Impact Study

REFERENCE(S):
Mankiw, N. Gregory. (2001). Principles of Economics. (2nd ed.). South-Western, Thomson Learning Inc.
Harcourt, Inc.
Samuelson, Paul A. and William D. Nordhaus. Economics (16th ed.). McGraw-Hill.
Case, Karl E., Ray C. Fair and Sharon M. Oster. Principles of Economics (10th ed.). Prentice Hall. Boston

Name: ________________________________________ Date: ______________ Signature:

LECTURE NOTES

1. Introduction to Applied Economics

Why study Economics?
To learn a way of thinking
To understand society
To understand global affairs
To be an informed citizen
What is Economics?
Economics is the study of how societies use scarce resources to satisfy unlimited wants.
Social Approach
Scientific Approach
Post hoc fallacy
Failure to hold all other things constant
Fallacy of Composition
Hasty Generalization
What are the two branches/scopes of Economics?
Microeconomics
Adam Smith
An Inquiry into the Nature and Causes of the Wealth of Nations (1776)
Macroeconomics
The twin themes of Economics.
Scarcity and Efficiency
Basic Economic Questions/Problems
What?
How?
Who/For Whom?
Technological Possibilities
Inputs and Outputs
Factors of Production
Land
Labor
Capital
Technology
The Production-Possibility Frontier
Opportunity Costs
Types of Economies/Economic Systems
Command Economy
Socialist Economy
Communist Economy
John Maynard Keynes
Theory of Employment, Interest and Money (1935)
Market Economy
Capitalist Economy
Laissez faire economy
Friedrich August von Hayek
Milton Friedman
Mixed Economy
What is a Market?
 Adam Smith’s The Invisible Hand
Perfect Competition
Monopolistic Competition
Oligopoly
Monopoly
Monopsony
Externalities/Spillover Effects
Market Power
Consumer Sovereignty
Free enterprise
Public Goods
Nonrivalry
Non-excludability
Taxes
What is Money?
Medium of Exchange
Storage of Value
Unit of Measure
Cowrie shells in West Africa
Beads (Wampum) in North America
Cattle in South Africa
Huge Wheels of Stone in Yap, South Pacific
Dolphin Teeth in Solomon Islands
Commodity Money
Fiduciary Money
Fiat Money
Credit Money
Electronic Money
What are the Principles of Economics?
1. People face tradeoffs
2. The cost of something is what you give up to get it.
3. Rational people think at the margin.
4. People respond to incentives.
5. Trade can make everyone better off.
6. Markets are usually a good way to organize economic activity.
7. Governments can sometimes improve market outcomes.
8. The standard of living depends on a country’s production.
9. Prices rise when the government prints too much money.
10. Society faces a short-run tradeoff between inflation and unemployment.
2. Applied Economics
Price, Quantity, Fixed Cost, Variable Cost, Total Cost, Average Cost, Marginal Cost
Supply
Quantity Supplied
Law of Supply
Supply Function
Supply Curve
Demand
Quantity Demanded
Law of Demand
 Demand Function
Demand Curve
Market Equilibrium
Price Floors
Price Ceilings
Determinants of Supply
Determinants of Demand
Shifts of Demand and Supply Curve
Elasticity
Price Elasticity of Demand
Perfectly Inelastic (ε=0)
Inelastic Demand (0<ε<1)
Unitary Elastic (ε=1)
Elastic Demand (ε>1)
Perfectly Elastic (ε→∞)
Income Elasticity of Demand
Normal Goods (ε>0)
Inferior Goods (ε<0)
Supply Elasticity of Demand
Cross-Price Elasticity of Demand
Complement (ε<0)
Substitute (ε>0)
Giffen Good
3. Industry and Environmental Analysis: Business Opportunities Identification
Macroeconomic Behavior
GDP, GNP and
Circular Flow Diagram
Identification of Competition
Customers
Suppliers
Competitors
Substitutes
Types of Industries
Agribusiness
Manufacturing
Services
Retail/Merchandising
International Trade (exports and imports)
Exchange rate and Exchange Rate
4. Socioeconomic Impact Study