12 Applied Economics Quarter 1 – Module 2 Application of Economics Applied Economics – Grade 12 Alternative Delivery Mode Quarter 1 – Module 2: Application of Economics First Edition, 2021 Republic Act 8293, Section 176 states that: No copyright shall subsist in any work of the Government of the Philippines. However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties. Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names, trademarks, etc.) included in this book are owned by their respective copyright holders. Every effort has been exerted to locate and seek permission to use these materials from their respective copyright owners. The publisher and authors do not represent nor claim ownership over them. Published by the Department of Education Secretary: Leonor Magtolis Briones Undersecretary: Diosdado M. San Antonio Development Team of the Module Writers: Rhyan R. Eronico Ma. Lowella T. Cenisero Editor: Arcadio J. Malmis PhD Management Team: Bianito A. Dagatan EdD, CESO V Schools Division Superintendent Faustino N. Toradio PhD Assistant Schools Division Superintendent Felix C. Galacio Jr. PhD EPS, Mathematics Josephine D. Eronico PhD EPS, LRMDS Printed in the Philippines by Schools Division of Bohol Department of Education – Region VII, Central Visayas Office Address: Telefax: Tel Nos. E-mail Address: 0050 Lino Chatto Drive Barangay Cogon, Tagbilaran City, Bohol (038) 501 – 7550 (038) 412 – 4938; (038) 411-2544; (038) 501 – 7550 depedbohol@deped.gov.ph Lesson 1: Economics on Poverty Learning Competency: Examine the utility and application of applied economics to solve economic issues and problems. At the end of the lesson, you are expected: describe the role of economics in solving poverty, examine the role of economics in pursuing food security; and explain the role of economics in infrastructures. What is it? Poverty is a restricting condition experienced by millions of families that prevents them in attaining the minimum level of consumption for subsistence living. Two categories of poverty: Absolute poverty refers to the lack of income to buy the basic food and necessities for subsistence living. Relative poverty refers to the structures on how the national income is being distributed among households in an economy. Interventions in addressing the problem of Absolute Poverty: Provide free meals Provide housing Provide adequate clothing Interventions in addressing the problem of Relative Poverty: Improve income distribution like taxation, income transfers and other programs focuses on income generation. What’s more? Exercise 1 Directions: Write TRUE if the statement is correct and FALSE if it is wrong. 1. Poverty limits the attainment of level of consumption for subsistence living. 2. Relative poverty is the lack of income to buy the basic food and necessities for subsistence living. Exercise 2 Directions: Answer the given question. Give at least two roles of economics in solving poverty. Lesson 2: Economics on Food Security What is it? Pursuing food self-sufficiency, the country must focus on the development of agriculture especially in the production of food grains. Food security implies that the country and its people should have enough income to purchase food grains at the cheapest price anywhere in the world. On the other hand, there are other initiatives that can increase the productivity of the agricultural sector as follows: Invest irrigation facilities Provide cheap fertilizers and inputs Organize farmers with small farm lands so they can reap the benefits of economies of scale through the mechanisms of cooperative Construction of farm-to-market roads Expansion of agricultural extension programs Development of post-harvest facilities can contribute to agricultural productivity Thus, enhancing the productivity of the agricultural sector can contribute to the achievement of food security. This is not done through the food self-sufficiency but in increasing the income of farmers through various means and cultivating a variety of agricultural crops as well as the income of workers in the other economic sectors that will provide sufficient resources so they can purchase cheaper food grains sourced anywhere in the region and the world What’s more? Exercise 1 Directions: Write TRUE if the statement is correct and FALSE if it is wrong. 1. Food security implies that the country and its people should have enough income to purchase food grains at the cheapest price. 2. Providing cheap fertilizer is one of the initiatives that can increase the productivity of the agricultural sector. 3. Enhancing the productivity of the agricultural sector can contribute to the achievement of employment. Exercise 2 Directions: Answer the given question. Give at least three roles of economics in pursuing food security. Lesson 3: Economics on Infrastructures What is it? Similar to the role of human capital on economic growth, physical infrastructure facilities and expands transactions likewise fuel economic growth like the following: Construction of roads Building bridges Other networks in transportation and communication Well-developed the energy infrastructure that can be relied in supplying cheap electric power to households, businesses, and other sectors Although there is recognition on the vital contributions of strong infrastructure on the economy, many low-income countries including Philippines have weak infrastructure. The inadequate infrastructure in the country has debilitating effects on the following: Individuals Households Business firms Economy The major reason for this inadequate expansion of the infrastructure is the insufficient funds to finance the huge cost of constructing these networks. Billions of pesos are needed to construct road projects and highways. Construction costs of energy plants to supply electricity are also very prohibitive. Putting up a subway for a mass transit system in a Metropolis is just like constructing several tall buildings below the ground for a distance of several kilometres which is very costly. What’s more? Exercise 1 Directions: Write TRUE if the statement is correct and FALSE if it is wrong. 1. The major reason for inadequate expansion of the infrastructure is the availability funds. 2. Construction of bridges fuel economic growth. 3. Inadequate infrastructure in the country has debilitating effects on individuals. Exercise 2 Directions: Answer the given question. Give at least two roles of economics in infrastructure. Assessment Directions: Read each item carefully and write the letter of your choice on your answer sheet. 1. It is a restricting condition experienced by millions of families that prevents them in attaining the minimum level of consumption for subsistence living. A. Food security C. Poverty B. Infrastructures D. Unemployment 2. This refers to the lack of income to buy the basic food and necessities for subsistence living. A. Absolute poverty C. Millennial poverty B. Common poverty D. Relative poverty 3. This refers to the structures on how the national income is being distributed among households in an economy. A. Absolute poverty C. Millennial poverty B. Common poverty D. Relative poverty 4. The following are ways in solving the problem of absolute poverty except __________. A. Provide free meals C. Provide income generation program B. Provide housing D. Provide adequate clothing 5. Which of the following initiatives increase the productivity of the agricultural sector? A. Invest irrigation facilities B. Provide cheap fertilizers and inputs C. Construction of farm to market roads D. All of the above 6. Enhancing the productivity of the agricultural sector can contribute to the achievement of _____________. A. Employment C. Poverty reduction B. Food security D. Taxability 7. How to increase productivity of agriculture? A. Providing sufficient resources B. Increasing the income of the farmers C. Cultivating a variety of agricultural crops D. All of the above 8. How does infrastructure fuel economic growth? A. Building bridges C. Network in transportation B. Construction of roads D. All of the above 9. Sufficient infrastructure has debilitating effects on households. A. True B. False C. Either A or B D. No answer 10. What is the major reason for inadequate expansion of infrastructure? A. Enough supply of electricity B. Insufficient funds C. Increasing inflation rate D. Imposing travel restrictions Our greatest glory is not in never failing – but in rising every time we fall. - Confucius APPLIED ECONOMICS Answer Sheet Name: ________________________________________________________________________ Grade & Section: ________________ Score: _______ Quarter 1 – Module 2 Lesson 1 What’s more? Exercise 1 1. 2. Exercise 2 1. 2. Lesson 2 What’s more? Exercise 1 1. 2. 3. Exercise 2 1. 2. 3. Lesson 3 What’s more? Exercise 1 1. 2. 3. Exercise 2 1. 2. Assessment 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Reference Tereso S. Tullao Jr., P. (2016). Applied Economics for a Progressive Philippines. Quezon City: Phoenix Publishing House, Inc.
