Social Science 5: Economics-PDF

SOCIAL SCIENCE 5: ECONOMICS ECONOMICS AS A SOCIAL SCIENCE | MODULE 2 LESSON NO 2.1 At the end of this module, the student should be able to: 1. define the meaning of economics as a social science; 2. explain why economics is considered as a social science in view with other natural sciences; and 3. discuss why economics uses scientific methods as a bases for fact finding procedures. Suggested Time: 30mins. | Actual Time Spent: ____min(s) In the previous discussion, the importance of studying and understanding Economics especially on how individuals can apply economics in their everyday lives was already explained. It also emphasized how each individual’s decision making might result to a cost or a benefit. At your age right now, you must have asked yourself questions such as: 1. If I were to put up my own business someday, would there really be a need to hire workers? 2. Would it be possible for the Bangko Sentral ng Pilipinas to just print money to combat extreme poverty amidst COVID19 pandemic in the Philippines? 3. Why do countries trade? Have you arrived with some answers to this? Suggested Time: 5 mins. | Actual Time Spent: ____min(s) 1. The questions presented above have to deal with the topic to be discussed in this module. These have got to do with Economics. So, what then is Economics? A lot of Economics authors shared numerous definitions of economics such as: Paul Samuelson and William Nordhaus (2011): “Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people”. McConnel and Brue (2009): “Economics is a social science concerned with how individuals, institutions, and society make optimal (best) choices under conditions of scarcity”. Parkin and Bade (2002): “Economics as a social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity”. What is the Extent of Economics? PSHS Social Science 5: Economics | Page 1 of 6 Based on the definitions mentioned above, Economics boils down to very specific elements, and these are: 1. limited or scarce resources; and 2. unlimited human desires or wants. Basically, Economics is concerned on the study of how to properly allocate limited resources in order to attain the maximum satisfaction with only limited resources. It also deals with the study on how the economy functions and explains how individuals and groups of individuals interact in a society. Economics, likewise, tries to determine how much production needed to compensate the level of consumption in one economy. And with the goal of properly distributing scarce resource throughout the economy, it also aims to attain maximum efficiency in the landscape of production to obtain the desired level of output. To narrow thing down about Economics as a discipline, a series of viewpoint is cited below: 1. It is the use scares resources to produce valuable commodities. 2. It highlights that all produced products must be equitably distributed to people. 3. It involves proper allocation of scarce resources to satisfy limited wants. 4. It deals with production, consumption, and distribution. 5. It examines how to attain maximum efficiency and to obtain the desired level of output. Is Economics considered as a Social Science? If yes, how so? Let Us Define First What Social Science is. Merriam-Webster Dictionary defines Social Science as “a branch of science that deals with the institutions and functioning of human society and with the interpersonal relationships of individuals as members of society”. Based on this definition we can dissect that social science is: 1. a branch of science – it involves scientific processes to explain societal activities or phenomena in this world. It uses systematic structure of studying things in order to come up with rational conclusions or decisions impacting the society. 2. deals with social Institutions – it comprises with a large group of individuals, sectors, or institutions having the same interest in a particular society; and 3. deals with functioning human society with interpersonal relationships – as it involves a groups of people interacting in a complex yet systematic processes in order to attain their respective economic goals; it involves people having a dedicated purpose to serve as functioning machine in the society. From the definitions of Economics and Social Science as well as the narrowed context of Economics, we can come up a varying list of reasons as to why it is considered as a social science and these are: 1. Economics tries to explain various events or activities of people in a society and simplifies complex societal transactions. 2. Economics addresses several social issues like remedying the unemployment level of a particular economy, among others. 3. Economics investigates more on how to allocate limited resources. 4. Economics answers the questions on what, how, and for whom to produce the goods and services in the society. PSHS Social Science 5: Economics | Page 2 of 6 5. Economics provides the government a key tools to form policies to achieve economic growth and development. Behind the Science of Economics: Most of the economists use scientific and mathematical tools to explain changes, developments, or cycles in the economy or to provide appropriate economic policies or strategies as remedies to certain economic problems. In the world of natural sciences, on the other hand, scientific methods or processes are used in order to come up with distinct theories or laws that will explain a natural phenomenon. For instance, chemists, biologists, and physicists conduct experiments to achieve certain conclusions and/or recommendations. While this procedure is highly objective, the same may not be necessarily applicable in the field of Economics since human behavior varies and is highly dynamic. For this reason, economists use generalized assumptions to varying situations for them to systematically observe and analyze data and information and eventually arrive at a conclusion and/or recommendation. Having said all these, it can be deduced that Economics is considerably known as a Social Science. While Economics is a social science it is still and also bounded with the following scientific approaches, among others: 1. Economics uses simplified modeling to easily create a factual and clear explanation of concepts, flow of processes, and correlation and relationship between causes and effects. Example: Figure 1 below is a simplified model on how money and commodities flow in a simple economy, where households work interdependently with industries or the firms. This model shows that household provides firms the factors of production (land, labor, capital) in order for the latter to produce the desired goods and services. On the other hand, firms also provide the necessary commodities for the households to consume. This Figure also explains that with the transactions done by both household and firm, flow of money or income also takes place. Since the goods and services produced by the firms are not for free, household must have to pay. Likewise, firms are also obliged to pay the households for their factors of production (rent for the land use, wages for the labor, interest for the capital). Figure 1 Circular Flow Model of Income and Commodities Produced 2. Economics make use of statistical tools in order to make rational and quantitative projections on certain phenomena and to validate subjective assumptions. PSHS Social Science 5: Economics | Page 3 of 6 Example: Figure 2 below shows a comparative growth in the economy from year 2000 to 2015. This data may be used to assess the overall current production of the country and may be used to strategize on how to attain further growth. Figure 2 Comparative GDP 3. Economics uses mathematical models in order to quantitatively explain an economic event. In this manner the government uses such tools to create economic policies to address economic problems. mathematical models can also be used for practical decision making in everyday life. Here is an example of an application of basic mathematics in the field of business and finance: When someone deposits money in a bank, it will earn interest on the part of the depositor. And when someone borrows money in a bank then there is also an interest to be paid by the person who borrows the money. Let us say that Mr. XYZ deposited P1,000.00 and expected to earn 10% in a year, therefore, this person earns a total of P100.00. This simple mathematical example will always tell us the importance of mathematical analysis to convey proper decision making using the science of economics. Considering all these ideas, it goes to show that Economics is not just an ordinary field of Social Science. It is a discipline that involves primarily how human interact in order to survive. Suggested Time: 20 mins. | Actual Time Spent: ____min(s) Given the discussion above, try this short activity as a form of a formative assessment. (Note: This is a non-graded activity). 1. Create your own flow model entitled “The Flow Model of how a Final Product Becomes Readily Available in the Market” (You may use agricultural products or industrial products as your subject. Label each part and provide a simple discussion about the model). PSHS Social Science 5: Economics | Page 4 of 6 2. Create a simple budget plan on how much money you would want to spend for each item that you usually consume on a weekly basis. And write a short paragraph of your impression regarding your weekly expenditures. Suggested Time: 4 mins. | Actual Time Spent: ____min(s) In summary, based on the definitions by numerous economics authors we can say that Economics’ key elements are: 1. limited or scarce resources; and 2. unlimited human desires or wants. Basically Economics is concerned more on the study of how to really properly allocate limited resources in order to attain the maximum satisfaction of individuals given limited resources. Further, Economics is considered as a Social Science because it dwells more on how human behave in a society especially when it comes to his or her decision making given a limited resource to allocate. It uses simplified modeling, graphical and mathematical tools to explain a particular phenomenon in the economy. Suggested Time: 1 min | Actual Time Spent: ____min(s) References: Textbooks Medina, Roberto G. (2003) Principles of Economics – Rex Bookstore Inc. Pagoso, C., Dinio, R., Villasis, G., (2006) Introductory to Macroeconomics – Revised Edition – Rex Bookstore, Inc. Samuleson, P. and Nardhaus, W. (1998) Economics – 16th Ed. McGraw – Hill Companies, Inc. Online Materials Political Science. (n.d.) In Merriam-Webster’s Dictionary. Retrieved from http://www.merriam- webster.com/dictionary/Political Science Psychology. (n.d.) In Merriam-Webster’s Dictionary. Retrieved from http://www.merriam- 1 2a 2b webster.com/dictionary/Psychology PSHS Social Science 5: Economics | Page 5 of 6 Sociology. (n.d.) In Merriam-Webster’s Dictionary. Retrieved from http://www.merriam- webster.com/dictionary/ Sociology S.E.G. Lea Decision and Choice: Economic Psychology. International Encyclopedia of the Social & Behavioral Sciences. 2001 Tejvan Pettinger. The Relationship Between Economics and Politics. Retrieved from https://www.economicshelp.org/blog/11298/concepts/the-relationship-between-economics-and- politics/. 2019 Prepared by: Rudyrick L. Tabalon Reviewed by: Jefferson G. Nuñeza Position: Special Science Teacher II Position: Special Science Teacher IV Campus: PSHS – SRC Campus: PSHS – SMC PSHS Social Science 5: Economics | Page 6 of 6 SOCIAL SCIENCE 5: ECONOMICS ECONOMICS AS A SOCIAL SCIENCE | MODULE NO. 2, LESSON NO. 2.2 At the end of this module, the student should be able to: 1. enumerate some other fields of Social Science; 2. establish and explain the interaction between Economics and some other fields of Social Science; and 3. evaluate the importance of Economics as a Social Science. Suggested Time: 30mins. | Actual Time Spent: ____min(s) The meaning of Economics as a Social Science as well as the various tools or methods used to explain human behaviors in a given society were already discussed in the previous module. Like other natural sciences, economists use an array of scientific techniques in order to establish theories or laws, to analyze information, and to come up with conclusions or recommendations to solve arising issues of humanity. These techniques, among others, may either be: 1. simplified modeling; 2. statistical/graphical methodologies; or 3. mathematical modeling. Before we proceed to our new topic, can you give your insights or thoughts about the images presented below? Please write them on the space provided. (Maximum time allotted for this is only 5 minutes) Your Short Insights ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ ____________________________ __________________ Figure 1: Who’s the Photo Bomber? Image from: NOEL CELIS/AFP/GETTY IMAGES PSHS Social Science 5: Economics | Page 1 of 8 Your Short Insights _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ ___________________ Figure 2: The Psychology of Choice Image from: https://www.freepik.com/premium-vector/businessman-confused-with-money_4907313.htm Your Short Insights _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _________ Figure 3: Vote for Me! Image from: Machines and money in the Philippine election ED WA R D AS PI N A L L - 1 0 MA Y, 2 0 1 6 Your Short Insights _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ _____________________________ ________________________ Figure 4: The Infograph of Poverty Image from PSA Northern Mindanao Region X Suggested Time: 5mins. | Actual Time Spent: ____min(s) PSHS Social Science 5: Economics | Page 2 of 8 The photos above are representations of some disciplines of Social Science. Now we will take deeper a look on how these different disciplines relate to Economics. The interaction between Economics and other disciplines of Social Science is highly significant. This interaction is linked with some aspects in explaining human behavior, however, to some extent, Economics has certain limitations relative to other fields. The following shows the interrelatedness that Economics may have and the degree of differences with some disciplines of Social Science. 1. Sociology – “It is the science of society, social institution, and social relationships specifically: the systematic study of the development, structure, interaction, and collective behavior of organized groups of human beings” (Merriam-Webster Dictionary). For one good reason, sociology can highly interrelated with economics because both disciplines are highly focused on societies. Figure 1 shows the real picture of our societies today, most especially in urban societies, where people live in two distinct environments. Some live in crowded slum areas and some in a much more decent houses like condominiums or high- end subdivisions. The study on the existence of this reality and the interventions that governments do are both relevant concerns of Sociology and Economics. For a sociologists and economists, poverty is a social condition brought about by unequal share or distribution of wealth and income. Both disciplines might also agree that the lack of financial resources may also result to lesser opportunity to address basic necessities like food, medicine, housing, or even educational needs. However, the main difference between Sociology and Economics is that Sociology focuses more on the social aspect of a society. According to an article written by Ajay Bhatt “sociology is the study of social relationships or social activities but economics is the study of only the economic activities of man”. For example, a group of students who try to understand how religion affects human behavior in a particular country is a good example of a study in sociology. Another would be a study on how necessary women empowerment is to combat gender biases. Economics, on the other hand, deals with the societal issues on consumption and production and the allocation of our scarce resources to attain satisfaction of each individual. It also concentrates on the status of the aggregate economy such as conditions of economic growth, and levels of inflation and employment. The study of Economics also assesses economic policies to promote economic well-being of every person in a society. 2. Psychology – “Merriam-Webster Dictionary defines it as the science of mind and behavior, the mental or behavioral characteristics of an individual or group, the study of mind and behavior in relation to a particular field of knowledge or activity.” This definition tells us that psychology deals with all kinds of human behavior specially on how or what causes them to respond to certain activities. Having known what Economics is, we are brought to the question of how economics interacts with psychology? An article entitled Decision and Choice by S.E.G Lea cited in the book of International Encyclopedia of the Social & Behavioral Sciences 2001, mentioned that “Economic Psychology is the interdisciplinary investigation of the interface between psychology and economics. And It is concerned with the psychological basis of the economic behaviors of individuals, and the impacts of economic processes on individuals' psychology. It uses both economic and psychological concepts and research methods”. PSHS Social Science 5: Economics | Page 3 of 8 A good example of a human activity that may be a subject of a study of both Economics and Psychology is the determination of the level of a person’s perception when it comes to savings and borrowings. It explicitly looks at the causes and effects of a person’s rational choice on whether to save more or to borrow more. The difference, however, is that psychology is more grounded on mental perspectives rather than assumed societal or economic phenomena. The 2nd image above shows possible psychological issues that many people may be facing today as a result of the COVID19 crisis. These issues may influence human behavior or decision making. That is Psychology. Economists, on the other hand, assumes rationality of one’s thinking in answering the fundamental economic problems of what, how, and for whom to produce goods and services such as society’s basic necessities. 3. Political Science – “It is a social science concerned chiefly with the description and analysis of political and especially governmental institutions and processes” (Merriam-Webster Dictionary). Economics is highly intertwined with politics, although economics is always and should be apolitical in nature. And even so, economies these days are entirely influenced by economic policies formulated by different governing bodies. To establish the link between these two fields of social sciences, let us look into the significant involvements of political science to economics. In this way, we can see that both are related and interdependent disciplines. The Involvement of Political Science to Economics: A. Attainment of a Sustainable Economic Development - Political leaders must adhere to the scope, purpose, and direction of their administration, and realize that a sustainable economic development is always dependent on the strength and stability of the government. A well-planned economic policies redefines economic goals securing all individuals in the society in the long-run economically. All of these are major key responsibilities of political leaders to take with the guidance of their economic advisers in order to exhaustively exploit all the possibilities in capturing its major goal. B. The Kind of Economic System that Solves Economic Problems– Economic system is another key element in realizing economic development goals. It must function well in accordance to how political leaders design such system in properly addressing fundamental economic problems. C. Sound Financial Resources – Financial resource is undeniably the back bone of any given economy, because it keeps the economy running. Political leaders, in this case, track all financial resources of its nation and therefore must formulate a effective national budgeting scheme. Because a budget influences economic policies and provides security to a country. Consequently, Political Science and Economics are closely related social sciences. The two cannot be separated specially in nation building. According to Tejvan Pettinger (2019), “Many economic issues are seen through the eyes of political beliefs. For example, some people are instinctively more suspicious of government intervention. Therefore, they prefer economic policies which seek to reduce PSHS Social Science 5: Economics | Page 4 of 8 government interference in the economy. For example, supply side economics, which concentrates on deregulation, privatisation and tax cuts”. The only underlying difference between Economics and Political Science is that Economics focuses more on how to properly run and influence the economy regardless of the country’s existing economic system. Whereas, Political Science concentrates on government and politics, influence and authority created over people, and the relationship between the leader and its subordinates. 4. History – Some experts in the field of history believes that a good historian must sufficiently possess a strong background of the fundamentals of economics. To some extent, there is a branch or type of history known as economic history that deals with the understanding of past events through economics theories and concepts. An example for this is the study on the relationship between free trade and economic development. Studies have shown that opening a county’s domestic market to the international community creates significant impact to its economic development. China, for instance, used to have a very backward economy and when it opened its market, it took a major leap from backward to the most sophisticated economy in the world today. (read the article from: https://www.stlouisfed.org/publications/regional-economist/april-2016/chinas-rapid-rise-from- backward-agrarian-society-to-industrial-powerhouse-in-just-35-years) The relationships between Economics and History is very strong and beyond contestation. This is because what we learn from the past help us manage what we have today. For instance, the evolution of market system, which includes money transactions, provides us ways on how to live in a much convenient way. 5. Statistics – Statistics is not a social science discipline. However, it is a highly interdisciplinary field, since its tools are significant in explaining social circumstances. Like in the field of Economics, Statistics is used to process and analyze significant economic data. It objectively explains phenomena providing quantifiable metrices allowing people to understand current economic situations. It also helps researchers to detect correlations between economic variables like taxes, levels of consumption, among others. Since the very essence of Economics is a social science that deals with human economic activities then data analysis is a very crucial tool in economics. Both Mathematics and Statistics will always be part of economics because without them, economic decision making would not be quantitatively grounded.. The Importance of Economics as a Social Science There are a lot of reasons why learning and understanding economics is very important. According to Tejvan Pettinger (2019) “Economics is concerned with the optimal distribution of resources in society”. It involves a variety of individual or societal activities, market conditions and macroeconomic activities. Below are some of the reasons why economics is important: 1. It teaches us the importance of valuing the things around us. Given how limited or scarce resources are, wastage is not an option. This includes financial and capital resources, as well as time resource. 2. It provides us options or choices. If we are given with an array of choices, we are given the opportunity to consider the costs and the benefits while making a decision. If the cost of an option exceeds its benefit, rationally speaking, we would less likely choose for its favor, otherwise, it would result to a misjudgment and end up losing a valuable resource. PSHS Social Science 5: Economics | Page 5 of 8 3. It gives us an overall knowledge and perspective of the economy. Understanding the latest economic trend is important. Knowing the latest inflation rate and interest rate, for instance, will help us decide on when to spend less or to spend more. In this manner, we will be trained to be socially vigilant and to be economically independent individuals. 4. It provides the government the right balance on formulating economic policies. – The government must decide for a right balance and combination of economic policies to benefit the general public. This is because the principal job of the government is to provide the people its general social welfare to help them improve their living standards. 5. It can correct market failures – Over and underproduction of commodities are economic inefficiencies or market failures and might result to hyperinflation or hyperdeflation. These further affect both firms and consumers as extreme changes in prices may cause them to mismanage and (for firms) to eventually shut down and (for consumers) to consume less. Therefore, economics provides efficient ways to prevent these forms of market failures. These give us a concrete idea on how relevant Economics is as an academic discipline, and by understanding Economics, individuals, like you, are trained to become significant part of nation building. Suggested Time: 20 mins. | Actual Time Spent: ____min(s) Short individual activity: (This is a graded activity) Instructions: Answer what is required where each item is worth 1 point. 1. Identify the following statements below as to what field study or discipline is being presented. Write either Economics, Psychology, Sociology, Political Science, History, or Statistics. a. A study that digs on past events and explains the different incidents that transpired during different ancient civilizations. b. The Department of Health and the Department of Social Welfare and Development is conducting a research on how Covid19 affects mental health. c. A data on a 5-year comparative level of economic growth is presented using machine learning. d. The unemployment rate the Philippines is rising because of the current pandemic. e. A study that deals with how people interact with each other relative to culture and traditions. f. It explains the current level of inflation of a country. g. A study of the past and focuses more on an early civilization. h. It deals with the study of choices of individual to satisfy their basic needs. i. A study of voting patterns and the creation of political parties. j. It uses a scientific tool or methodology in order to come up an idea on how people impact others. k. A social science that inspect the methods by which goods are produced. l. It concentrates on how political set-up is being organized. m. A study that dwells on the interest of a complex society. n. A social science that focus more on mental processes and human behavior. o. It explains the foundation of human interest in capturing power and control. 2. Based on what you have learned earlier in what way/s can you apply economics in your everyday life? (5 pts. See rubric) Suggested Time: 2 mins | Actual Time Spent: ____min(s) PSHS Social Science 5: Economics | Page 6 of 8 As a summary: 1. All the fields of disciplines mentioned above focus on human behavior, either as an individual or as a group. 2. Psychologists, sociologists, political scientists, historians, statisticians and economists share common goal in attaining information that would explain events and phenomena in the society around us. 3. Sociology focuses only in the social aspect of a society and attempts to explain how culture exist and how social structures function. Whereas Economics investigates more on the economic aspect of the society, like how market works, how prices influence the behavior of buyers and seller, among others. 4. Psychology deals with all kinds of human behavior specially on how or what causes them to respond to circumstances. While this is somehow true for Economics, Economics uses a fundamental orientation of human behavior on the basis of attaining people’s unlimited desire given limited resources. 5. Economics is always and should be apolitical in nature. However, all economic activities, in one way or another, are entirely influenced by economic policies formulated by the government. 6. The link between economics and history is very strong and beyond contestation. This is because economists make use of historical data to make projections and to consider in economic decision making. 7. The essence of economics is to understand and explain a certain economic phenomenon and data analysis is a very crucial tool in attaining such. Mathematical and Statistical tools facilitate in crafting of economic theories and in measuring economic factors or variables. 8. Economics is also important as a field of social science, as it: a. teaches us the importance of valuing the things around us; b. provides us information on choices; c. gives us overall knowledge of the economy; d. provides the government the right balance on formulating economic policies; and e. corrects market failures. Suggested Time: 3 mins | Actual Time Spent: ____min(s) PSHS Social Science 5: Economics | Page 7 of 8 References: Textbooks Medina, Roberto G. (2003) Principles of Economics – Rex Bookstore Inc. Pagoso, C., Dinio, R., Villasis, G., (2006) Introductory to Macroeconomics – Revised Edition – Rex Bookstore, Inc. Samuleson, P. and Nardhaus, W. (1998) Economics – 16th Ed. McGraw – Hill Companies, Inc. Online Materials Bhatt Ajay. What Are the Differences Between Sociology and Economics? Article Retrieved from https://www.preservearticles.com/sociology/differences-between-sociology-and-economics/1891 Political Science. (n.d.) In Merriam-Webster’s Dictionary. Retrieved from http://www.merriam- webster.com/dictionary/Political Science ( Psychology. (n.d.) In Merriam-Webster’s Dictionary. Retrieved from http://www.merriam- 1 2a 2b webster.com/dictionary/Psychology Sociology. (n.d.) In Merriam-Webster’s Dictionary. Retrieved from http://www.merriam- webster.com/dictionary/ Sociology S.E.G. Lea Decision and Choice: Economic Psychology. International Encyclopedia of the Social & Behavioral Sciences. 2001 Tejvan Pettinger. The Relationship Between Economics and Politics. Retrieved from https://www.economicshelp.org/blog/11298/concepts/the-relationship-between-economics-and- politics/ (2019). Yi Wen., (2016) China's Rapid Rise: From Backward Agrarian Society to Industrial Powerhouse in Just 35 Years. Federal Reserve Bank of St. Louis. https://www.stlouisfed.org/publications/regional- economist/april-2016/chinas-rapid-rise-from-backward-agrarian-society-to-industrial-powerhouse-in- just-35-years Prepared by: Rudyrick L. Tabalon Reviewed by: Jefferson G. Nuneza Position: Special Science Teacher II Position: Special Science Teacher IV Campus: PSHS – SRC Campus: PSHS – SMC PSHS Social Science 5: Economics | Page 8 of 8 SOCIAL SCIENCE 5: ECONOMICS PITFALLS IN ECONOMIC REASONING | MODULE NO. 3 LESSON NO. 3.1 At the end of this module, the student should be able to:  Identify pitfalls in economic reasoning;  Detect fallacies given a set of arguments; and  Adopt an objective approach in economic reasoning. Suggested Time: 1 min | Actual Time Spent: ____min(s) Economic reasoning is subject to common errors in analysis that can lead to faulty conclusions. In this module, we explore the common errors in economic analysis. Consider the following scenarios below and think whether the statements are true. If not, what makes the statement erroneous? 1. Cutting trees is profitable for forestry companies and this will benefit all Filipinos. 2. Individuals should stop wearing face masks since the number of people infected by the virus keeps on increasing. 3. A handful of children who were vaccinated were diagnosed with autism. Therefore, vaccination must be the cause of autism. Suggested Time: 5 min | Actual Time Spent: ____min(s) The scientific approach is important in economic reasoning. Observing economic affairs and the use of statistics and historical records are among the usual methods economists employ in developing sound economic analysis. However, just like in other forms of scientific inquiry, fallacies or errors in logical reasoning which lead to unsound arguments are common among budding economists. Listed below are the common fallacies in economic reasoning (Samuelson & Nordhaus, 2010). 1. Post hoc fallacy The error in economic analysis occurs when we assume that an event was caused by another event just because the first event occurred before the second event. Example: Many online stores became profitable this time of pandemic. Thus, pandemics will cause businesses to earn more profit. PSHS Social Science 5: Economics | Page 1 of 3 2. Fallacy of composition The error happens when we assume that what is true for one individual will be true for all others. Example: If a person leaves his or her home earlier, he or she can avoid traffic. Thus, if all people leave their homes earlier in the morning, everyone would avoid traffic. 3. Failure to hold other things constant This fallacy occurs when we analyze the effect of a variable on another variable without holding other things constant. Example: When the price of gasoline increases, car owners will buy lesser amount of gas. (The consumption of gas for travel is not only affected by price, but there are other variables like income, purpose of travel, etc. which can affect the consumption of gasoline. Failure to hold other variables constant which affect the economic phenomenon being observed will not rule out the possibility of other factors changing. Thus, the ceteris paribus assumption is usually used in economics to assume that all other variables are held constant. Now, it’s time to ignite. Think of an answer to the next questions. Which among the scenarios in the Hook activity fall under the three common pitfalls in economic reasoning? Identify the type of fallacy being exhibited and explain why the scenario is fallacious using the pitfalls in economic reasoning. Suggested Time: 10 min | Actual Time Spent: ____min(s) Graded Assessment: 15 pts. (Rubrics: 2 pts. for correctly identifying the fallacy; explanation: 2 pts. for the content and 1 pt. for clarity) Instructions: Identify the fallacy being exhibited or shown in the following situations, and provide an explanation why the statement is erroneous. Write your answers on the space provided. Scan it or take a clear photo and email your answers to your teacher or send it via Viber or Line to your teacher (___________________). 1. If you stand up during a concert, you can have a better view of the stage. Thus, if everybody stands up, all can have a better view. Type of Fallacy:________________ Why:___________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ 2. The economy of a country improved after electing a president. Thus, electing a new president will improve a country’s economy. Type of Fallacy:____________________ Why:___________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ PSHS Social Science 5: Economics | Page 2 of 3 3. When taxes are raised by the government for all products, the overall economy of the country will improve since the government will have more funds for social services. Type of Fallacy:____________________ Why:___________________________________________________________________________ _______________________________________________________________________________ _______________________________________________________________________________ Suggested Time: 10 min | Actual Time Spent: ____min(s) New economists should be careful in analyzing economic issues and phenomena. Due to the complexity of economic relationships, individuals can be easily confused with how economic theories and analysis work. Studying economics involves many different variables in making broad generalizations. Thus, sound economic reasoning can be easy when we are conscious in avoiding the common pitfalls in economic reasoning. Non-graded: To apply what you have learned today, think of the common fallacies you encounter while reading news about the COVID-19 pandemic. Suggested Time: 4 min | Actual Time Spent: ____min(s) References: McEachern, W. A. (2006). Economics: a contemporary introduction, 7 e. USA: South-Western, Thomson. Samuelson, P. A, & Nordhaus, W. D. (2010). Economics. 19th ed. Boston: McGraw-Hill Irwin. Prepared by: Ariel S. Barrias Reviewed by: Pauline Kirstie H. Atumpag Position: SST-III Position: SST-III Campus: PSHS-CARC Campus: PSHS-CLC PSHS Social Science 5: Economics | Page 3 of 3 SOCIAL SCIENCE 5: ECONOMICS PITFALLS IN ECONOMIC REASONING | MODULE NO. 3 LESSON NO. 3.2 At the end of this module, the student should be able to:  Identify pitfalls in economic reasoning;  Lead discussions in correcting misconceptions about Economics; and  Adopt an objective approach in economic reasoning. Suggested Time: 1 min | Actual Time Spent: ____min(s) In our previous module, we discussed the common errors that people make when analyzing economic issues. Knowing these pitfalls in economic reasoning makes us more conscious on how to make cases, assumptions, and choices which appeal to logic and reason. To further strengthen our knowledge on how to avoid these pitfalls in economic reasoning, there are some principles that we need to remember. In this module, we will discuss the 10 principles in economic reasoning. Before we go to our topic, try answering these questions: 1. Given the stipend you receive from Pisay, where do you spend it and what is/are your basis why you spend it for those certain goods or services? 2. Have you experienced trading with someone? If yes, why did you trade with other people? 3. If you are not studying right now, what will you be doing? Is this the best alternative instead of studying? Suggested Time: 4 min | Actual Time Spent: ____min(s) The study of economics starts deductively with the recognition of certain key principles and assumptions underscoring human behavior. These principles guide us in understanding why and how humans behave economically in our society. Thus, the following principles in economic reasoning (Mankiw, 2011) have to be understood as these will serve as our guide in analyzing key economic concepts and issues in our future lessons. PSHS Social Science 5: Economics | Page 1 of 4 How individuals make decisions: 1. People face trade-offs -Since resources are limited, people need to make choices. e.g. the government identifies and prioritizes poor families as recipients for its social amelioration program due to limited amount of funds 2. People economize -Individuals choose the alternative which they perceive will give the greatest excess benefit over costs. e.g. when buying clothes, you tend to purchase clothes with reasonable prices 3. All choices involve costs -The opportunity cost of a choice is the foregone best alternative that was given up. e.g. when you spend your stipend and time in watching a movie, you cannot spend that time at home reviewing for your exams and spend your stipend for anything else. 4. Rational decisions occur at the margin -Almost all decisions are made by comparing and weighing the expected benefits over the expected costs of the next best choice. e.g. when you choose your course in college, you weigh the costs and benefits of each course and choose the course that you think will be the most beneficial (economic, interest…) 5. People respond to incentives -People’s behavior change in a predictable way when incentives are also changed. e.g. people tend buy more when taxes are lowered 6. Prices are extremely powerful incentives - The changing prices change people’s opportunity costs affecting the choices they will make. e.g. more people are attracted in purchasing stuff at discounted prices How people interact 7. Trade can make everyone better off -Trade happens when all parties involved will benefit from the exchange. e.g. the Japan-Philippines Economic Partnership Agreement (JPEPA) is a comprehensive bilateral trade and investment agreement between the two countries aiming to increase trade and investment opportunities 8. Markets are usually a good way to organize economic activity -Markets facilitate exchange and increases individual freedom. e.g. online markets are becoming popular for people who are afraid to purchase in wet markets and shopping malls due to COVID-19 9. Governments can sometimes improve market outcomes -Economic functions of the government are sometimes needed to produce better economic outcomes. e.g. the government sometimes intervene to regulate prices of basic necessities in times of calamity How the economy works as a whole 10. Individual and national standards of living depend on the ability to produce goods and services. -Increasing productivity increases income and standards of living Ignite time! Relate these principles to your everyday economic choices. PSHS Social Science 5: Economics | Page 2 of 4 Suggested Time: 10 min | Actual Time Spent: ____min(s) (Non-graded Assessment) Instructions: Write your answers below. Scan it or take a clear photo and email your answers to your teacher or send it via Viber or Line to your teacher (___________________). 1. Describe or identify some of the trade-offs faced by the ff.: A. Non-renewal of ABS-CBN’s franchise _______________________________________________________________________________ B. Your decision of choosing your core subject and elective _______________________________________________________________________________ 2. What is the opportunity cost of watching a movie instead of studying? _______________________________________________________________________________ 3. What is the importance of thinking about incentives in policymaking? _______________________________________________________________________________ Suggested Time: 5 min | Actual Time Spent: ____min(s) The central ideas about individual decision-making are that individuals face trade-offs among alternative goals, the costs of any actions are measured with the forgone opportunities, rational decisions are made by comparing marginal costs and marginal benefits, and individuals change their behavior as a result of the incentives they face. The central ideas about interactions among people are that trade can be mutually beneficial, markets coordinate trade among individuals, and the government can produce improved market outcomes when markets fail or market outcomes are inequitable. Lastly, the central idea about the economy as a whole is that productivity is the ultimate source of living standards. To end our lesson today, answer the graded assessment below. (10 pts.: 1 pt. each) Using the principles in economic reasoning, write A if the statement is TRUE. Otherwise, write B on the space provided. Scan it or take a clear photo and email your answers to your teacher or send it via Viber or Line to your teacher (___________________). PSHS Social Science 5: Economics | Page 3 of 4 ___ 1. Using your last money to buy a book novel or access a research publication is an example of a trade-off. ___2. The marginal benefit of a bottle of water is greater when you are not thirsty compared when you’ve just jog. ___3. Analyzing proper incentives for policymaking is important in changing the behaviour of people. ___4. If people have less money, they are probably going to spend more on goods and services. ___5. ‘Buy 1 Take 1’ offers will likely attract more buyers. ___6. Government interventions in markets are sometimes necessary to make market outcomes equitable. ___7. You trade to other people even if you don’t benefit from the exchange. ___8. A person who is thinking of buying a car faces a trade-off between the cost of the car and other things which he/she does not want to buy. ___9. When a CEO of a company is thinking of company expansion, the CEO’s decision will be based whether the expansion will lead to more profit. ___10. The price of a certain commodity is the only cost a rational person faces. References Suggested Time: 10 min | Actual Time Spent: ____min(s) Mankiw, N. G. (2011). Principles of economics,5th ed. Retrieved from http://fzp.ujep.cz/~vosatka/ERASMUS/Principles_of_Economics/Principles-of-Economics-- Mankiw-(5th).pdf McEachern, W. A. (2006). Economics: a contemporary introduction, 7 e. USA: South-Western, Thomson. Prepared by: Ariel S. Barrias Reviewed by: Pauline Kirstie H. Atumpag Position: SST-III Position: Suggested SST-III Time: 1 min | Actual Time Spent: ____min(s) Campus: PSHS-CARC Campus: PSHS-CLC Answer key : Graded Assessment (Knot) 1. A 2. B 3. A 4. B 5. A 6. A 7. B 8. B 9. A 10. B PSHS Social Science 5: Economics | Page 4 of 4 SOCIAL SCIENCE 5: ECONOMICS POSITIVE AND NORMATIVE ECONOMICS | MODULE NO. 4 LESSON NO. 4.1 At the end of this module, you will be able to: 1. differentiate normative and positive economics; 2. identify the uses of positive and normative statements; and 3. critique some statements using positive and normative analysis. Suggested Time: 1 min | Actual Time Spent: ____min(s) Part of the study of Economics is to know the condition of various finite resources, so that appropriate policy will be made and implemented to achieve economic efficiency. With that in mind, have you heard these words? “Dapat mabigyan tayo nang trabaho ng gobyerno para makaahon sa hirap” or “the inflation rate of the Philippines increases by 3 % compared to last year.” Familiar? Now, let us discover the difference between the lines and why it’s important to unravel these economic concepts. Suggested Time: 2 mins | Actual Time Spent: ____min(s) In studying Economics, you will encounter the two branches of economic reasoning, positive and normative economics. According to Samuelson & Nordhaus (2010), Positive Economics refers to the facts of an economy, while Normative Economics encompasses value judgments like ethical percepts and norms of fairness. Positive economics also targets to elaborate as to how society makes decisions about economic activities such as production, distribution, consumption, spending, and trade. In short, positive economics focuses on looking at the lenses wherein objectivity, scientific explanation, logical, empirical, and factual are the primal considerations. It describes the mechanism of the economy. While normative economics focuses on value judgment and opinion. In other words, what we people perceived as correct and true includes subjectivity in every line of reasoning. Concern on what ought to be and cannot be tested falls in the line of consideration. PSHS Social Science 5: Economics | Page 1 of 5 Positive Normative statements statements are are descriptive. prescriptive. , Claims that Claims that attempt to attempt to describe the prescribe how world as it is. the world should be. Source: Mankiw, illustrated by the author. Moreover, these two economic reasoning are used to formulate policies. In short, while they are distinct, these two work together. While it is true that the government will use various economic concepts, it also wants to test its applicability in the real world and still consider the individual, cultural and collective sentiments of the people. Thus, policymakers will have to push their arguments in the end. Furthermore, in the realm of politics, a normative statement is applied by the politicians to gain and acquire favor from the people rather than just using the positive statement. See the examples below.  It’s cloudy.  People are ought to help each other.  Innovation in technology prompted  Mobile phone gadgets are in dire the increase in sales revenue of many need to facilitate learning today. companies.  The 11,000 workers of ABS-CBN  The government should provide cause a rise in the natural occupation to jobless workers of ABS- unemployment rate of the country. CBN, to lessen the effect of the said cessation and still have moral hegemony amongst affected. You may watch this short video presentation about normative and positive economics.: https://youtube/AV_p_QntywA Suggested Time: 10 mins | Actual Time Spent: ____min(s) Let us gauge your understanding of the lesson presented. Kindly answer the following activity. This is a graded assessment. PSHS Social Science 5: Economics | Page 2 of 5 Activity 1: Defend Me Statement (50 points) Instructions: Evaluate the following statements and identify if it falls on a positive or negative statement. Justify your answer. Your answers will be graded using the rubrics that follows. Suggested Time:15 mins | Actual Time Spent: ____min(s) Description of econ-statement Your stand/answer Justification/Explanation 1.The Philippine government should shoulder all expenses of COVID-19 patients. 2.A higher interest rate will reduce the demand for loanable funds. 3.If the government will increase the subsidy grants to COVID-19 affected areas, then, the cases will be lessen/lowered. 4.Approving the anti-terrorism bill will reduce the terrorism activities in the country. 5.The use of an online learning system to still develop the human resources of our country amidst the COVID-19 pandemic is necessary. Rubrics: Criteria Excellent Very Good Fair Needs 5 4 3 Improvement 2 All economic ideas Most economic Some economic are relevant and ideas are relevant The economic Content ideas are able to provide a and able to provide idea is 5pts relevant and able logical explanation a logical provided and to explain the of the economic explanation of the not supported economic situation/s. economic by facts. situation/s. situation/s. Descriptive Clear, suitable, Somewhat Details have No illustrative justification and appropriate suitable and illustrative examples. and justification and appropriate examples and explanation explanation justification and justification 5pts explanation PSHS Social Science 5: Economics | Page 3 of 5 To summarize, there are two branches of economic reasoning: positive and normative. Positive is based on logic and evidences that can be tested. While normative is based on a value judgment that cannot be tested. Positive deals with what is and normative with what should be or what ought to be. Enrichment: Assume the role of a news reviewer, read the news article entitled “Lapid files bill to protect delivery drivers from unjust order cancellations” and then critique the content using positive and normative statements. See Attachment 1. This is non-graded Suggested Time: 2 mins | Actual Time Spent: ____min(s) Attachment 1: Lapid files bill to protect delivery drivers from unjust order cancellations Read more: https://newsinfo.inquirer.net/1306529/lapid-files-bill-to-protect-delivery-drivers-from-unjust-order- cancellations#ixzz6SBJUozkm By: Cathrine Gonzales - Reporter / @cgonzalesINQ INQUIRER.net / 10:28 AM July 14, 2020 MANILA, Philippines — Senator Lito Lapid has filed a bill seeking imprisonment of up to six months and a fine not exceeding P100,000 for customers who will make unjustified cancellation of orders in food and grocery delivery service platforms for at least three times a month. Lapid filed Senate Bill 1677, which seeks to protect delivery drivers by requiring food and grocery delivery service providers to set up a mandatory reimbursement scheme for unjust cancellation of orders. “If a customer cancels for at least three (3) times in a period of one (1) month, he/she, upon conviction, be subject to the penalty of arresto mayor or imprisonment of one month and one day to six months, the bill stated.” Lapid noted that a growing number of Filipinos opt to avail of delivery services for food and other items amid the coronavirus disease 2019 (COVID-19) pandemic when the public is advised to stay at home. Some delivery service drivers, however, have been victimized by unjustified cancellation of orders and even of “no-show” customers, even if the drivers have already paid for the ordered items in advance. “Masakit isipin na sa kabila ng panganib na hinaharap ng mga delivery rider para lamang makapagserbisyo sa mga customer at kumita ng maliit na halaga, sa huli, sila pa ang naloloko,” Lapid said in a statement on Tuesday. (It is painful to think that despite the danger faced by delivery riders for the sake of serving customers and earning meager income, they are sometimes being duped.) “Bukod sa nasasayang ang oras at salapi ng mga riders dahil sa pagkansela ng order, ang mas malala pa, may mga pagkakataon na ni hindi matunton ang address ng nanlokong customer dahil sa fake address. Hindi tuloy sila mapanagot at naiiwang lugi at abunado ang mga delivery riders,” the senator added. (Aside from the time and money wasted because of canceled orders, some customers also can't be located since they give fake addresses. Thus, they cannot be held liable and the delivery riders will have to shoulder the expense.) PSHS Social Science 5: Economics | Page 4 of 5 Lapid pointed out that the bill will require delivery service providers to establish a reimbursement scheme for the delivery drivers in case orders are cancelled. Reimbursement to the drivers should be made within one day from the cancellation under the bill. To facilitate collection against customers who cancel orders, the bill also requires delivery service providers to implement know-your-customer rules which include the submission and verification of proof of identity and residential address subject to compliance with the Data Privacy Act of 2012. Under the bill, food and grocery delivery service providers that will fail to set up a reimbursement scheme will also be penalized with a fine not exceeding P500,000 and double the amount of money not reimbursed to delivery drivers. References: Fathima, J. S. ( 2014). Positive versus Normative Economics- An Empirical Study. Shanlax International Journal of Economics Vol. 3 number 1. Retrieved from http://www.shanlaxjournals.in/pdf/ECO/V3N1/ECO_V3_N1_009.pdf Mankiw, G. N. (2007). Principles of Microeconomics 4th Edition. USA: Thomson Higher Education. Samuelson, P. A & Nordhaus, W. D. (2010). Economics 9th Edition. New York: McGraw Hill Education. Online websites Lumens Learning (n.d.). Microeconomics:Choice in a World of Scarity. Retrieved from https://courses.lumenlearning.com/wmopen-microeconomics/chapter/positive-and-normative- statements/ Concept Version 8 Created by Boundless (n.d). Normative and Positive Economics. Retrieved from http://oer2go.org/mods/en-boundless/www.boundless.com/economics/textbooks/boundless- economics-textbook/principles-of-economics-1/economic-models-43/normative-and-positive- economics-161-12259/index.html Gonzales, C. (July 14, 2020). Lapid files bill to protect delivery drivers from unjust order cancellations. Philippine Inquirer. Retrieved from https://newsinfo.inquirer.net/1306529/lapid-files-bill-to-protect- delivery-drivers-from-unjust-order-cancellations#ixzz6SBJUozkm Prepared by: Metchelle A. Malinog Reviewed by: Rodigar L. Alimurong Position: SST II Position: SST II Campus: PSHS-CMC Campus: PSHS-CLC PSHS Social Science 5: Economics | Page 5 of 5 SOCIAL SCIENCE 5: ECONOMICS POSITIVE AND NORMATIVE ECONOMICS | MODULE NO. 4 LESSON NO. 4.2 At the end of this module, you will be able to: 1. illustrate the application of positive and normative economic analysis; 2. analyze and critique articles why they utilize such line economic reasoning; and 3. synthesize positive and normative statements. Suggested Time: 1 min | Actual Time Spent: ____min(s) In the previous lesson, you learned about the two branches of economic reasoning. I’m sure you are familiar with the current economic and political situation in the country. In this epoch, Politics and Economics are inseparable; they shape and determine the direction the Philippines is taking. Additionally, politicians have to strengthen their intellectual arguments so that their sponsored bill becomes a law. Suggested Time: 2 mins | Actual Time Spent: ____min(s) As mentioned in the previous lesson, both normative and positive economics are utilized in policy making. First, a policymaker will try to understand the “what is” (positive) and “what should be done” (normative). Then policy makers will come up with a solution to identified problems on various issues such as taxes, minimum wage, BSP reserves, 4 P’s, and many more. Similarly, because of the presence of these two lines of economic reasoning, our legislators in the Congress have to deliberate carefully. They differ in their stand on various issues. According to Fathima (2014), positive economics uses the scientific method to reveal the mechanism of the economy or describe what it is, and to streamline rules. While, normative economics is used to recommend ways to change the world, have fairness and equality. A positive standpoint seldom has room for debate while normative economics allows room for personal judgment, thus, debates are more prone. As stated by Mankiw (2014), there are three reasons for disagreement among economists. First, differences in scientific judgments; economists often disagree because they have different ideas about the validity of alternative theories or about the size of parameters that quantify the magnitude of relationships of various economic variables. For example, the tax increase on cigarettes and beverages will lessen the consumption of these commodities; some will dwell on the purpose to regulate harmful consumption, but others will focus on the added funds in the national treasury. PSHS Social Science 5: Economics | Page 1 of 4 Second, differences in values; economists have a different interpretation of values. For example, your organization has agreed to donate PPE to the front liners. Those coming from affluent families are required to contribute 10% of their income, while those in the middle class will contribute 5%. Is this fair? Your answer depends on what values you uphold and understand. Third, perception versus reality. R.A. 11203 or the Rice Tariffication Law of the Philippines aims to make rice more affordable and guarantees food security in the country. However, when it was implemented, many local farmers lost a huge amount of their profit, amounting to almost 68 billion pesos. This one has an array of perception among different members of the society (Simeon, 2020). Similarly, when it comes to policymaking, we must remember that one of the goals of the national government is stable prices. In inflation, positive analysis consists of the calculation of the rate at which prices are rising, while in normative analysis, it might suggest that the inflation rate is too high and the government should attempt to correct it (Fathima,2014). Economists are obliged to use both line of reasoning when scrutinizing social issues and giving advices to policymakers. Therefore, politicians should consult and accept ideas from economists; rather than manipulating data and results that will cater to their personal interests. Suggested Time: 10 mins | Actual Time Spent: ____min(s) Let us gauge your understanding of the lesson presented. Answer the following activity. This assessment is graded. Activity: Synthesis statement (30 pts.) Instructions: Provide a positive and normative analysis of the following. Your answers will be graded using the rubrics below. Description Positive Normative 1. Household chores 2. Food Production 3. World Health Organization Criteria Excellent Very Good Fair Needs 5 4 3 Improvement 2 All economic ideas Most economic are relevant and Content ideas are relevant Some economic able to provide a 5pts and able to ideas are relevant The economic idea is logical provide a logical and able to explain provided and not explanation of the explanation of the the economic supported by facts. economic economic situation/s. situation/s. situation/s. PSHS Social Science 5: Economics | Page 2 of 4 Descriptive Clear, suitable, Somewhat Details have No illustrative justification and appropriate suitable and illustrative examples. and justification and appropriate examples and explanation explanation justification and justification 5pts explanation Suggested Time: 15 mins | Actual Time Spent: ____min(s) In summary, there are three reasons of disagreement among economists, Differences in scientific judgments, differences in scientific judgments, and perception versus reality. The old maxim holds true when it comes to economic analysis: “If all economists were laid end to end, they would not reach a conclusion”. In policy-making, economists are obliged to use a normative and positive line of reasoning; and politicians should not exploit policies just to serve them. Enrichment: Read and assess the news article below. Create your own counter-arguments using positive and normative statements. This is non-graded. Suggested Time: 2 mins | Actual Time Spent: ____min(s) Attachment: Solgen replies to petitions vs anti-terrorism law By: Jerome Aning - Reporter / @JeromeAningINQ Philippine Daily Inquirer / 05:12 AM July 19, 2020 Read more: https://newsinfo.inquirer.net/1308824/solgen-replies-to-petitions-vs-terror-law#ixzz6Sl7MawnI MANILA, Philippines — The government should not be perceived as the enemy but a guardian of the Filipino people and their constitutional rights, Solicitor General Jose Calida said on Saturday after the Malaybalay City police tagged eight people protesting the closure of television network ABS-CBN as “terrorists.” Calida issued the statement as Republic Act No. 11479, or Anti-Terrorism Act of 2020, came into effect on Saturday. The Office of the Solicitor General (OSG) has submitted to the Supreme Court a 233-page consolidated comment on several petitions challenging the constitutionality of RA 11479. ‘Utter lack of merit’ At least eight parties have asked the high court to junk the law for gravely flawed provisions violative of civil rights and judicial process. The petitioners include Rep. Edcel Lagman; the Makabayan bloc in the House; 1986 Constitutional Commission members Christian Monsod and Felicitas Aquino-Arroyo; several labor groups; De La Salle Brothers Inc., represented by former Education Secretary Armin Luistro; and lawyers Howard Calleja, Melencio Sta. Maria and Robert Philip Jurado. In its comment on the petitions, the OSG urged the Supreme Court to dismiss the pleas for “utter lack of merit.” Among other arguments, the OSG said the petitioners had no legal standing, that there was no actual justiciable case arising from the law and that the wisdom and necessity behind the enactment PSHS Social Science 5: Economics | Page 3 of 4 of the law were political questions beyond the ambit of judicial scrutiny. The OSG argued against the arguments in the petitions, especially Section 29 which authorizes the Anti-Terrorism Council to order the detention for up to 14 days, subject to 10-day extension, of an individual suspected of committing terrorism. 14-day detention The OSG said the 14-day detention was neither arbitrary nor unjustified and quoted Sen. Panfilo Lacson, one of the proponents of the law, that other countries have similar or longer detentions periods such as 14 days in Sri Lanka and Australia; Bangladesh, 15 days; Indonesia, 21; Pakistan, 30; Malaysia, 59; and Singapore, 730. Lacson himself said in a separate statement that he would not allow the law to be perverted or abused. “As the one who painstakingly sponsored the measure in the Senate, I will not allow anyone to pervert the legislative intent of the law, thus my commitment to go the extra mile in guarding against possible abuse in its implementation,” he said. But the Malaybalay City police had not yet heard the lofty rhetoric of Lacson or the government lawyers when they posted on Facebook on Thursday an infographic tagging supporters of ABS-CBN and press freedom advocates as terrorists. The infographic showed eight individuals holding placards with the words “Defend Press Freedom.” The infographic stated: “Malalaman mong sila ay para sa Terorismo; Papatulan lahat ng isyu; Basta laban sa Gobyerno. No to rebellion. No to terrorism.” (You will know they are for terrorism; they will ride on all issues; especially if it is against the government.) Police Col. Jerry Tambis, Malaybalay police chief, admitted that “we made a mistake and we are sorry for it” and later had the infographic removed. References: Fathima, J. S. ( 2014). Positive versus Normative Economics- An Empirical Study. Shanlax International Journal of Economics Vol. 3 number 1. Retrieved from http://www.shanlaxjournals.in/pdf/ECO/V3N1/ECO_V3_N1_009.pdf Mankiw, G. N. (2007). Principles of Microeconomics 4th Edition. USA: Thomson Higher Education. Samuelson, P. A & Nordhaus, W. D. (2010). Economics 9th Edition. New York: McGraw Hill Education. Online websites Lumens Learning (n.d.). Microeconomics:Choice in a World of Scarity. Retrieved from https://courses.lumenlearning.com/wmopen-microeconomics/chapter/positive-and-normative- statements/ Concept Version 8 Created by Boundless (n.d). Normative and Positive Economics. Retrieved from http://oer2go.org/mods/en-boundless/www.boundless.com/economics/textbooks/boundless- economics-textbook/principles-of-economics-1/economic-models-43/normative-and-positive- economics-161-12259/index.html Simeon, L. M. (February 22, 2020). Farmers lose P68 billion from rice tariffication law. Phil Star Global. Retrieved from https://www.philstar.com/business/2020/02/22/1995025/farmers-lose-p68- billion-rice-tariffication-law Prepared by: Metchelle A. Malinog Reviewed by: Rodigar L. Alimurong Position: SST II Position: SST II Campus: PSHS-CMC Campus: PSHS-CLC PSHS Social Science 5: Economics | Page 4 of 4 SOCIAL SCIENCE 5: ECONOMICS KEY CONCEPTS IN ECONOMICS | MODULE 5 LESSON 5.1 TARGET At the end of this module, you will be able to: 1. define scarcity and efficiency; 2. discuss scarcity in relation to human needs and wants; and 3. exemplify the concepts of scarcity and efficiency in relation to one’s everyday activities. Suggested Time: 1 min | Actual Time Spent: ____min(s) From the previous topics, Economics is defined as a social science that deals with the efficient allocation of scarce resources to satisfy unlimited human wants and needs. This definition gives us two ideas: (1) there is scarcity of resources and (2) these resources should be allocated efficiently. Thus, the notion of scarcity and efficiency have been central in the study of economics. Suggested Time: 2 mins | Actual Time Spent: ____min(s) Sowell (1930), a US economist, stated that “The first lesson of economics is scarcity: there is never enough of anything to satisfy all those who want it.” (as cited in Abbot et al., 2012, p.13). Scarcity has been part of our lives since the resources we have are finite or limited. What do you think will happen if the resources are not scarce? People will probably not worry since it will make no sense to put effort in figuring out how to make the most out of the resources if they are unlimited. Scarcity, as an economic problem, does not exist just because the resources are limited physically. The problem arises mainly because of our nature as humans. As much as we should prioritize our “needs” first over our “wants”, we never get contented of the things that we have making our wants unlimited. Satisfying our unlimited wants, given the scarcity of resources, leads to the problem of allocation. Allocation of resources to different areas or groups of people is one of the major concerns of economics. How do you think people use their resources? How does the government allocate the country’s budget? A critical criterion in doing such is efficiency. Efficiency is concerned in the best possible way of employing resources (i.e. least cost and time wasted but of highest quality). Social Science 5: Economics | Page 1 of 4 Moreover, Samuelson and Nordhaus (2010) stated that “Economic efficiency requires that an economy produce the highest combination of quantity and quality of goods and services given its technology and scarce resources. An economy is producing efficiently when no individual’s economic welfare can be improved unless someone else is made worse off.” (p.4). With this, economic efficiency will only be achieved if the allocation of resources is at the point where no individual can be better off without making anyone else worse off. This is also known as Pareto-efficiency, after the name of an Italian economist, Vilfredo Pareto. Take the situation of Ava and Amy as an example. They own a garden and Ava wants to plant it with flowers while Amy wants to plant it with vegetables. If only one type must be chosen (either flowers alone or vegetables alone) what do you think will they feel? One of them would obviously be worse off. On the other hand, if they agreed to a specific combination, say combination X, of the number of flowers and vegetables to be planted and altering it would make the other person worse off, then combination X is already Pareto-efficient. With the discussion above, the concept of economic efficiency will help not just the policymakers and government in utilizing the resources but also us, individuals, in managing even the simplest or smallest scarce resource we have. From our day-to-day decision making in sorting our needs and wants up to the societal decisions made in the country, one thing should always be kept in mind – our resources are limited and should be used wisely. Efficient allocation of resources while dealing with scarcity is what makes economics important especially in addressing the needs and wants of the people and the society. Suggested Time: 10 mins | Actual Time Spent: ____min(s) Non-Graded Alternative Assessment (10 points): Thinking exercise! After learning the concept of scarcity and efficiency, it is time for its application. Kindly answer the following questions and refer to the table below for the rubric. 1. How does scarcity bring about the problem of allocation? Give a concrete example and explain using 3-5 sentences. 2. What parts of your life highlighted the importance of efficient allocation of resources? Give at least two examples and explain each briefly. 5 POINTS 3 POINTS 2 POINTS Content The concepts discussed are The concepts are discussed The concepts discussed (50%) applied and reflected in the and applied in the answer but are limited and do not answer with strong points. lack strong points. have strong points. Clarity Content was discussed clearly Content are somehow clear Content was confusing (30%) and coherently. The main idea and coherent. The main idea and not coherent. The can be fully grasped. is present but cannot be fully main idea is not clear or grasped. not present at all. Examples Extensive details and examples Some details and examples Provided unclear (20%) are provided which fully are provided thus the examples or didn’t supported the arguments. arguments are not fully provide examples at all supported Suggested Time: 5 mins | Actual Time Spent: ____min(s) Social Science 5: Economics | Page 2 of 4 The resources are limited and finite yet there are unlimited human needs and wants. Economics aims to address this problem by allocating the resources efficiently. The allocation is said to be efficient if the resources are employed in the best possible manner (i.e. least cost and time wasted but of highest quality) and if we attained the situation where we cannot better off an individual without worsening somebody else. This is also known as Pareto-efficiency. Efficiency is a critical criterion in managing society’s resources. It also guides the individuals, government, and policymakers in decision making. People should always be reminded that resources are limited and that it is essential to efficiently allocate them. Graded Formative Assessment (15 points): For further application of the concepts you have learned from this module and enhancement of your critical thinking, answer the following questions. Kindly use the same rubric from the “Navigate” part. 1. Budget Allocation A. As a student, you are subjected to a limited allowance and efficient allocation is important. How are you going to budget your “hypothetical weekly allowance” of Php 1500? Kindly show it by filling out the blank spaces below. (5 points) B. As you budget your weekly allowance, what are your considerations? Why do you think is it important to sort out your needs and wants and identify which ones should be prioritized? (5 points) 2. Do you think economic or pareto-efficiency always suggest equality or fairness? (5 points) Suggested Time: 12 mins | Actual Time Spent: ____min(s) Social Science 5: Economics | Page 3 of 4 References: Abbot, G., Farndon, J., Kennedy, F., Meadway, J., Wallace, C. & Weeks, M. (2012). The Economics Book. New York: DK Publishing. Government of UK. History Past Prime Ministers. Retrieved from https://www.gov.uk/government/history/past-prime-ministers/benjamin-disraeli-the- earl-of-beaconsfield Samuelson, P. A. & Nordhaus, W. D. (2010). Economics (19th ed.). New York: McGraw-Hill Education. Prepared by: Nneka B. Evangelista Position: Special Science Teacher 1 Campus: PSHS-CALABARZON Reviewed by: EDGAR F. ALMERO, Ed.D. Position: SST V Campus: PSHSWV Social Science 5: Economics | Page 4 of 4 SOCIAL SCIENCE 5: ECONOMICS KEY CONCEPTS IN ECONOMICS | MODULE 5 LESSON 5.2 At the end of this module, you will be able to: 1. define opportunity cost; 2. understand the basic concepts of goods and services; and 3. justify the relevance of opportunity cost in decision making. Suggested Time: 1 min | Actual Time Spent: ____min(s) It has been established in the previous lesson that economics deals with the problem of scarcity of resources and the necessity of allocating them efficiently. Scarcity also leads us to make decisions and choose among the alternatives presented to us. In times of decision making, what are your main considerations? How do you feel after choosing one option over the other? Let these questions guide you as we discuss the new concepts in economics. Suggested Time: 2 mins | Actual Time Spent: ____min(s) A British economist named Lionel Robbins, in 1935, argued that “a tragedy of human life is that the consequence of choosing to do one thing is that something else has to be given up.” (Abbot et al., 2012, p. 133). Due to scarcity of resources, we are often forced to choose among options. It is easy to decide if one of the options is undesirable. However, in most times, we are presented with several good options which makes us choose which of them is the best option, the one that we are going to prioritize and which of them is only the next best option, the one that we are willing to forgo. In economics, the value of the forgone option is referred to as opportunity cost (Bello et al., 2009). To further understand, take this scenario as an example. Say that you are given a chance to watch your favorite band at a live concert with meet and greet for free, but you are also offered a free ticket in a movie screening and you’ll be meeting and be seated next to your favorite artists. Which of these two will you choose? Obviously, it is impossible for you to be in two places at the same time. Say you have chosen the movie screening over the concert; this means that the opportunity cost of going to the movie screening is equal to the fun and enjoyment you’ve given up if you chose the concert. PSHS Social Science 5: Economics | Page 1 of 4 The concept of opportunity cost also became an essential guide in the allocation of goods and services in an economy. To define, goods are the tangible commodities produced and consumed by an individual or group of people. Cars, agricultural products, and smartphones are some of the examples of goods. Meanwhile, services are intangible and often are actions that involve innate or acquired skills offered and availed by an individual or groups of people. An example of this would be haircut in salons, counseling, government services, and forms of entertainments such as musical and dance shows. Whether as a student, an employee, or just simply a member of a community, it is essential to evaluate the choices presented to us since every choice we make is at the expense of the other choice. For instance, the producers should weigh the opportunity cost of producing one good over the other. Another example would be government officials who must decide which public service or project should be selected first, among others. It is important to remember that resources used to produce the chosen goods or services will no longer be available to produce another set of goods or services. Last and most importantly, the notion of opportunity cost should always be involved in our daily decisions as individuals for us to choose the best alternative where our time, energy, and effort will be allocated. Although, individual decisions might seem small, every small thing that adds up can make a huge impact to the society and the economy. We should always weigh the opportunity cost of every decision or choice not just because of the scarce nature of resources but also because its potential contribution in the improvement and development of the country. Suggested Time: 7 mins | Actual Time Spent: ____min(s) Graded Alternative Assessment (20 points) Answer the following questions. Kindly use the rubric for grading found on the table below. 1. Do you think opportunity cost is always equal to the monetary cost of a good/service you forgo when you chose one over the other? Answer must be at least 3 sentences. (5 points) 2. Explain the statement “Choosing is refusing.” using the concepts discussed in this module. Kindly include concrete examples. Answer must be at least 3 sentences. (5 points) 3. If you were given a chance to allocate the country’s budget, which among the departments are you going to prioritize? For simple illustration, choose only 5 departments and rank them from 1 to 5, 1 being the highest. Explain how you came up to this ranking in 5-10 sentences. Below is the list of some of the departments in the country. (5 points for compliance in ranking; 5 points for explanation) PSHS Social Science 5: Economics | Page 2 of 4 RUBRIC 5 POINTS 3 POINTS 2 POINTS Content The concepts discussed are applied The concepts discussed and The concepts discussed are (50%) and reflected in the answer with applied and reflected in the limited and do not have strong points. answer but lack strong points. strong points. Clarity Content was discussed clearly and Content are somehow clear and Content was confusing and (30%) coherently. The main idea can be coherent. The main idea is not coherent. The main idea fully grasped. present but cannot be fully is not clear or not present at grasped. all. Examples Extensive details and examples are Only some details and examples Provided unclear examples (20%) provided which fully supported the are provided thus the arguments or didn’t provide examples at arguments. are not fully supported. all Suggested Time: 15 mins | Actual Time Spent: ____min(s) Economics is concerned in dealing with scarce resources and how to employ them efficiently. With this, we face several alternatives and forced to choose which of them should we prioritize. In economics, the loss of possible gain when we choose one alternative over the other is called the opportunity cost. Moreover, the concept of opportunity cost is essential in the allocation of goods and services. Goods are the tangible commodities consumed and produced by an individual or groups of people while services are the intangible ones often in form of action and use innate or acquired skills. The people behind the provision and consumption of these goods and services should weigh out the options and determine which should be prioritized and sacrificed. Therefore, the analysis of opportunity costs of different alternatives plays a huge role in personal and societal decision making. Formative Assessment: Thinking exercise! For further application, answer the question below in 5-10 sentences in a piece of paper. Use the same rubric in “Navigate” part. (5 points) According to Krockow, a psychologist, in 2018, adults make approximately 35, 000 decisions a day. From choosing what you wear, eat, music to listen to up to your decision to study and read this module, countless decisions were involved! With that, why do you think opportunity cost is an important consideration in decision-making? Suggested Time: 5 mins | Actual Time Spent: ____min(s) PSHS Social Science 5: Economics | Page 3 of 4 References: Abbot, G., Farndon, J., Kennedy, F., Meadway, J., Wallace, C. & Weeks, M. (2012). The economics book. New York: DK Publishing. Bello, A., Bello, R., Camacho, J., Catelo, M., Cuevas, A. & Rodriguez, U. (2009). Economics. The economic problem: resource allocation (p.13). Quezon City, Philippines: C&E Publishing, Inc Department of Budget and Management. 2020 Budget at a Glance. Retrieved from https://www.dbm.gov.ph/index.php/budget-documents/2020/2020-people-s- budget/2020-budget-at-a-glance-signed Krockow, E.M. (2018). How many decisions do we make each day?. Retrieved from https://www.p

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