12

APPLIED
ECONOMICS
LEARNER'S ACTIVITY SHEET
Quarter 4 – Week 4-5:
Socio-economic Factors
Affecting Business and
Industry
APPLIED ECONOMICS – Grade 12
Learner's Activity Sheet
Quarter 4 – Week 4-5: Socio-economic Factors Affecting Business and Industry
First Edition, 2021

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 LEARNER’S ACTIVITY SHEET FOR QUARTER 4, WEEK 4 & 5
APPLIED ECONOMICS - GRADE 12

Name: _______________________________ Grade & Section: _______________________

School: ______________________________ Teacher: _______________________________

Competencies:
Explain the effects of various socio-economic factors affecting business and industry.

Topic: Socio-economic Factors Affecting Business and Industry

General Reminders: Use this activity sheet with care. Read the directions carefully before
doing each task. Return this activity sheet to your teacher/facilitator once you are through
with it.

Explore

Directions: Arrange the scrambled letters to form a word. Accomplish this in your notebook.

1. U U T T S R R R N I F E C A

2. C C E I M N O O S

3. S R P O M H G E D C A I
 Learn

Socio-economics: Definition

Socio-economics (also known as social economics) is the social science that studies how
economic activity affects and is shaped by social processes. In general it analyzes how modern
societies progress, stagnate, or regress because of their local or regional economy, or the global
economy. Societies are divided into three groups: social, cultural and economic. It also refers
to the ways that social and economic factors influence the environment.

“Socio-economics” is sometimes used as an umbrella term for various areas of inquiry.

The term “social economics” may refer broadly to the "use of economics in the study of society".
More narrowly, contemporary practice considers behavioural interactions of individuals and
groups through social capital and social "markets" (not excluding, for example, sorting by
marriage) and the formation of social norms. In the relation of economics to social values.

The first step to understanding what socioeconomic factors is to understand social

economics. This is a specialized branch of economics that concerns itself with studying the
intimate relationship between economics and social behavior. Such things as ethics, social
norms and different social philosophies have an impact on how consumers behave in an
economy and the eventual shape that economy will take. The study of social economics seeks
to predict what kind of results to expect when the society has been changed. It does this by
studying politics, history and other social sciences.

Socioeconomic factors are, therefore, the social and economic factors that shape and
determine the dynamics a society will experience. These are factors that affect the behavior of
a particular group, also known as a socioeconomic class. Perhaps the most interesting
behavior of members of a socioeconomic class is their behavior as consumers. Different
socioeconomic classes will generally have different priorities, and this will affect how they
spend their money.

Socioeconomic Factors

The socioeconomic factors that determine health include: employment, education, and
income. Socioeconomic refers to society related economic factors. These factors relate to and
influence one another. For example, your employment will dictate your income. Your income
level often correlates to your level of education and your level of education helps to dictate
your employment. This then allows them to pay for and usually leads to expectations upon
that person’s children to achieve a similar level of education, employment and income. These
socioeconomic factors then influence health.

Employment
The first socioeconomic factor is employment. Your employment is your job. What you
do for a living. Your employment status and your particular occupation has a large impact on
your health. For example, people with physically active jobs, such as a labourer or a personal
trainer are more likely to complete the recommended 30 min a day, 5 days a week for vigorous
physical activity. However, a high level executive who works long hours and sits at a desk all
day is less likely to do physical activity, is more likely to be stressed and have a poor social
life. Some more positive examples could include: farmers having a more active lifestyle, greater
community involvement, and fresh air. Sports coaches being more active, community workers
having good support networks, and a priest or pastor will have greater community involvement
and a solid purpose to life.

Education
Education is another socioeconomic factor that determines your health. Not only will
education influence your choice of employment, but your education will directly impact your
health. Education does not just refer to your level of education. That is, it does not just refer
to whether you complete your highschool, go to University etc. Your education and health can
be specific.

Generally speaking people who have lower levels of education, will also have lower levels
of health education, but this is not always true. For example, someone who has had a personal
experience of cancer may well know where to find information, who to trust and how cancer
works to much greater degree than a PhD graduate who studied business and has not ever
really looked into cancer.

So, education as a socioeconomic factor can be general and specific as it determines

health.

Income
The final socioeconomic factor is income. Income will dramatically influence and help
determine your level of health. Income relates to the amount of money coming into your bank
account and often the more you earn the better your health can be. People with higher levels
of income can afford many of the health care services that are not completely covered by
Medicare.

Economic Factors and Their Effect on Business

Economic factors are an essential part of all business analysis. These are the main
factors considered when a company makes financial decisions.

These factors are connected to money, goods and services. They affect businesses on a
micro-level, but they are a lot more powerful than that – they also affect the entire 7 economy
on a macro-level. The economy, whether a local economy or a global one, will pretty much be
the determining factor in the details associated with the operation of a company, such as the
value of its assets, consumer demand and even taxes.

Some economic factors you must think about in your business include exchange rates, interest
rates, recession, inflation, taxes, and demand and supply. Here is a closer look into three of
these factors and their connection to businesses:

Interest Rates

Interest rates are everywhere, and are imposed by many different people. In fact, banking
institutions are obsessed with knowing what the status for interest rates in the economy is for
a good reason. It is how they determine their lending practices. It is also good information for
a company that relies on debt capital to finance ambitious projects.
Exchange Rates

This is a slightly more nuanced topic than that of interest rates. At the heart of it,
exchange rates are an important factor to consider for any business involved in importation
and exportation of various goods and services. When exchange rates fluctuate, they affect the
ability of a company to pay its international suppliers in a satisfactory manner. This can also
affect the profit margin of the company, as well as the amount of resources it needs to stay
afloat.

Recession

Whenever an economy faces a recession, it has the potential to change the attitude taken
by consumers toward their purchasing decisions. This may force companies to drop prices to
stay afloat.

How do socio-economic factors affect businesses?

Understanding the socioeconomic factors affecting business will help you make better
decisions about the future and direction of your business.

Environmental Analysis

This is a special term that refers to the process of looking at the external socioeconomic
issues in a business. It is considered a part of general business analysis, so it is useful to the
executives of a company. It can help them grow the organization, increase the streams of
revenue the company receives and also get ahead of competitors.

A subset of environmental analysis is the PEST analysis, or some of its variants, such as
the PESTLE analysis. This is a form of analysis that looks at four relevant factors that affect a
business environment, and these – Political, Economic, Social and Technological factors –
create the acronym “PEST.” There are other variations, such as PESTLE, which includes Legal
and Environmental factors. However, the four factors in PEST analysis are the main economic
factors that affect a business.

PESTLE analysis is one of the most popular tools used in business analysis, and for good
reason! It can tell you all about the circumstances that an individual, product, or organization
finds itself in, which can help in making decisions and understanding its current (or future)
position in the market. In this article, we’ll be thoroughly exploring the humble PESTLE
analysis in order to ensure you a complete understanding of this invaluable business tool.

What Is PESTLE Analysis?

PESTLE analysis is a business analysis technique which takes into account six groups
of external factors that can affect businesses. The six categories included are:
▪ Political factors
▪ Economic factors
▪ Socio-cultural factors
▪ Technological factors
▪ Legal factors
▪ Environmental factors
What does each of the categories include?
Sometimes it can be unclear what each of the categories should include in a well executed
PESTLE analysis, so here is a short summary of each of the factors along with a link to read
more about them.

Political Factors
The political factors taken into account for in PESTLE analysis are the variables which
pertain to both local and global politics, but yet still influence businesses. In PEST analysis,
factors relating to the law and legal environment are often grouped together with political
factors; however, it’s important to distinguish those as ‘legal’ factors in PESTLE analysis.
Nonetheless, examples of political factors might include:
▪ A country’s political system
▪ International relationships
▪ Government sanctions
▪ Subsidies

Economic Factors
In PESTLE analysis, the economic factors are ones which are connected with the general
state of the economy, goods, services and money. There are a number of different economic
factors which can affect business, including:
▪ Supply and demand for a certain product
▪ Taxes ▪ Interest rates
▪ Inflation

Sociocultural Factors
The ‘S’ in PESTLE stands for ‘sociocultural’ factors, or sometimes just simply ‘social’
factors. These are the factors connected with the general public and their behavior (in other
words, society and its culture). Here are some of the social factors that might have an impact
on business:
▪ Consumer lifestyles
▪ Social classes
▪ Immigration and emigration
▪ Family size

Technological Factors
Technological factors are ones which “relate to the existence, availability, and development of
technology.” It’s important to remember, though, that this is not just exclusive to digital
technology, but also includes mechanical and other physical technologies. Some examples of
technological factors are:
▪ The development of robots
▪ Internet connectivity
▪ Security in cryptography
▪ Engine efficiency

Legal Factors
PESTLE analysis also accounts for the legal factors that might affect a business. These
are external factors which focus on the influence that the law may have on business operation
and customer behavior. The important distinction between legal factors and political factors
is that the latter is concerned with government intervention in society and the economy to
create growth, while the former is concerned with government intervention in society and the
 economy to maintain fairness and wellbeing. Some examples of legal factors that you might
come across in a PESTLE analysis are as follows:
▪ Consumer law
▪ The legality of doing XYZ
▪ Fraud law
▪ Import/Export law

Environmental Factors
Environmental factors, also known as ‘ecological’ factors, refer to the variables
pertaining to the physical environment of the world we live on. A few examples are:
▪ Climate change
▪ Animal extinction
▪ Pollution

How do I use PESTLE analysis?

If you want to conduct a PESTLE analysis, the first step in doing so is deciding what
product, organization, or idea you want to analyze. Then, assuming it’s a business that you
want to analyze, you should fully explore all of its facets to identify any external factors which
are playing a part in how it operates and performs. Finally, you should attempt to categorize
each of the factors.
Don’t worry if one category has more entries than another, or if some factors don’t
entirely fit into any category. This can happen depending on the nature of the business that
you are analyzing.

Engage (What I Learned/Generalizations)

ACTIVITY 1.
Directions: Direction: List down at least three socioeconomic factors which you think may have
affected the business in your locality. Briefly explain why and how it affected the
business in your area. Accomplish this in your notebook.

ACTIVITY 2.
Directions: Complete the following statement.

1. I have learned that

________________________________________________________________________________________
________________________________________________________________________________________
2. I have realized that
________________________________________________________________________________________
________________________________________________________________________________________
3. I will apply what I have learned
________________________________________________________________________________________
________________________________________________________________________________________
 Apply (What I Can Do)

ACTIVITY 2. Newspaper Feed

Directions: Look for a picture or an article pertaining to the present situation that our country is
facing. Cut and paste it inside the box and answer the following questions below.

1. What kind of picture/article have you chosen? Describe it briefly.

___________________________________________________________________________
___________________________________________________________________________

2. Does it show any of the socioeconomic factors?

___________________________________________________________________________
___________________________________________________________________________

3. Based on your chosen picture/article, what are its implications to the business world?
Explain shortly.
____________________________________________________________________________
____________________________________________________________________________

Rubrics
Excellent Proficient Developing Poor
(4 pts) (3pts) (2 pts) (1 pt)
Pictures/articles are accurate,
appropriate, and integrated
effectively
Ideas are supported and elaborated
Sentence form and word choice are
varied and appropriate
Creativity/originality is evident
 Post Test

Directions: Multiple Choice. Directions: Read each item carefully. Encircle the letter of the best
answer for each test item.

1. This is a specialized branch of economics that concerns itself with studying the intimate
relationship between economics and social behavior.
A. socioeconomic C. social science
B. economics D. social behavior

2. It relates to the amount of money coming into your bank account.

A. employment C. income
B. education D. none of these

3. Which of the following is also good information for a company that relies on debt capital to
finance ambitious projects?
A. interest rates C. growth rate
B. exchange rates D. Recession

4. These are important factors to consider for any business involved in importation and
exportation of various goods and services.
A. interest rates C. growth rate
B. exchange rates D. Recession

5. This is a special term that refers to the process of looking at the external issues in a
business.
A. ecological analysis C. ABC analysis
B. environmental analysis D. All of these

6. Socioeconomic refers to society related economic factors. Among these factors, which of
the following gives positive example like community workers having good support
networks?
A. employment C. income
B. education D. none of these

7. What is your analysis of the given statements below?

Statement I. PEST analysis usually refers to the process of looking at the external
socioeconomic issues of the business.
Statement II. The economy, whether a local economy or a global one, will pretty much be
the determining factor in the details associated with the operation of a company, such as
the value of its assets, consumer demand and even taxes.

A. Only Statement 1 is true C. Only Statement II is true

B. Both Statements are true D. Both Statements are false
8. There are economic factors which greatly affects business. Which among the following has
the potential to change the purchasing attitude of customers that might force companies
to drop their prices or clear smaller volumes?
A. interest rates C. inflation rates
B. exchange rates D. recession

9. Which of the following doesn’t describe PESTLE analysis?

A. It is one of the most popular tools used in business analysis, and for good reason.
B. It is considered as the other variant of PEST analysis.
C. It is a business analysis technique which considers one group of external factors that
can affect businesses.
D. none of these

10. In using the PESTLE analysis, which is considered to be the last step to take?
A. Decide what product, organization, or idea you want to analyze.
B. Explore all the facets of PESTLE analysis to identify any external factors which are
playing a part in how it operates and performs.
C. Attempt to categorize each of the factors.
D. Don’t worry if one category has more entries than another, or if some factors don’t
entirely fit into any category.