Candidates can apply theoretical concepts to practical examples in UPSC exams by employing the case study method and real-life applications. For instance, when discussing economic theories, candidates can reference recent economic policies or their effects on society. Utilizing current affairs and historical incidents makes theoretical discussions relevant and relatable to practical scenarios. This method not only demonstrates the candidate's understanding of concepts but also shows their ability to apply this knowledge to real-world contexts, which is particularly valued in UPSC examinations when evaluating responses.