ECONOMICS

AS APPLIED SCIENCE
Applied Economics
7:30 – 8:30 am
 SPECIFIC OBJECTIVES

At end of this lesson, you are expected to:

1. Define Applied Economics.
2. Discuss why economics is an applied science.
3. Understand how applied economics work.
LABOR
RABLO
CAPITAL
TACPAIL
SCARCITY
CATRICSY
ECONOMICS
MONOSCIEC
What is Applied Economics?
• APPLED ECONOMICS is the study of
economics in relation to real world situations.
It is the application of economic principles
and theories to real situations, and trying to
predict what the outcomes might be.

• APPLIED ECONOMICS is the study of

observing how theories work in
practice..
ECONOMIC DEVELOPMENT is the
sustained elevation of an entire
society and social system toward a
better and more humane life.

Michael Fajardo
Sustenance Refers to ensuring that society is able to
provide for basic need like food, shelter,
health, and protection.
Self-esteem Refers to self-respect, reputation, pride,
and acknowledgement.

Freedom Involves providing a wide variety of

choices for societies as well as minimizing
external limitations
 Is a proposition about certain related
THEORY variables that explains a certain phenomenon.
It proposes a general principles regarding a
phenomenon which is scientifically
acceptable.

MODEL A framework or representation of

significant principles and describes
how variables are related.
 POPULATION THEORY
-Proposed by Thomas Malthus
in 1789
- Based on his observations of
statistical data on population
growth and food supply,
Malthus proposed a principle
that population growth
proceeds at an exponential
rate while food production
increases at an arithmetical
rate.
 What is the Importance of Applied Economic
Application?
1. Applying economics to a company, household or a country
helps sweep aside all attempts to dress up a situation so
that it will appear worse or better that it will appear worse
or better than it actually is.
- applied economics becomes a powerful tool to
reveal the true and complete situation in order to
come up with things to do.
EXAMPLE
Applied Economics can assess the profits of a certain
company.
The result can help the executives to do some
strategies in order to boost its sales.
2. Applied Economics acts as a mechanism to determine
what steps can reasonably be taken to improve current
economic situation
- to examine each aspect, one can strengthen areas
where performance is weak.

EXAMPLE
- purchase of goods and services
- usage of raw materials
- division of labor within entity