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Applied-Economics q2 Las
Applied-Economics q2 Las
Applied-Economics q2 Las
APPLIED ECONOMICS
Second Quarter
i
COPYRIGHT PAGE
Copyright @ 2020
DEPARTMENT OF EDUCATION
Regional Office No. 02 (Cagayan Valley)
Regional Government Center, Carig Sur, Tuguegarao City, 3500
“No copy of this materials 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.”
This material has been developed for the implementation of the K to 12 Curriculum through
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educational purposes and the source must be acknowledged. Derivatives of the work
including creating an edited version, an enhancement of supplementary work are permitted
provided all original works are acknowledged and the copyright is attributed. No work may
be derived from the material for commercial purposes and profit.
Consultants:
Regional Director ESTELA L. CARIŇO, EdD, CESO IV
Assistant Regional Director RHODA T. RAZON, EdD, CESO V
Schools Division Superintendent MADELYN L. MACALLING, PhD, CESO VI
Assist. Schools Division Supt. EDNA P. ABUAN, PhD
DANTE J. MARCELO, PhD, CESO VI
Chief Educ. Supervisor, CLMD OCTAVIO V. CABASAG, PhD
Chief Education Supervisor, CID RODRIGO V. PASCUA, EdD
Development Team
Writers : Rachelle May M. Ambatali, Kaycee Corales, Jeffrey L.
Galanza, Donachelle J. Layugan,
Content Editors : Inocencio T. Balag, , EPS Math, SDO Isabela
Cyril M. Pacunana, Fay P. Managuelod
Richard C. Esguerra, Merilyn Manango, Novalyn Cuaresma
Focal Persons : Inocencio T. Balag, EPS Math, SDO Isabela
ii
TABLE OF CONTENTS
iii
APPLIED ECONOMICS
Definition of Terms:
Business- an undertaking by a person or a group of persons.
Industry- is the aggregation of the different businesses engaged in the same line of
undertaking.
Business Organizations:
From a legal point of view, there are four ways to form a business:
1. Sole Proprietorship- this is generally the simplest way to set up a business. It is by a
single individual who is singly responsible for running the business and is accountable
for all debts and obligations related to the business.
2. Partnership- is an agreement in which two or more persons combine their resources in
a business to make a profit. A partnership agreement is drawn up and profits are
divided among the partners according to the terms of the agreement. There are two
types of partnership:
a. General Partnership-partners divides responsibility for management and liability.
b. Limited Partnership- other partners are limited and contribute only capital, take no
part in control or management and are liable for debts to a specific extent only.
3. Corporation- is a legal entity that is separate from its owners, the shareholders. No
shareholder is personally liable for the debts, obligations, or acts of the corporation.
Directors and officers can bear liability for their involvement with the corporation.
4. Cooperative- is an entity organized by people with similar needs and is operated for
their mutual benefit.
Source: https://managementhelp.org/blogs/strategic-planning/2015/12/22/50-tips-and-tools-for-
effective-strategic-thinking/porter-five-forces-model-of-strategy
Source: https://i0.wp.com/www.business-to-you.com/wp-content/uploads/2016/10/Porters-Five-
Forces-Table.jpg
Environmental Analysis
Environmental Analysis is described as the process which examines all the
components, internal or external that influences the performance of the business
organization.
An environmental analysis includes a thorough study of:
1. Economic forces-this involves a look at economic factors such as income of the
people, specifically the target market, economic conditions such as inflation,
recession, prosperity, demand, and supply in the market.
2. Physical environment-this includes a look at the population size, the geography of
the place where the business will be located, land distribution, climate and in
today’s global warming situation, whether or not the area is prone to flood or
earthquake.
3. Political factors- the type of government, the stability and strength of the
government, and good leadership are factors that can be an advantage to a business.
4. Cultures and Lifestyles- it is important to study cultural practices such as fiestas,
celebration of Christmas season, trends in consumption patterns, as means to
identify the goods and services that will fit into these celebrations and spending
behaviour.
5. Competition- the degree of competition in the market and the extent and strength of
competition are all vital in determining the success or failure of a business.
Activity 1: Wikarambulan
Instructions: Wikarambulan is a sound like a game. By saying/pronouncing and connecting
the word, reveal the elements and factors of principles, tools and techniques in creating a
business. Write your answer on the blank space provided in the right side of the paper.
1. IS TRE ENGCKS _________________________
2. OP FORTUNE NI TEAS _________________________
3. WEEK NEST CES _________________________
4. THREE EATS _________________________
Note: Please Practice Personal Hygiene at all times 4
5. IN DUST TREE _________________________
6. END BY RON MEANT ALL _________________________
7. PIE HAVE FOUR ZEST _________________________
8. ECHO NO MEEK _________________________
9. SOAP FLYER _________________________
10. COST TOO MHER _________________________
_____3. In a SWOT analysis, which two elements are part of the internal environment?
a. strengths and threats
b. strength and opportunities
c. weaknesses and strengths
d. weaknesses and threats
_____4. Most other soft drinks are close competitors of Coca-Cola, but Pepsi would be
classified as _______ competitor.
a. direct c. substitute
b. indirect d. alternative
_____7. A business is classified according to its size based on the worth of the business
assets. Which among the choices below if the business total assets are worth below
Php 1,500,001.
a. micro c. medium
b. small d. large
_____8. How will you classify the business if its total assets are worth Php 60,000,001 and
above?
a. micro c. medium
b. small d. large
_____10. Point out what force acts as a deterrent against new competitors. This force decides
how easy (or not) it is to enter an industry.
a. bargaining power of buyers c. bargaining power of suppliers
b. barriers to entry d. industry rivalry
2. Use the SWOT Analysis template below and give at least four (4) internal and/or external
factors that are included in each area. Then discuss below how each factor affects the
business organization.
Strengths Weaknesses
Ex. Experienced leader/s Ex. Lack of training of workers
Opportunities Threats
Ex. Improved company reputation Ex. Entry of competitors
References:
Book:
Dinio, Rosemarie P. and Villasis, George A.,Apllied Economics, 2017 edition, Rex Book
Store,Manila,Philippines.
Websites:
https://corporatefinanceinstitute.com/resources/knowledge/strategy/industry-analysis-
methods//11/26/2020
http://www.netmba.com/strategy/swot//11/26/2020
https://www.civilserviceindia.com/subject/Management/notes/industry-
analysis.html/11/26/2020
https://www.investopedia.com/terms/b/business.asp/11/26/2020
https://www.business-to-you.com/porters-five-forces/11/26/2020
https://businessjargons.com/environmental-analysis.html/11/26/2020
Answer Key
Activity 1: Wikarambulan
1. Strengths 6. Environmental
Activity 4
1.
Prepared by:
KAY CEE D. CORRALES
Name of Writer
Industry Analysis
Industry analysis is a market assessment tool used by businesses and analysts to
understand the competitive dynamics of an industry. It helps them get a sense of what is
happening in an industry.
Industry analysis, for an entrepreneur or a company, is a method that helps to understand
a company’s position relative to other participants in the industry. It helps them to identify
both the opportunities and threats coming their way and gives them a strong idea of the
present and future scenario of the industry. The key to surviving in this ever-changing
business environment is to understand the differences between yourself and your competitors
in the industry and use it to your full advantage.
Source: https://www.business-to-you.com/porters-five-forces/
Environment Analysis
The other analysis that has to be done is an analysis of the environment in which the
business will operate. This means an evaluation of the possible or probable effects of the
external forces and conditions on the survival and growth of the business.
A. PESTEL Analysis
A PESTEL analysis or PESTLE analysis (formerly known as PEST analysis) is a
framework or tool used to analyze and monitor the macro-environmental factors that may
have a profound impact on an organization’s performance. This tool is especially useful when
Source: https://www.business-to-you.com/scanning-the-environment-pestel-analysis/
Apply business principles, tools, and techniques in participating in various types of industries
in the locality. ABM_AE12-IIa-d-10
Strengths Weaknesses
Opportunities Threats
P E S T L E
Political Economic Social Technological Legal Environmental
Output No.2
Output No.3
Reflections
2. Using the acronym PESTLE and SWOT, write what you have learned from this activity.
P - ____________________________________________________________________
E - ____________________________________________________________________
S - ____________________________________________________________________
T - ____________________________________________________________________
L - ____________________________________________________________________
E - ____________________________________________________________________
S - ____________________________________________________________________
W - ___________________________________________________________________
O - ____________________________________________________________________
T - ____________________________________________________________________
3. What have you learned from the said activity and how can you apply it in your day to day
basis?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Dinio, Rosemary P. and Villasis, George A. 2017, Applied Economics, First Edition, Rex
Book Store Inc.
Edilynda G. Enriquez 2016, Organization and Management, First Edition, JFS Publishing
Services, Manila Philippines
Answer Key
Prepared by:
JEFFREY L. GALANZA
Name of writer
Activity 1
Directions/Instructions: Look at the pictures below. What can you say about them?
Describe the similarities and differences and answer the guide questions below.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Guide Questions:
a. What is the socio-economic factor/s affecting the business shown in the pictures?
b. Why do you think this is/are important in the business?
Rubrics for scoring:
Criteria Rating
Content and ideas are organized in clear, 1 2 3 4 5
logical manner
The writing directly addresses the topic and
Note: Please Practice Personal Hygiene at all times 18
provides adequate discussion supporting the 1 2 3 4 5
main idea
The writing employs standard grammar
conventions, proper punctuations and word 1 2 3 4 5
of choice
The sentences are well constructed with
varied structure 1 2 3 4 5
Total ( 20 points)
Activity 2
Directions/Instructions: Solve the following problems. Answer the guide questions below.
Note:
1. The total utility received from consuming 10, 11, and 12 tacos are 100,108,115,
respectively. What is the average utility of consuming 11 tacos? What about 12 tacos? What
are the marginal utilities of the 11th and 12th tacos?
2. The total utility of consuming 10 bottles of water is 200. The marginal utility of consuming
the 11th and 12th bottles of water is 5 and 4 respectively. What are the total utilities of
consuming 11 and 12 bottles of water?
Guide Question:
a. Which is more important, total utility or marginal utility in the decision-making process
and why?
b. Which is better measurement of overall well-being from the consumption of a good or
services? Why?
Answer
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Rubric
Score 5 2 0
Data in the problem Data in the problem No answer
Given are correct and are incorrect and
complete incomplete
Activity 3
Directions/Instructions: : Identify the business and industry located in your own community
and determine the possible socioeconomic factor/s affect the business identified.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Rubric
SCORE DESCRIPTION
The student has demonstrated a full and
complete understanding about the effect of
20 the different factors affecting business by
explaining the topic correctly. The response
may, however, contain minor flaws that do
not detract from a demonstration of full
understanding.
The student has demonstrated merely an
acquaintance with the topic or provided a
10 completely incorrect or uninterpretable
response. There are significant omissions
and irregularities that indicate a lack of
comprehension in regard with its content.
0 No answer at all
Reflections:
In this activity I have learned that _______________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
References:
Book:
Applied Economics, R. Dinio et al, Rex
Note: Please Practice Personal Hygiene at all times 20
Website:
Https://study.com/academy/lesson
Https://inomics.com/terms/total-utility-1467409
Answer Key
Activity 1: Answer may vary
Activity 2:
1. a. Given:
Quantity consumed - 10, 11, 12 tacos
Total utility – 100, 108 and 115
b. Formula: Average utilities = Total Utility/Number of units
c. Solution:
108/11 = 9.81 - 11th tacos
115/12 = 9.58 - 12th tacos
- 108 – 100 = 8 11 - 10 = 1
- 115 – 108 = 7 12 – 11 = 1
2. a. Given
b. Formula:
Average utilities = Total Utility/Number of units consumed
Marginal utilities = Change in total utility/Change in number of units consumed
c.Solution
Total Utility = Total utility on the 10th bottle + Marginal utility on the 11th bottle
DONACHELLE J. LAYUGAN
Name of Writer
From the activity below you will be able to understand the viability of a business and how it
impacts the community as well as the entrepreneur itself.
Directions: Search the word on the puzzle below, and complete the following sentence below.
WORD HUNT
B O B S H K M O K E M L B M K O
U P S F T L U R L L A T U I P P
S U T C H K T S M B R L Q P A S
I U U B N O L F F A K K O R D B
N A K T A Z C D F T E R S O S E
E N S E R T B A C I T L E D V N
S H B G E N V E A U H S K U U T
S B N L S K S R N S U A M C D R
A D J M I F T I H K G F E T H E
O K J K R U T Y A R H C D C L P
S H K P P Y K Q U Y I R L B J R
T R A P R O C E S S L M O A N E
B H R O E N K H U O L A C L M N
Y H U J T T P R O F I T A B L E
C H A G N E F U G T I U I D E U
C O R N E R S T O N E S C B M R
Activity 4
1. Connecting your answer on Activity 3, draw your propose business at the
center and indicate its impact on the community, government, and economy.
You may use left side on its good impact and right side as bad impact
1. Community
2. Government
3. Economy
Rubric
CRITERIA SCORE
(4) (3) (2) (1)
Neatness Answers is Answer is neat Answer Answer
neat and and clear but presented is appears to
clear and can some has errors not to clear difficult to
easily and neat understand
understand
Content Content is Content is clear
Content is a Content is not
detailed and little difficult connected on
clear to understand the subject
but includes matter
some critical
components
Grammar Correct use Few Few spelling So many
spelling and of words and grammatical errors and spelling and
explanation explained errors but grammatical grammatical
well explained well errors errors
Not Not explained
explained well
well
Reflections:
Directions: Accomplish this part honestly.
____________
Note: Please Practice Personal Hygiene at all times 29
________________________________________________________________________
________________________________________________________________________
I enjoyed most on
________________________
__________________________________________________________________
________________________________________________________________________
______________________________
________________________________________________________________________
_____________________________________________________________
References:
Book:
B O B S H K M O K E M L B M K O
U P S F T L U R L L A T U I P P
S U T C H K T S M B R L Q P A S
I U U B N O L F F A K K O R D B
N A K T A Z C D F T E R S O S E
E N S E R T B A C I T L E D V N
S H B G E N V E A U H S K U U T
S B N L S K S R N S U A M C D R
A D J M I F T I H K G F E T H E
O K J K R U T Y A R H C D C L P
S H K P P Y K Q U Y I R L B J R
T R A P R O C E S S L M O A N E
B H R O E N K H U O L A C L M N
Y H U J T T P R O F I T A B L E
Opportunity and selection are like cornerstones of business. In a sense, identification and
selection of a suitable business opportunity serves as the trite saying “well begun is half
done”. But it is better said done. Because if we ask any intending entrepreneur that product or
project she will select and start as an enterprise, the obvious answer he/she would give is one
that has a good market and is profitable. But the question is how could one know if we do
have a product to sell? Whose profitability will we determine without selling the product?
There are also other problems we must consider. While trying to identify a suitable product or
project, the intended entrepreneur passes through a certain process.