APPLIED

ECONOMICS 12
Learning Competency from the
MELC’s

Differentiate economics as social science

and applied science in terms of nature and
scope. (ABM_AE12-Ia-d-1-2)
Specific Objectives

a. Define what economics is.

Let’s have an
activity!

Arrange Me!
1. It is a social science that deals
with how people organize
themselves to share scarce
resources in order to produce
goods and services that satisfy
the infinite and multiplying wants
and needs of man.
COEONSICM
2. This means that there is shortage
of supply or has limited resources.

YITSACRC
3. It is a branch of economics that
studies the behavior and
performance of an economy as a
whole.

ACRMOOCEONSCIM
4. It is a branch of economics that
studies the individuals and
industry’s behavior in decision
making and allocation of resources.

OICRMOCNEOCISM
5. A type of good which satisfy the
basic needs of man.

LAINTEESS OODGS
Let’s have the
discussion!
NATURE AND SCOPE
OF ECONOMICS
 Every man of any distinction makes an
economics decision every day. Deciding
on how much to spend and save, the kind
of food to buy, the type of school to
enroll, the amount of time for work and
leisure, and may more are only some
situations where one applies economics.
Thus, it is very important to understand
the various issues and intricacies
concerning economics. (Silon et.al 2009)
 If you are going to conduct a research,
you will have different aspects to
consider. For example, you are tasked to
conduct a research about studying the
economic situation of families here in our
locality. You are going to look at the
annual income of these families,
including their buying behavior in the
market, what specific products they
often purchased and many more. You
might also consider the overall view of
the entire economic system.
 This will include the causes why these
families limit their spending capabilities,
what are the environmental factors that
affects their purchasing power; or what
makes them satisfied in their buying
behavior. These approaches will examine
the same, but the main points differ from
each other.
 In a similar way, microeconomics and
macroeconomics examine the same
economy, but they have distinct
perspective. In studying the buying
behavior of the people, microeconomics
is about the particular behavior and
spending habits of the individual which
help them understand the overall
economic situation on individual matters,
while macroeconomics study the
economic situation of the entire economy
that will help to explain the internal and
external environment of the country as a
whole.
 According to Carnaje 2016, like other
social sciences, such as sociology and
political science, economics is trying to
understand how people behave and how
they interact within society. It also uses
a scientific approach to its
investigations. What makes economics
different from the other social sciences?
 In order to highlight its distinctions
from other social sciences, the following
concepts of economics will be used:
Economics is the study of how
individuals, business firms,
governments, and societies as a whole
make choices under conditions of
scarcity. The special emphasis
economists give to choices that scarcity
requires us to make- what we give up
when we make those choices-
distinguishes economics from the other
Economics as defined:
ECONOMICS- is a social science that
deals with how individuals organize
themselves in order to distribute scarce
resources to create products and
services that meet man's infinite and
multiplying desires and needs.
Economics as a Science
 It is a science because, in relation to
those general laws and principles, it is
an organized body of facts,
orchestrated, structured and
systematized. (Observation, hypothesis
formulation, knowledge set,
experimentation, inference,
generalization)
Economics as a Science
 Using some kind of logic based on a
collection of systematic relations,
economic analysis attempts to describe
economic events.
 It is social science since individuals or
societies and their actions,
unpredictable in nature, are the subject
of economics.
RELATIONS OF ECONOMICS TO OTHER
SCIENCES
SCOPE OF ECONOMICS
1. Microeconomics (from the Greek word
mikros, meaning “small”)
 Takes a closer view on the behavior of
individual markets work. It focuses on
how individual households, firms and
industries make their choices, and the
interaction of such decisions in the
particular market.
SCOPE OF ECONOMICS
1. Microeconomics (from the Greek word
mikros, meaning “small”)
 Example: Determine the price of rice
and how much of it is produced and
sold. It would also look at how
regulations and taxes affect the price
and supply of rice.
SCOPE OF ECONOMICS
2. Macroeconomics (from the Greek word
makros, meaning, “Large”)
 Deals with the problem of the economy
as a whole. It looks at the aggregate
prices, production and income.

 Example: The study of the Philippine

economy would analyze the gross
national income and total employment
Let’s check your learning!

Get ¼….
True or False:

1. Microeconomics deals with economic

behaviour of individual household,
firms and industries.
2. Macroeconomics deals with economic
problem as a whole such as aggregate
prices, production and income.
True or False:

3. The Greek word OIKOS meaning

management.

4. The Greek word NOMOS meaning

household.
5. Economics is the wise production and
use of wealth to meet demands or
needs of the people.
True or False:

6. Macroeconomics it takes a closer view

on the behavior of individual markets
work..
7. Microeconomics deals with the
problem of the economy as a whole.
Enumerate:

Give at least three sciences that has a

relation to economics.

8.
9.
10.