SAN JACINTO CATHOLIC SCHOOL, INC. App. Econ.

12
San Jacinto, Pangasinan
APPLIED ECONOMICS (ABM &GAS) 12
GRADE 12 LEARNER’S MODULE 7 & 8 – 4th Quarter, Weeks 13-16

Lesson 1: Socio-Economic Impact Study

MELC’s: In this module the learners will be able how to:

1. Identify and explain the various socioeconomic factors affecting business and industry
2. Analyze and evaluate the viability of a business and its impact on the community
3. Formulate recommendations and strategies on how to minimize and maximize a business’s
negative impact and positive impact, respectively.

INTRODUCTION:

A socio-economic impact assessment weighs the socioeconomic cost against the socio-economic
benefit. As far as possible, the analysis includes the consequences for all participants in society and all
kinds of impacts, for example: Social impacts (e.g., health) Economic impacts (can include effects on
employment issues, poverty etc.). Poverty is a socio-economic issue. Socio-economic issues are factors
that have negative influence on an individuals' economic activity including: lack of education, cultural and
religious discrimination, overpopulation, unemployment and corruption. Socioeconomic factors are primarily
(PEST) Political, Economic, Social, and Technological factors.

INSTRUCTION/DISCUSSION:
 Socioeconomic field of the study that examines social and economic factors to be
better understand how the combination of both influences something
 What is Socio-Economic Impact Study?
Socio-economic impact, studies on evaluating the impact development on Changes in
incomee and
community social and economic welfare. employment
Development impacts can be assessed in terms of:
Standard of
The Goal of Socioeconomic Study living of the
community
 Is generally to bring about socioeconomic development, usually by
improvements in metrics such as Gross Domestic Product (GDP), life
expectancy, literacy, levels of employment, etc. Public
Housing
 Socioeconomic factors are characteristics that define the quality of life in services

a society. They influence the behaviors, attitudes, tastes and life-styles

of individuals.

Different socio-economic factors (PEST)

1. Political Factor includes government policy, political stability or instability, corruption, foreign trade
policy, tax policy, funding grants and initiatives, etc.
2. Economic Factors - economic trends, growth rates, industry growth, seasonal factors, international
exchange rates, international trade, labor costs, un-employment rates, inflation, etc.
3. Social factors - attitudes and beliefs about a range of factors including money, costumer, services,
religion, cultural taboos, health, work, leisure, environment, population growth, lifestyle trends and etc.
4. Technological Factors - technology and communication infrastructure, legislation around technology,
consumer access to technology, emerging technologies, automation, research and innovation,
technology incentives, etc.
SOCIAL FACTORS AFFECTING THE BUSINESS

 Population Growth Rate - Population often takes advantage of the social factors. The supply and
demand of goods and services in an economy can change with the structure of the business. Decline
in birth rates mean demand will decrease. It also indicates greater competition as the total consumers
falls.
 Change in Social Preference - Social preferences relating to fashion or fad are continuously changing.
If a business refuses to adapt to changing social preferences, its sales will decline and business will
fail.
 Health Consciousness - Social factors change people’s attitude. A good example is people’s attitude
towards healthy diet. Because of this, businesses like fitness center and demand for organic food
changes.
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  Values, Beliefs and Practices - A business must be aware of the people’s social preferences regarding
its needs and wants. This preference and needs and wants will be influences by a population’s value,
beliefs and practices.
 Education - A society that values higher education will provide a better workforce that will lead to more
productivity and innovation.
 Hard Work Ethics - Work ethic is a value based on hard work and diligence. Business believes in the
requirement and hard work and its ability to enhance character. A community that values hard work
ethics, business will have access to productive workers.
 Attitude towards investment - A society that supports investment in infrastructure will have access to
good transportation and communication system.
 Attitude towards green and ecological products - Consumers with positive attitudes towards green and
ecological products are more likely to purchase green and ecological products.

ECONOMIC FACTORS AFFECTING BUSINESS INDUSTRY

1. Inflation Rate- Higher inflation rate leads to decrease in the purchasing power of money for the people
resulting to lower demand for goods and services.
2. Interest Rate- Higher interest rates will lead to decrease in the total demand in the economy and very
difficult for business to find customers who are willing and able to buy its product. Lower interest rates
will lead to an increase in demand in the economy.
3. Unemployment level- High level of unemployment will greatly affect business. Unemployment people
will not have enough money to buy goods offered in the market.
4. Labor costs- High cost of labor (salary/wage) will result to higher production costs. Higher production
costs will lead to higher prices of goods and services.
5. Taxes- Higher taxes will lead to decrease in take-home pay of an individual and decrease in demand in
the economy.
The Social and Ethical Impact of Business to Society
Economic Impact on Society
 Wages and salaries paid to employees to improve their standard of living.
 Timely payment for the supplies of goods purchased on credit from the suppliers.
 The value of goods and services sold to customer

Governance
 Business ethics must be the priority in every business transaction. Its businesses offer bribes in exchange
of work and other benefits, the ethics of society suffer corruption may raise the price of goods and
services when companies engage in price fixing (maintaining of prices at a certain level by agreement
between competing sellers)
Privacy
 All information collected from customers must be treated confidential. Some information may be sensitive
like medical history and amount of money deposited. Businesses have a negative impact on a society if
consumers find out that companies are not keeping such information secure or are selling it to 3rd parties.
Avoid doing things that may hinder the exchange of personal and private information that helps in
business operation.

Environment
 Businesses that implement environmental policies to use energy more efficiently, reduce waste and in
general lighten their environmental footprint can reduce their internal costs and promote a positive image
of their company. The environmental initiatives of a market leader often force competitors to take similar
action for an increase beneficial effect on the environment.

What are the benefits of measuring Socio-Economic Impact?

1. Obtaining or maintaining a license to operate.
2. Improving the business enabling environment
3. Strengthening value chains - By assessing their socio-economic impact, companies are better equipped
to predict the loyalty, performance, stability, and capacity for growth of their suppliers, distributors, and
retail partners- Identifying vulnerabilities and opportunities to address them.
4. Fueling product and service innovation- Measuring socio-economic impact can help companies better
understand the needs, aspirations, resources and incentives of their customers- enabling them to
develop new products and services and improve existing offerings. Yet, to effectively create value for
the business and its stakeholders, measuring must be aligned with a company’s strategy and integrated
into ongoing business performance management and reporting. As challenging as it sounds, this means
redesigning the scope of corporate strategy and processes across measurement, management and
reporting.

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 Lesson 2: Viability of a business and its impact on the community and Recommendations and
strategies on how to minimize and maximize a business’s negative impact and positive impact

INTRODUCTION:
Business plays a huge role in the society. It not only takes up the most amount of time in people lives
but it also helps create innovations and make important technological advancements. It makes forward thinkers
and dreamers turn visions into reality. Making people lives easier.
Only when companies are profitable, they can contribute effectively to society by creating jobs and economic
development. It cannot be assumed that companies adopt a responsible business conduct. However,
corporate social responsibility can contribute to the success of business and betterment of society.
As you go through the lesson, you will learn how business affects society. In turn, evaluate business viability
and its effect on the community.

INSTRUCTION/DISCUSSION:
The goal of community sustainability is to establish
local economies that are economically viable,
environmentally sound and socially responsive. Achieving
this goal requires participation from all sectors of the
community. both to determine community needs and to
identify and implement innova- tive and appropriate solutions.
Business sustainability is a goal for most enterprises.
Sustainability in business generally addresses two main
categories which are the effect business has on the
environment and the effect business has on society.
Sustainability focuses on meeting the needs of the present
without compromising the ability of future generations to
meet their needs. The concept of sustainability is composed
of three pillars: economic. environmental, and social-also
known informally as prof its. planet. and people.

As a micro business owner, making the case for a sustainable business is simple. An environmentally friendly
business can be a profitable one. It can easily done by attracting green conscious consumers and publicity,
create value for employees, customers and public, reduce energy use and im- prove public health.

Viability is defined as the ability to survive. In a business sense, that ability to survive is ultimately linked to f i
nancial performance and position. A business is viable where either: it is returning a prof it that is sufficient to
provide a return to the business owner while also mee ting its commitments to business creditors; it has
sufficient cash resources to sustain itself through a period when it is not returning a prof it.

A viable business has great effects to the community. Some of this are:

1. It provides community jobs in the business sector;

2. It produces taxable income for the community from both the business establishment and the workers
3. Government continuously makes improvement in the community infrastructures such as bridges, roads,
sewers, water or electric to entice other business to invest in the community.
4. It helps in the establishment of better schools, more business and even more jobs for its citizens.
5. It leads to improved business services to the community
6. It improves community life.

The economic contributions to the societies in which business operate are significant. These include payments
to host governments in the form of taxes and royalties, which in turn directly support long-term regional and
national development, including public services and infrastructure. Bust- ness provides broader economic
contributions to society through salaries, procurement and community investment.

Corporate Responsibility to Consumer

 Being honest, hard-working men and women are the qualities of that most of the Filipinos are looking the
business owners and their employees. They are concerned about a profit for their efforts but they are also
concerned about their responsibilities to consumers.
 Consumers could easily identify irresponsible firms and refuse to trade with them. However, those firms
that acquire a reputation for high quality, informative and convenient packaging, careful labeling,
consumer safety and environmental sensitivity are likely to gain profit.
Product Quality
 A consumer has the right to expect uniform product quality. They have the right to expect that what they
seen in their advertisement will be the same when they purchase it. The quality of the products that have
been established should not be changed/lowered to make more attractive for the existing and new
customers Firms that give more attention in monitoring the quality of their products are more successful
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 than those who are not responsible enough to do it.

Effects of Business on Consumers

 A successful business influences the behavior of consumers to encourage them to buy its products. The
business does this by studying consumer needs and adopting strategies to persuade as many consumers
as possible that the products have value.

Methods to Influence Consumers Emotionally

1. Consumers are more likely to respond to material that connects on an emotional level, and surprise
combined with repeated episodes of joy or humor is effective.
2. Encourage Customers to Look for Value
3. If you solve a common problem for consumers more effectively than your competitors, or solve it at
substantially lower cost, you can influence consumers to switch to your brand
4. Offer Social Responsibility
5. Consumers who want to buy from socially active and environmentally responsible companies respond
positively.
6. Change Behavior with Excellent Service
7. The level of service individual customers experiences when dealing with your company can have a
profound effect on customer behavior.

Factor Affecting Household Spending

Household spending is the most important part of aggregate demand. The pattern of spending changes over
time as a result of changes in:
1. Household Income - some goods are normal goods while others are inferior, so increases in income
encourage households to shift spending from goods with a low-income elasticity of demand, like food, to
those with high income elasticity of demand, like holidays.
2. Tastes and Fashions - over time spending on certain items that are in Fashion increase relative to those
that go out of fashion.
3. Taxes and Subsidies - as indirect taxes and subsidies rise and fall, households will be encouraged or
discouraged from spending.
4. Relative Prices - as the prices of certain goods and services rise in relation to other, household spending
will adjust.
Determinants of Spending
1. The Current Level of National Income - Some extra spending is induced by changes in the current level of
national income.
2. The Level of Savings - Spending and saving are mutually exclusive, which means that if income is fixed,
any changes in household savings will inversely affect spending
3. Expectations - If households are confident, and have positive expectations about the future, current
spending can rise.
4. Rates of Income Tax - Changes in tax rates can clearly affect disposable, post-tax income, and hence
affect household spending.
5. Interest Rates - By altering the level of savings - a rise in interest rates will stimulate more savings, and
less spending at Impact Business and Consumer Confidence

Figure 1: Business Impact to Economic

Sectors

The combination of outgoing and incoming

impact between Business and Economic
Sectors, in which a business can be
influenced by external economic sector and
also had an impact to another external
economic sector.

Practice:
What is the importance of knowing the various socioeconomic factors?

References:
Applied Economics Phoenix Publishing House Authors: Patrick V. Caoile, Ph.D, Erlinda C. Pefianco, Ed.D
https://www.studocu.com/ph/document/university-of-perpetual-help-system dalta/applied-economics/socio-
economic-impact-study/28988953
https://www.studocu.com/ph/document/st-michaels-college-iligan/accountancy/app-econ-module-11-joey-
t/25412667

Prepared by: Teody John V. Fernandez

Melissa C. Gamboa
APP.ECON 12Page 4 of 8
 SAN JACINTO CATHOLIC SCHOOL, INC.
Applied Economics (12) – Evaluation for Module #7

Name: _____________________________________Strand/Sec: ___________ Date: Score: ___

Written Works
NOTE: Do your evaluation here. This page should be detached and be submitted for next schedule of
modules delivery/pick-up.

Directions: Read each sentence carefully. Write T if the statement expresses correct idea. If the statement is
incorrect, write F and replace the underlined word or phrase to make it correct. (20 pts)

________1. Socio-economic is a branch of economics that concerns with the relationship of economics and
social behavior.
________2. The study of social economics predicts what kind of result to expect when the society has been
changed.
________3. Different socioeconomic classes will have different priorities and this will affect how they spend
their money.
________4. Businesses and industry will continue growing even without understanding the socio-economic
factors.
________5. PEST analysis are the main economic factors that affect a business.
________6. If recession happened to a specific company the prices of their product will increase.
________7. Pandemic affects our social behavior.
________8. Tax and revenues are stable in this pandemic times.
________9. Demand will increase in this time of pandemic that leads to scarcity.
________10. Business and Industry are affected by social behavior.

PERFORMANCE TASK

Directions: Group the class into 4 groups and each group will assign one topic about socio-economic factors.
Each group will think of a scenario that explained the factors of socio-economic then perform it. Record and
send it thru messenger/Facebook. It should only be a maximum of 10 minutes. (50 pts)

Group 1: Political Factor

Group 2: Economic Factor

Group 3: Social Factor

Group 4: Technological Factor

RUBRICS
Originality 15
Creativity 15
Presentation 20
Total 50 pts.

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 SAN JACINTO CATHOLIC SCHOOL, INC.
Applied Economics (12) – Evaluation for Module #8

Name: _____________________________________Strand/Sec: ___________Date: Score: ___

NOTE: Do your evaluation here. This page should be detached and be submitted for next schedule of
modules delivery/pick-up.
Directions: Look for a successful small business in your neighborhood or online business. Interview the
owner and find out the following. (20 pts)

1. Name of the owner

2. Name of the business
3. What they are selling?
4. Reasons for putting up the business
5. Problems encountered?
6. Reasons for its success
7. How they help the community?
8. How the community affect their business in positive and negative way?

Performance Task: (45%)

Directions: Think of an existing business established in your locality and fill up the needed information with
your own perception.

Example: convenience store, gasoline station, fast-food restaurant, lumber, bank and etc.

Business Name:

Business Location:

List down three (3) inputs needed - example: employee, raw materials (ingredients) capital (investment).

1.

2.

3.

List down three (3) outputs such as products or services offered.

1.
2.

3.

List down two (2) related business to business (B2B) e.g., fast-food restaurant buys their utensil at the local
supplier of spoon, fork and plates and bank (financial institution lends capital to a convenience store owner.

1.
2.

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