Lesson 1: Introduction to Applied Economics

Week 1/ Lesson 1
ABM_AE12-Ia-d-1
Learning Objectives: Materials:
• To define the term Economics; Learner’s module, notebook & pen
• To differentiate between Economics References:
as a Social Science and as an • Dinio, R.P. (2017). Applied Economics, Rex
Applied Science; Book Store, Inc. Manila, Philippines.
• To create pie chart for the personal • https://www.durhamisc.com/blog/why-is-it-
and family budget monitoring. important-to-study-economics
• https://www.investopedia.com/terms/a/applie
d-economics.asp
Let’s roll!
Hi! It's with an incredible joy to invite you in our Applied Economics class. Do you know
that economics affects the lives of people in almost every aspect? Do you realize that each
individual makes economic decision in their lives? I know that this subject will be interesting
to you because you will find how economics applies to our daily lives.
________________________________________________________________________
WHAT DO YOU ALREADY KNOW!
The power of picture. What’s the meaning of the picture below? Write your insights on a
sheet of paper.

Let’s work and learn!

Economics, as a study, is the social science that involves the use of scarce resources to
satisfy unlimited wants.
Part of human behaviour is the tendency of man to want to have as many goods and
services as he can. However, his ability to buy goods and services is limited by his income
and purchasing power. It is therefore in this context that man has to practice economics .
ECONOMICS AS A SOCIAL SCIENCE
Economics is a different science from biology and chemistry as these are physical sciences. Economics
is a social science because it studies human behaviour just like psychology and sociology. A social
science is, broadly speaking, the study of society and how people behave and influence the world around
them. As a social science, economics studies how individuals make choices in allocating scarce resources
to satisfy their unlimited wants.
ECONOMICS AS AN APPLIED SCIENCE
Applied economics is the study of economics in relation to real world situations, as opposed to the theory
of economics. It is the application of economic principles and theories to real situations, and trying to
predict what the outcomes might be.
John Neville Keynes is attributed to be the first to use the phrase “applied economics” to designate the
application of economic theory to the interpretation and explanation of particular economic phenomena.
WHY ECONOMICS IS IMPORTANT?
So, why do we study economics? Here are five reasons why studying economics is important.
1. Informs decisions
Economists provide information and forecasting to inform decisions within companies and governments.
This knowledge of economics – or economic intelligence – is based on data and modelling.
2. Influences everything
Economic issues influence our daily lives. This includes issues such as tax and inflation, interest rates
and wealth, inequality and emerging markets, and energy and the environment. A broad subject,

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economics provides answers to a range of health, social and political issues that impact households and
wider communities.
3. Inspires business success
Understanding how consumers behave is vital for a business to succeed. Economists use theories and
models to predict behaviour and inform business strategies. For example, how to analyse ‘big data’.
4. International perspective
Economics affects the world we live in. Understanding domestic and international perspectives – historic
and current – can provide a useful insight into how different cultures and societies interact. For
international corporations, understanding the world economy is key to driving success.
Conclusion:
Economics will help the students understand why there is a need for everybody, including the government,
to budget and properly allocate the use of whatever resources are available. It will help one understand
how to make more rational decision in spending money, saving part of it, and even investing some of it.
On national level, economics will enable the students to take a look on how the economy operates and to
decide for themselves if the government officials and leaders are effective in trying to shape up the
economy and formulate policies for the good of the nation.
Let’s practice!
DIRECTIONS: Read each statement below carefully. Answer T if you think a statement is
TRUE and F if the statement is FALSE. (2 points each)

1. Economics is the same as science from biology and chemistry as these are physical sciences.
2. Economics will help one to understand how to make more rational decision in spending money, saving
part of it, and even investing some of it.
3. Unlimited wants means buyers tend to consume less.
4. Part of human behaviour is the tendency of man to want to have as many goods and services as he
can.
5. Economic issues influence our daily lives.

Let’s reinforce!
DIRECTIONS: Using a pie chart, show your regular allowance for the week and how you
budget this for your school and personal expenses. Write your answer on a yellow pad
paper. (20 points)

Sample Pie Chart

Let’s check!
How well do you perform? Given the task below you may use separate sheet of paper for
your output. (20 points)

• Create your own family budget monitoring list using a pie chart.

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or mechanical including photocopying- without written permission from the Top Link Global College, Inc. Revised
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Lesson 2: Defining Basic Terms in Applied Economics
Week 2/ Lesson 2
ABM_AE12-Ia-d-2
Learning Objectives: Materials:
• To define basic terms in applied Learner’s module, notebook & pen
economics; References:
• To list the factors of production; • Dinio, R.P. (2017). Applied Economics, Rex
• To demonstrate knowledge on how to Book Store, Inc. Manila, Philippines.
solve economic issues and problems • https://economics.appstate.edu/node/245
• https://www.philstar.com/business/2021/04/2
2/2092800/philippine-economy-remains-
fragile
Let’s roll!
It’s a good day indeed! Studying economics will help you as a student to understand the
world around you. Because economics, at its core, is the study of how to evaluate
alternatives and make better choices. It develops critical-thinking and problem-solving
skills to make good decisions. Let’s be more productive and learn more about economics.
New day, new lesson! Let the fun begin.
WHAT DO YOU ALREADY KNOW!
Rearrange the words and in your own understanding, explain each jumbled words.
JUMBLED WORDS ANSWER
CLAATIP
DLAN
BORAL
GEAW
CROMICONOMICE
Let’s work and learn!
Everybody goes through a day with constraints or limitations: motorist complain of high
gasoline prices, or times when people suffer due to shortage of chicken in the market.
People always complain about not having enough – not enough food on the table, not
enough income to meet all family’s need.
This, in effect, is the existence of what we call scarcity, that is, insufficiency of resources to meet the
wants of consumers. Scarcity is the reason why people have to practice economics.

MARKET – is an interaction between buyers and sellers of trading or exchange. It is where the consumer
buys and the sellers sells.

SCARCITY is a condition where there are insufficient resources to satisfy all the needs and wants of a
population. Scarcity may be relative or absolute.
➢ Relative scarcity – when a good is scarce compared to its demand. For example, coconuts are
abundant in the Philippines since the plant easily grows in our soil and climate. However,
coconuts become scarce when the supply is not sufficient to meet the needs of the people.
➢ Absolute scarcity – is when supply is limited. For example, oil is absolutely scarce in the country
since we have no oil wells from which we can source our petroleum needs, so we rely heavily on
imports from oil-producing countries like Iran and other Middle East countries.

ECONOMIC RESOURCES
Economic resources, also known as factors of production, are the resources used to produce goods and
services. These resources are, by nature, limited.
1. Land – soil and natural resources that are found in nature and are not man-made. For example,
owners of lands receive a payment known as rent.

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 2. Labor – physical and human effort exerted in production. For example, it covers manual workers
like construction workers, machine operator, and production workers, as well as professionals
like nurses, lawyers, and doctors. The term also includes jeepney drivers, farmers, and fishermen.
The income received by labors is referred to as wage.
3. Capital – man-made resources used in the production of goods and services, which include
machineries and equipment. The owner of capital earns an income called interest.

ECONOMIC RESOURCE RESOURCE PAYMENT

Land Rent
Labor Wage
Capital Interest

MACROECONOMICS AND MICROECONOMICS

There are two branches of economics. These are macroeconomics and microeconomics.
➢ Macroeconomics – is a division of economics that is concerned with the overall performance of
the entire economy. It focuses on the overall flow of goods and resources, and aggregate
movement of goods and services. Macroeconomics is about the nature of economic growth, the
expansion of productive capacity, and the growth of national income.
➢ Microeconomics – is concerned with the behaviour of individual entities such as the consumer,
the producer, and the resource owner. It is more concerned on how goods flow from the business
firm to the consumer and how resources move from the resource owner to the business firm. It is
also concerned with the process of setting prices of goods that is also known as Price Theory.

BASIC ECONOMIC PROBLEMS OF SOCIETY

All societies are faced with basic questions in the economy that have to be answered in order to cope
with constraints and limitations. These are:
1. What to produce and how much – society must decide what goods and services should be
produced in the economy. Having decided on the nature of goods that will be produced, the
quantity of these goods should also be decided on.
2. How to produce – is a question on the production method that will be used to produce the goods
and services. This refers to the resource mix and technology that will be applied in production.
3. For whom to produce – is about the market for the goods. For whom will the goods and services
be produced? The young or old, the male or female market, the low-income or the high-income
groups?
Let’s practice!
DIRECTIONS: You really have what it takes to be an economist! Now is the time for you to
identify all the economic terms referred to each statement below. Write your answer in a
separate sheet of paper. (10 points)
• This input consists of • Consists of the • Includes all natural
the physical and machinery and resources "free gifts of
intellectual services equipment used to nature". Resources that
provided by human produce output. exist independent of
beings. Ex: teachers, human action. Ex:
accountants, minerals, oil deposits,
engineers, factory or water.
workers, sales clerks

ANSWER: ANSWER: ANSWER:

Let’s reinforce!
DIRECTIONS: Identify which resources (Land, Labor, Capital) is referred to by the following
word. (2 points each)
1. Doctors 6. Production equipment
2. Minerals 7. Engineers

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 3. Forests 8. Oil
4. Teachers 9. Machineries
5. Technology 10. Natural resources

Let’s check!
How well do you perform? Given the task below you may use another sheet paper for your
output.
Search a news item on the internet that is related to any economic issue. The following should
be included:
• Date published
• Title of the news
• Key issues
• Proposed solution
• Reference
Sample Content:
• Date published (April 22, 2021)
• Title of the news (“Philippine economy remains fragile”)
• Key issues (The Philippine economy remains fragile amid the still limited boost in
consumer and business confidence as COVID cases continue to escalate.)
• Proposed solution (The government, is optimistic that the ramping up of COVID-19
vaccination will improve prospects for recovery so that soon the economy will recover
and businesses will back to normal operation, and workers can back to their work.)
• Reference (www.philstar.com)

Lesson 3: basic principles of demand & principles of

supply
Week 3/ Lesson 3
ABM_AE12-Ie-h-3
Learning Objectives: Materials:
• To define market demand and market Learner’s module, notebook & pen
supply; References:
• To explain factors affecting demand and • Dinio, R.P. (2017). Applied Economics, Rex
supply; Book Store, Inc. Manila, Philippines.
• To demonstrate knowledge about the
basic principles of law of demand and law
of supply;
• To conduct an interview to further
elaborate the concept of law of demand
and law of supply.
Let’s roll!
What a wonderful day ahead! In this module, you will be able to analyze the basic principles
of demand and supply. Let’s be more productive and learn more about economics. New
day, new lesson! Let the fun begin.

________________________________________________________________________

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or mechanical including photocopying- without written permission from the Top Link Global College, Inc. Revised
Edition 2021.
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 WHAT DO YOU ALREADY KNOW!
Based on your own understanding, what will be the picture below represent? Feel free to
share your ideas on a sheet of paper.

Let’s work and learn!

DEMAND – is the willingness of a consumer to buy a commodity at a given price. A demand
schedule shows the various quantities the consumer is willing to buy at a various prices.
Law of Demand – as price increases, the quantity demanded decreases for a product
decreases.
For example, in June, when the school year starts, demand for textbooks, school supplies, and uniforms
normally go up. Also, on Valentine’s Day demand for flowers and chocolates to surge. We can therefore
see that in various seasons of the year, demand for certain types of goods will increase.
The demand function shows how the quantity demanded for a good is dependent on the price of that
good.
Presented in Table demand schedule, is a hypothetical demand schedule for chocolate for one
individual, Kenneth. The quantity demanded is determined at each price with the following function.
Table 2.1. Hypothetical Demand Schedule of Kenneth for Chocolate (per piece)

Price per piece Number of pieces

₱1 6
2 5
4 4
6 3
8 2
10 1

At a price of ₱10 per piece, Kenneth is willing to buy one piece of chocolate for a given month. As price
goes down to ₱8, the quantity he is willing to buy goes up to two pieces of chocolate. At price of ₱2, he
will buy five pieces of chocolate. A lower price allows Kenneth to buy more, but when its price increases,
the amount that he can afford to buy tends to go down.

The demand curve is a graphical illustration of the demand schedule, with the price measured on the
vertical axis (Y) and the quantity demanded measured on the horizontal axis (X). The values are plotted
on the graph and are represented as connected dots to derive the demand (Figure for demand curve).
The demand curve slopes downward indicating the negative relationship between the two variables which
are price and quantity demanded.

QUANTITY DEMANDED
15

10

0
0 1 2 3 4 5 6

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Figure 2.1. Hypothetical Demand Curve of Kenneth for Chocolates (per piece) for One Month.
Income effect – is when a change in the price of a good changes consumer’s real income or purchasing
power, which is the capacity to buy with a given income. In other words, Purchasing power is the volume
of goods and services one can buy with his/her income. If a good becomes more expensive, real income
decreases and the consumer can only buy less goods and services with the same amount of money
income.
Substitution effect is felt when a change in the price of a good changes demand due to alternative
consumption of substitute goods. For example, higher price of a product encourages the consumption of
its cheaper substitutes further discouraging demand for the former already limited by less purchasing
power (income effect).
➢ Substitute Goods - those that can be used to replace each other. Example, if the price of coffee
rises, the demand for tea should increase assuming that the price of tea doesn’t change or lower
that the coffee.
➢ Complement Goods - those that can be used together. Example, if the price of ice cream rises,
the demand for ice-cream cone will decrease.
SUPPLY – refers to the quantity of goods that a seller is willing to offer for sale. The supply schedule
shows the different quantities the seller is willing to sell at various prices. The supply function shows the
dependence of supply on the various determinants that affect it.
Law of Supply – as the price increases, the quantity supplied of the good increases since the seller will
take this as an opportunity to increase his/her income.
Table 2.2. Supply Schedule of Mark for Fish in One Week
Price of Fish (per Kilo) Supply (in Kilos)

₱20 2

40 3

60 4

80 5

100 6
As can be seen in Table 2.2, the relationship between the price of fish and the quantity that Pedro is
willing to sell is direct. The higher the price, the higher the quantity supplied. When plotted into a graph,
we obtain the supply curve.

QUANTITY SUPPLIED
200
100
0
0 1 2 3 4 5 6

Figure 2.2. Supply Curve of Fish of Mark for One Week

Let’s practice!
DIRECTIONS: Discussion question time! Answer the given question below. Write your
answer on the box provided or in a sheet of paper. (5 points each)

When the price of strawberries goes down, how

many strawberries will people probably buy?
a. More strawberries
b. Less strawberries ANSWER:
c. The same amount of strawberries
d. None of these are correct

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 In the Law of Supply an increase in price results in: ANSWER:
A. Decrease of quantity supplied
B. Increase of quantity supplied

Let’s reinforce!
DIRECTIONS: CASE ANALYSIS. Read and answer the given questions on the attached
Case scenario. (10 points each)

“The outbreak of COVID-19 does not only affect global health issues but also puts the whole
economy into crisis. Many industries are affected, including the business sector. Businesses are
forced to shut down its operation which affects greatly the income of the company. Some have no
choice but to lay-offs its workers, and worse, other businesses have been closed, evidently, this
shows that some businesses seem unprepared during this pressing situation.”

a. Given that you are a business owner, how will you managed this changes brought by the
pandemic? Cite concrete ways.
b. Why do you think we tend to buy less if there is an increase of price? Elaborate your answer.

Let’s check!
How well do you perform? Given the task below you may use bond paper for your output.
(20 points)

Choose only two (2) participants and conduct a simple interview. Provide a documentation
by capturing one photo during an interview. The following questions and information should be asked
during the interview:

PERSONAL INFORMATION
Name:
Sex:
Nature of work: (if there’s any, put N/A if
unemployed)
QUESTIONS:
• Do you consider to buy more if there is a decrease of price to the products that you usually
bought? Why
• In relation to first question, why do you think we tend to buy more if there is a decrease of
price?
• Assume that you are a business owner, if you have great amount of supply on the products
that you are selling will you consider to increase the price even though we’re in the middle of
pandemic? Explain your answer.

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Lesson 4: MARKET PRICING ON ECONOMIC DECISION-
MAKING
Week 4/ Lesson 4
ABM_AE12-Ie-h-4
Learning Objectives: Materials:
• To define market equilibrium and Learner’s module, notebook & pen
opportunity cost; References:
• To distinguish between elastic and • Dinio, R.P. (2017). Applied Economics, Rex
inelastic demand and supply; Book Store, Inc. Manila, Philippines.
• To state the implication of market pricing • https://www.economicshelp.org/microessays/
on economic decision-making; equilibrium/market-equilibrium/
• To conduct a survey that measures’ • http://www.econport.org/content/handbook/E
individual current situation. quilibrium/surplus-and-shortage.html
Let’s roll!
New day, new lesson! In this module, you are expected to be familiarize about the market
pricing on economic decision-making and its implication. Let’s be more productive and
learn more about economics. Let’s do this!

WHAT DO YOU ALREADY KNOW!

Using you own definition complete the sentence below:
Economics is _____________.

Let’s work and learn!

If the forces of demand and supply operate together, we can show how price is determined
in a market economy. Alfred Marshall, a British economist, defined the Law of Demand and
Supply.

MARKET EQUILIBRIUM
Equilibrium is a state of balance when demand is
equal to supply. The equality means that the quantity
that sellers are willing to sell is also the quantity that
buyers are willing to buy for a price. As a market
experience, equilibrium is an implicit agreement
between how much buyers and sellers are willing to
transact. The price at which demand and supply are
equal is the equilibrium price.
Market equilibrium can be shown using supply and
demand diagrams Sample diagram of Market equilibrium
In the diagram below, the equilibrium price
is P1. The equilibrium quantity is Q1
Sometimes the market is not in equilibrium-that is quantity supplied doesn't equal to quantity demanded.
When this occurs, there is either excess supply or excess
demand.

A Market Shortage occurs when there is excess

demand- that is quantity demanded is greater than
quantity supplied. In this situation, consumers won't be
able to buy as much of a good as they would like. In
response to the demand of the consumers, producers will
raise both the price of their product and the quantity they
are willing to supply.

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or mechanical including photocopying- without written permission from the Top Link Global College, Inc. Revised
Edition 2021.
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A Market Surplus occurs when there is excess supply- that is quantity supplied is greater than quantity
demanded. In this situation, some producers won't be able to sell all their goods. This will induce them
to lower their price to make their product more appealing.

CHOICE AND DECISION MAKING

Because of the presence of scarcity, there is a need for man to make decisions in choosing how to
maximize the use of the scarce resources to satisfy as many wants as possible.

Opportunity cost - refers to the value of the best foregone alternative. The concept of opportunity cost
hold true for individuals, businesses, and even a society. In making a choice, trade-offs are involved.
For example, the opportunity cost of watching a movie in a cinema is the value of other things that you
could have bought with that money such as a pint of ice cream, a combo meal in fast food, or a simple
t-shirt to be used in a PE class.

Let’s practice!
DIRECTIONS: On a sheet of paper, give your own scenario of Opportunity Cost.
Remember that in terms of opportunity cost, we must always consider the alternative cost
before making a decision! (10 points)

Let’s reinforce!
DIRECTIONS: INCREASE OR DECREASE? Using the word Increase or Decrease you
may now identify the effects on supply, demand, price and quantity of the following scenario.
Use a sheet of paper to answer. (2 points each)

1. If there’s low supply of oil and there’s a high demand on it, the price of oil will _____________.
2. A low demand in tomatoes, with a high supply of it will ______________ the price.
3. If there are no changes in the demand of sweet potatoes but there’s high supply, the price ________.
4. If the price of banana is low while the demand is unchanged, the supply ___________.
5. If the price of garlic increases while the supply remains unchanged, the demand ___________.
6. If the supply of rice is unchanged while the demand is high, the price ___________.
7. If there’s a high supply of calamansi yet the price is low, the demand is ___________.
8. When the supply of guava is unchanged and the price is low, the demand ________.
9. When the price and demand for dressed chicken is high and the supply is unchanged, the quantity of
dressed chicken _______.
10. When the demand for chicken egg is unchanged and the supply is low, the quantity of the goods
_________.

Let’s check!
How well do you perform? Given the task below you may use bond paper for your output.
(20 points)
Conduct a simple survey to measure the situation of a particular individual with regards to
the current economic issue that we are facing. Any individual ages from 16-50 can

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participate to the said survey. Choose only three (3) participants. The following questions and information
should be given:

PERSONAL INFORMATION
Name:
Age:
Sex:
Address:
Nature of work: (if there’s any, put N/A if
unemployed)
FAMILY DETAILS
Source of income: (business, pension,
employed, etc.)
Average income per month:
Number of family members employed:
House owned? Not owned? Rental?

Guide question:

• Upon conducting the survey what will be the main problem that the participant currently
experiencing?
• If you were to proposed a public program for all what would it be that you know may
address the current situation of the society?

Lesson 5: MARKET STRUCTURES

Week 5/ Lesson 5
ABM_AE12-Ie-h-5
Learning Objectives: Materials:
• To describe the characteristics of market Learner’s module, notebook & pen
structure; References:
• To differentiate various types of market • Dinio, R.P. (2017). Applied Economics, Rex
structures; Book Store, Inc. Manila, Philippines.
• To create a business name, tagline, and • https://www.yourarticlelibrary.com/economics
logo for future business. /market/market-structure-meaning-
characteristics-and-forms-economics/28736
Let’s roll!
Welcome to another day of learning! In this module, you will be able to describe and
differentiate the various market structures and its features. Let’s be more productive and
learn more about economics. Let’s start!

WHAT DO YOU ALREADY KNOW!

What a fresh start! Describe in one word what you can see in the picture below.

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Edition 2021.
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 Let’s work and learn!
Market Structures
After looking at the basic principles of demand and supply, it will also be helpful to learn
about the market structures in which sellers can operate. Each structure will be described
in terms of the nature of the product being sold, the number of buyers and sellers in the
market, and the ease of entering or exiting the market.

Market structure refers to the competitive environment in which buyers and sellers operate.

Competition is rivalry among various sellers in the market. As students, we are familiar with the word
competition. We are exposed to competition in school: spelling bees, quiz bees, and sports fests. On the
television, we watch beautiful girls from all over the world compete for the Miss Universe or Miss World
title. We see how the various teams of the PBA compete to win the championship.
The market is a situation of diffused, impersonal competition among sellers who compete to sell their
goods and among buyers who use their purchasing power to acquire the available goods in the market.

Types of Market Structure

Market Characteristics
Structure Number of Number of Barriers to Entry and Exit Identical or
Sellers Buyers Entry Activity Differentiated
Product?

Pure Many firms Many None Yes, firms have Identical product, all
Competitio buyers the freedom to goods are perfect
n enter and exit substitutes for
consumers

Monopolisti Many firms Many Very low Yes, firms have Differentiated
c with non- buyers the freedom to products, but close
Competitio interdepend enter and exit substitutes for
n ent pricing consumers.
and quantity
decisions
Oligopoly Few firms Many High Difficult entry Products can be
with interdep buyers (often due to either differentiated
endent prici economies of or non-
ng and scale) differentiated
quantity
decision
Monopoly Single seller Many Complete entry blocked A single, identical
buyers product with no
close substitutes

1. Perfect Competition
Describes a market structure, where a large number of small firms compete against each other.
Example, Palengke.
2. Monopolistic competition
Refers to a market structure, where a large number of small firms compete against each other.
However, unlike in perfect competition, the firms in monopolistic competition sell similar, but
slightly differentiated products. This gives them a certain degree of market power which allows
them to charge higher prices within a certain range. Example, the industry of smart phones like
Samsung, Apple, LG etc.
3. Oligopoly

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 Describes a market structure which is dominated by only a small number of firms. This results in
a state of limited competition. The firms can either compete against each other or collaborate. By
doing so they can use their collective market power to drive up prices and earn more profit.
Example, Oil industry.
4. Monopoly
A monopoly refers to a market structure where a single firm controls the entire market. In this
scenario, the firm has the highest level of market power, as consumers do not have any
alternatives. As a result, monopolists often reduce output to increase prices and earn more profit.
Example, Electric Company.
There are varying degrees of competition in the market depending on the following factors:
• Number and nature of buyers and sellers
• Similarity or type of product bought and sold
• Entry and exit condition of firms and input owners

Significance of the Market Structure

The type of market structure in which the business operates will determine the amount of market power
or control the business owner will enjoy. Greater market power means a greater ability to control prices,
differentiate the products one offers for sale, thus, leading to opportunities for more profits.

Let’s practice!
DIRECTIONS: Encircle the letter that corresponds your answer. Use a sheet of paper to
answer. (1 point each)

1. A farmers market is an example of.

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 a. Pure competition c. Oligopoly
b. Monopolistic competition d. Monopoly
2. The market structure that involves the most competition is
a. Pure competition c. Monopolistic competition
b. Monopoly d. Oligopoly
3. Which of the following market structures has the largest number of firms trying to sell their
products?
a. Pure competition c. Oligopoly
b. Monopolistic competition d. Monopoly
4. In a Monopolistic Competition market, firms usually sell products that are
a. Close substitutes c. Complementary
b. Completely different d. Identical
5. It is a market that has many sellers.
a. Oligopoly c. Open market
b. Monopoly d. Monopolistic competition

6. One feature of an oligopoly is that there are few .

a. Buyers c. Sellers
b. Patents d. Markets
7. It is an industry that is often a natural monopoly.
a. Electricity c. Steel
b. Grocery stores d. Pure competition

8. An industry with a single supplier is known as a -

a. Cartel c. Monopoly
b. Conglomerate d. Proprietorship
9. The market structure with the most control over prices is
a. Perfect competition c. Oligopoly
b. Monopolistic competition d. Monopoly
10. It is an industry that is often a natural monopoly.
a. Electricity c. Steel
b. Grocery stores d. Pure competition
Let’s reinforce!
DIRECTIONS: Do you want to be an entrepreneur? A business owner someday? One
that has business in the market? This is your chance to plan for your future business!
On a sheet of paper, all you need to do is to make your own Business Name and you’re
your business tagline. (10 points each)

• Name of Business (Ex. Erica’s Beauty • Tag line of your Business (Ex. Here at
Salon) Erica’s Beauty Salon, Beauty is our
duty!
Let’s check!
How well do you perform? Given the task below you may use bond paper for your output.
(20 points)
• Design your own business logo. You may use the details that you used in your
let’s reinforce activity like the name of your business and the tagline itself.
Remember creativity matters! Give extra color and design to make your logo
more attractive.

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Lesson 6: CONTEMPORARY ECONOMIC ISSUES
Week 6/ Lesson 6
ABM_AE12-Ie-h-6

Learning Objectives: Materials:

Learner’s module, notebook & pen
• To describe basic terms related to
contemporary economic issues References:
• To analyze the effects of contemporary • Dinio, R.P. (2017). Applied Economics, Rex
economic issues Book Store, Inc. Manila, Philippines.
• To demonstrate knowledge on the • https://www.britannica.com/topic/economic-
impact of contemporary economic growth/The-role-of-government
issues • https://www.rappler.com/business/unemplo
yment-rate-philippines-january-2021
Let’s roll!
Hello learner! It was a great day to discuss about the contemporary economic issues.
Let’s be more productive and learn more about economics. Are you ready? Come on
let’s do this!

WHAT DO YOU ALREADY KNOW!

We have a very interesting topic today! Using the following photos and jumbled words
below, identify the word that best corresponds to it.

C_RR_NC_Y T_X_S

IN_E_TM_NT W_G_

Let’s work and learn!

After learning about the various types of market structure, we will now focus on the
effect and impact of contemporary economic issues.

The people of a country are very important as a resource used in the production of
goods and services. In the Philippines, the labor force, refers to the portion of the population, 15
years old and over who are willing and able to work, including those who are actively seeking work
but have not found work and those who are employed.

THE PHILIPPINE WAGE SITUATION

Usually, when Labor Day is celebrated in the Philippines on May 1, labor unions and organizations
demanding for wage increases. Workers always claim that these minimum wages are not enough for
their subsistence. The above minimum wages apply in the NCR. Minimum wages in the other regions
in the Philippines are lower depending on the cost of living in the specific region or sector. The setting
of minimum wages by the government assures protection for workers that they are not underpaid by
employers, and gives the guarantee of a sufficient income meet their needs.

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 Minimum Wage National Capital Region (NCR) as of April 4, 2015

LABOR MIGRATION AND THE OVERSEAS FILIPINO WORKERS

Another distinct feature of Philippine labor is the growth of laborers whom we call the OFWs or the
Overseas Filipino Workers. Primarily because of a high unemployment rate in the country, currently
at 6.4%, Filipinos have started to find work in other countries. Because wages are higher in the United
States and other more developed economies, Filipino teachers, engineers, doctors, nurses and other
health professionals and technical workers have opted to migrate. So, even if the supply of doctors in
the country may be limited, because of the higher wages abroad, some doctors prefer to migrate and
work in foreign countries. In 2014, there were 2,320,000 registered OFWs.
Scattered all over the world, our overseas Filipino workers have been hailed as our modern-day
heroes, contributing to the growth of the economy and sending millions of dollars to their families back
home in the Philippines. The lack of jobs in their native land, and the low wages for whatever jobs are
available are the main reasons Filipinos, both male and female, try to find work in foreign countries.

THE PHILIPPINE PESO AND FOREIGN CURRENCIES

Trading with other countries is also an important economic activity that impacts on the economy.
Selling locally made products, called exports, means we earn dollars as payment for these goods
bought by foreign buyers. In the same manner, we buy goods from other countries, and these are our
imports. When we trade with other countries, we need a common currency to use to pay for goods
we buy from them and for them to pay us for goods we sell to them. When we travel to foreign
countries, we may bring peso or the US dollar, then convert them into the local currency of the country
which we visit.
For example, we convert our dollars into baht when we go spending in Thailand, to rupees in India,
euros in Spain and other European countries, and yen in Japan. This is why we need conversion rates
and these are based on the existing foreign exchange rates.

RENT AND PRICE STRUCTURE

The layman's concept of Rent is payment for the use of land or buildings belonging to others. It is
the compensation made to the owner of such land or building, from the point of view of economics,
rent refers to a payment made to or for a factor of production over and above the amount expected
by its owner. Henry George (2014) describes the concept of rent in economics as follows:
"[I]n the economic meaning of rent, payments for the use of any of the products of human exertion
are excluded, and of the lumped payments for the use of houses, farms, etc., only that part is rent
which constitutes the consideration for the use of the land. The part that is paid for the use of buildings
or other improvements is properly interest, as it is a consideration for the use of capital."
In short economic rent is any unearned income.

SAVINGS AND INVESTMENT

Savings and Investment are necessary to build the future. Savings is to investment as food is to
the body nourishment processes. As food and the nourishment process sustain body growth, so do
savings and investment to the growth of the economy’s productive capacity.

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 For example, the term enterprise investment has been used to describe the kind of capital
formation that involves innovations and that by building ahead of demand generates rapid rates of
growth of productivity or technical progress.

TAXES
We pay taxes for government to provide public goods and services that empower and enable
individuals and institutions alike (e.g., school) to pursue their dreams. For example, the public school
system to educate children of poor families out of poverty. In other words, we pay taxes for government
to provide a better place.
But taxes are yet our burden even as we ultimately benefit from the public goods and services we
get in return. Taxes can dampen the incentive to do business for the benefit of society as they can eat
up profit. Taxes can also distort savings, investment, and consumption as income earners shift to
substitutes to avoid the tax burden. Shortfalls of tax revenues and government spending can mean
less road maintenance, books for the public schools, medical services, and medicines for the poor, to
name a few. On top of the shortfalls, corruption misallocates spending on the not-so-important from
the more important public goods and services (e.g., road beautification instead of free medical
services for the poor).
Let’s practice!
DIRECTIONS: Write ☺ if the proposed action of the government in the Philippines is
the best option to make, and  if not. Use a sheet of paper to answer.
1. Government should allot more budget on housing projects for poor families.
2. The government should allocate the funds to develop industries in other regions
in the country to create jobs for the unemployed.
3. Government to tolerate illegal occupancy of idle lands.
4. Government to encourage invest to illegal imports of imported products.
5. Population control by implementing one-child policy.
6. Provide skills training to the urban settlers to be employable.
7. Government to invest more in education.
8. Government to encourage invest to cocaine.
9. Solve the housing back log, unfinished housing units, immediately.
10. Tolerate corruption on the tax paid by the people.

Let’s reinforce!
DIRECTIONS: Give ten (10) public goods and services projects that government
provides with the taxes we pay. Use a sheet of paper to answer. (2 points each)

Let’s check!
How well do you perform? Read the article and answer the following questions
comprehensively. Given the task below you may use bond paper for your output. (20
points)

4 million Filipinos unemployed in January 2021, but gov't sees 'signs of recovery'
There were 6.6 million underemployed or people who have jobs but are looking for more to meet
daily needs. This led to a higher underemployment rate of 16% in January. Despite unemployment
staying high, the government's economic team sees "signs of recovery," pointing to improved figures
in the labor force participation.
"As we further reopen the economy, we continue to see signs of recovery. The results of the
January labor force survey are promising as it tells us that we are on track to getting back most of
the jobs we have lost due to COVID-19 and the quarantines," the joint statement of the Department
of Finance, Department of Budget and Management, and National Economic and Development
Authority.

Guide question:
1. In this time of pandemic, do you agree to the re-opening of businesses knowing that this
will be a threat as it may become a risk to spread the virus? Explain your answer.

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 2. In the scale of 1 to 10, rate the performance of the current government administration in
response to reducing the unemployment rate here in the Philippines. Elaborate your
answer.

Let’s perform!

Third Quarter Performance Task - Big Task

Content, format, and rubrics below:

Business Plan Content, Format, & Rubrics

First part:
• Business Plan for "Insert Business Name"
• Name of group members
• Name of Subject Teacher
Second part:
• Table of Contents
Third part: Business Details
• Business name
• Business tagline
• Type of business
• Business location
• Describe your main product and services
Fourth part:
• Business logo
Fifth part: SWOT Analysis
• Strengths
• Weaknesses
• Opportunities
• Threats
Format:
• Font: Times New Roman
• Font size: 12
• Paper size: Short bond paper
• Margin: Left, right, top, bottom – 2.5cm

Scoring Rubric for Business Plan:

Output will be graded based on the following criteria:

Creativity 20%
Cooperative work 10%
Organization 20%
Content 50%
Total 100%

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electronic or mechanical including photocopying- without written permission from the Top Link Global College,
Inc. First Edition 2020.
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