Applied economics is a popular tool in business planning and for public policy analysis and evaluation.

Applied Economics for Senior High School

1. APPLIED ECONOMICS Economics as Applied Science

2. Objectives define basic terms in applied economics differentiate economics as social science and applied science At the end of the lesson, the learner is expected to: APPLIED ECONOMICS ECONOMICS AS AN APPLIED SCIENCE

3. What is Applied Science? Applied science  is a discipline of science that applies existing scientific knowledge to develop more practical applications, like technology or inventions. Within natural science, disciplines that are basic science, also called pure science, develop  information  to predict and perhaps explain—thus somehow understand—phenomena in the natural world. Applied science applies science to real world practice. ABM_AE12 APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS

4. Economics as an Applied Science As social science, economics deals with the analysis on how members of a society interact with one another on the creation and utilization of wealth. Thus, economics is a science of choosing from alternative options that will yield the highest benefits to society in the context of competing uses and opportunity costs. However, the study of economics has been perceived as too theoretical since it deals with the principles, laws and assumptions governing human behavior in the allocation process. ABM_AE12 APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS

5. Economics as an Applied Science As social science, economics deals with the analysis on how members of a society interact with one another on the creation and utilization of wealth. Thus, economics is a science of choosing from alternative options that will yield the highest benefits to society in the context of competing uses and opportunity costs. However, the study of economics has been perceived as too theoretical since it deals with the principles, laws and assumptions governing human behavior in the allocation process. ABM_AE12 APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS

6. Applied Economics Applied Economics  is the application of economic theory and econometrics in specific settings. As one of the two sets of fields of economics (the other set being the  core ), it is typically characterized by the application of the  core , i.e. economic theory and econometrics. The process often involves a reduction in the level of abstraction of this core theory APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS

7. Keynes’ Discussion He discussed the uses of the phrases applied political economy and applied economics noting three different uses: in the sense suggested in the text [in association with the art of political economy]; to designate the application of economic theory to the interpretation and explanation of particular economic phenomena, without any necessary reference however, to the solution of practical questions; to mark off the more concrete and specialized portions of economic doctrine from those more abstract doctrines that are held to pervade all economic reasoning. (1917, 58–59) and applying theories of economy on what we have in reality to get a healthy enterprise and business prosperity. ABM_AE12 APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS

8. Problem and Application: APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS Suppose that there is a sudden new trend for high school students all over the Philippines to ride bicycles more. How would the price system decide “who should get what is produced?” How would the inputs used in bicycle production be affected?

9. Activity: Economics as Science ABM_AE12 APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS

10. Quiz: Essay ABM_AE12 APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS How does Applied Economics affect the daily lives of the Filipinos?

11. Reference: APPLIED ECONOMICS ECONOMICS AS AN APPLIED ECONOMICS 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

12. Economic Problems: Once the country identifies the type of economic system, they have to address their economic questions. 1. What goods and services to produce? – identifying the necessity, what really the economy needs? In this pandemic for example, the economy has to choose between the production of mask or rice.

13. 2. How do things are produce? - Referring to the techniques on the production of the good or service. Say for example, if the economy chooses to produce mask due to COVID-19, then the economy has to determine on the manner or process of producing it. 3. For whom things are produce? – consuming the good and how much of it is to produce. Identifying the factor markets which is the land, labor and capital in order to sustain the demand and supply in the economy. Determining factor is the price.

14. IDENTIFICATION: Identify which of the following is most appropriately a microeconomic or macroeconomic issue. Write your answer on a separate sheet of paper. 1. Determination of GDP and GNP in the economy 2. Determining the prices in the individual market 3. Study of the relationship between inflation, unemployment and purchasing power 4. Consumers behavior in the economy 5. Production and costs analysis in the manufacturing firms 6. Operation of individual markets 7. Impact of fiscal debt during this pandemic 8. Study of individual behavior 9. General level of rice prices in this pandemic 10. Total number of workers employed and unemployed in the Philippines during the Asian crisis