Applied Economics-12

Alternative Delivery Mode

Quarter 2 – Module 4: Socio-Economic Impact Study
First Edition, 2020
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Published by the Department of Education
Secretary: Leonor M. Briones
Undersecretary:
Assistant Secretary:
Development Team of the Module:

Authors: Roberto Development Team of the Module

A. Navales
Kharen P. Salusad
Authors: ROBERTO A. NAVALES, KHAREN P. SALUSAD
Evaluator: Zalvy Jean P. Galindo
Gwendylou
Evaluators: ZALVY JEAN P. GALINDO, GWENDY E. Dableo
LOU E. DABLEO
Illustrator: Jay Michael A. Calipusan
Management Team:
Management Team:
Chairperson : Dr. Arturo B. Bayocot, CESO III
Chairperson: Dr. Arturo B. Bayocot, CESO III
Regional Director
Regional Director
Co-Chairperson: Dr. Victor G. De Gracia Jr., CESO V
Co-Chairpersons: Dr. Victor G. De Gracia Jr., CESO V
Asst. Regional Director
Asst. Regional Director
Mala Mala Epra B. Magna-ong
Epra B. Magnaong
CES, CES, CLMD CLMD
Members:
Members : Dr. Bienvenido
Dr. Bienvenido U. Tagolimot,U. Tagolimot,
Jr. Jr.
Regional EPS-ADM ADM Coordinator
Ray Butch M. Mahinay
Dr. Neil Improgo
EPS-Designate-
Regional EPS-LR AP

Vivian D. Echalico
EPS-LR
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Office Address: by _______________________________.
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Email Address: region10@deped.gov.ph

i
 12
APPLIED ECONOMICS
Quarter 2 – Module 4:
Socio-Economic Impact Study

This instructional material was collaboratively

developed and reviewed by educators from public and private
schools, colleges and or/universities. We encourage teachers
and other education stakeholders
to email their feedback, comments, and recommendations to
the Department of Education at action@deped.gov.ph.

We value your feedback and recommendations.

Department of Education • Republic of the Philippines

ii
TABLE OF CONTENTS

What I Need to Know ……………………………………………………………. 1

Objectives ………………………………………………………………… 1

General Instructions……………………………………………………… 2
What I Know ………………………………………………………………………3-5
Lesson 11 – Various Socio-economic Factors Affecting

Business and Industry…………………………………………...5-12

Lesson1 2 – Viability of Business and its Impact on

the Community…………………………………………………13-18
Lesson1 3 – Strategies to Minimize Negative Impact or Maximize

Positive Impact of Business…………………………………...9-24

What I Have Learned ………………………………………………………….24-25

Assessment …………………………………………………………………….26-28
Answer Key…………………………………………………………………………29
References ………………………………………………………………………...30

iii
 WHAT I NEED TO KNOW

This module is all about the basic concepts of socio-economic impact

of business on various sectors of the community. The focus of analysis is on
the impacts of business operations on various sectors that interact with in its
production and distribution activities.
This module has three lessons:

Lesson 1 – Various Socio-economic Factors Affecting Business and Industry;

Lesson 2 – Viability of Business and its Impact on the Community; and

Lesson 3 – Strategies to Minimize Negative Impact or Maximize Positive

Impact of Business

Enjoy and happy learning!

After studying and working on all activities in this module, you will be
able to:
1. Identify and explain the various socioeconomic factors affecting
business and industry (ABM_AE12II-e-g-11)

2. Analyze and evaluate the viability of a business and its impact on the
community (ABM_AE12II-e-g-12)

3. Formulate recommendations and strategies on how to minimize and

maximize a business’s negative impact and positive impact,
respectively (ABM_AE12II-e-g-13)

1
 To achieve the objectives of this module, do the following:

As you read this module and do all the activities, you will develop and
improve many skills, which hopefully, make you a better
learner. Before you begin, however, there are a few things you must
do:
1. Read slowly and carefully the first two parts of this module. The
first part tells you what this module is all about and what to
expect from it. The second part tells you what you are expected
to learn.

2. Do not proceed to the next page unless you are done with the
previous one.

3. Before you begin working on the activities, take the pretest in

the Pretest Section.

4. Remember of the skills that each activity is helping you develop.

5. When you are done in each activity, proceed to the Self-Check

Section which is next, to find out how well you understand the
activity. Recheck your work to find out the items that you have
missed.

6. Work on the Post-test in the “How much have you Learned”

section.

7. After the post-test, be now ready for a conference with your

teacher. This is the moment when you should ask her about the
difficulties, if there is any, and to clarify your confusion.

8. At the end, you prepare all your outputs. You are expected to
pass them to your teacher. This is usually a learning portfolio,
containing all your activities done.

Good luck and enjoy while learning!

2
 WHAT I KNOW

Multiple Choices: Encircle the letter that corresponds to the correct

answer.

1. A person who purchase goods and services for personal use.

A. Consumer B. Economics C. Income D. Supplier
2. Any person or other entity (such as a firm or mutual fund) who
commits capital with the expectation of receiving financial returns.
A. Consumer B. C. Income D. Investor D. Supplier
3. An activity which makes one’s living or makes money by
manufacturing, developing, buying and selling products (goods &
services)?
A. Business B. Households C. Government D. Marketing
4. Classified as a social unit that has similarities regarding the
communities norms, religion, values and identity.

A. Business B. Community C. Poverty D. Traders

5. The production of goods or related services within an economy.

A. Business B. Community C. Industry D. Locality

6. This refers to the exchange of goods and services between countries.

A. Exporting Goods C. International Trade
B. Importing Services D National Economic Trading
7. Provide permits, security, and protection policy to businesses in
exchange for taxes paid for the economy.
C. Community C. Government
D. Household D. Investors

8. The following are the impact of the businesses to the government,

EXCEPT,
A. Businesses conduct projects like tree planting, and housing
B. Employees hired by the businesses pay personal income taxes to BIR
C. Tax are imposed on the incomes of the business
D. The benefit provided by businesses through the payments of taxes

3
9. It is an effect of transactions that happened to parties outside the
transactions of buyers and sellers.
A. Externalities C. Internalities
B. Middle Management D. None of these

10. What do you called the spill over effects that enhance the welfare of
a third party?

A. Negative externality C. Both A and B

B. Positive externality D. None of these

11. If the third party’s welfare is reduced, what do you call the spillover
effect?

A. Negative externality C. Both A and B

B. Positive externality D. None of these

12. The following are the third parties that benefit the spillover effect of
the transactions of buyers and sellers, EXCEPT,
A. Capitalist C. Environment
B. Community D. Individuals

13. The following are examples of positive impact of business to the

society, EXCEPT,
A. Construction of infrastructure like roads that have positive effect on
the neighbouring communities and where other business enterprise
may be encouraged to establish their presence nearby to cater the
needs of the of the community

B. Sourcing labor services, technical professionals, and managers in

huge plantations and mining companies may opt to build
communities within their business complex that has educational,
health, social, and cultural religious facilities.

C. The impact of the sales of firm of its outputs to other firms as

intermediate inputs and as capital goods. These repeated
transactions of constant sales contribute to the strengthening of the
integration of the economy.

D. Using non-renewable raw materials like oil and minerals have high
environmental costs

4
14. What are the positive spillover effects of huge plantations and
mining companies?
A. Construction of infrastructure like roads
B. Other business enterprises may encourage to establish their
presence nearby to cater the needs of the community

C. Sourcing labor services, technical professionals and managers

D. All of the above
E. Only A & C

15. What would be the long term effect of protecting the environment
through the use of ecologically friendly technologies?
a. The firm can operate with a steady supply of raw materials for a
longer period
b. The fruits of our natural resources can be sustained for the next
generations to enjoy
c. A and B
d. None of these

LESSON 1 :Various Socio-economic Factors Affecting Business and

Industry

WHAT’S IN

I. Socio-economic Factors Affecting Business and Industry

In the previous lesson you have seen how a business company and an
industry interact with external factors, forces, and environments affecting its
profitability..
In this lesson, you focus on the understanding of the socio-economic
factors affecting business which will help you make better decisions about the
future and direction of your business. You will be able to analyze on the
impact of business operations on various sectors as it interact with its
production and selling activities.

5
 WHAT’S NEW

A. Picture Surfing and Analysis:

a. Search for pictures or images related to the words numbered below.

b. Cut and Paste the surfed picture inside the box corresponding the word.
c. Describe the picture briefly.

1. Business □ 2. Industry

_________________________ ___________________________
_________________________ ___________________________
_________________________ ___________________________

3.Consumer 4. Capital

_______________________ _______________________
_______________________ _______________________
_______________________ _______________________

5. Income

6
 WHAT IS IT

1. What are the socioeconomic factors and how these affect businesses
and industry in general?

Business has to pass through various socioeconomic factors and has

to be affected by such factors in its will of making money or profit by
producing or buying and selling products in the form goods and services.

1. Socio-economic factors include all transactions that the business has

to interact with comprising land, labor, capital, and technology.
Business could not operate without a rented or owned real estate. It
could not function without employing laborers, and providing
investment.
Furthermore, Socio-economic factors are considerations about how the
business itself operates from within taking into account the capital, capacity of
business, the sources or suppliers, the product to be produced, and the
services to be offered, among others.
Socio-economic Factors Affecting Business also includes the
practice of consumer in using new products and services. If households
are experiencing poverty alleviation due to employment opportunities adding
more to their income, there is a great tendency for them to spend more
money in the market place demanding new products and services. Thus,
businesses are doing well in the process producing sustainable employment
in return or even expansion of the same business or opening up another form
of business catering not just the basic needs but somehow luxurious wants of
consumers.
The impact of the availability of raw materials or supply for business
is another thing that affects business. It is necessary to determine the
investors’ needed capital and expected income. If raw materials needed for
supply become scarce there is a tendency for business to increase the price
employing the law of demand and supply to insure returns of investment.
In a larger industry it may include the government intervention on taxes
or its policy on investment, and the import export dollar transactions that the
business maybe dealing with. If the policies of the government are favourable
to foreign trade and relations, then outside contacts and influence will be
promoted but if government adopts “nationalistic” policies, then it will close the
country to foreign influence which in turn affect the viability of local business
and industries.

7
Other factors affecting business may include the following:
a. Payment of Government Taxes
Barangay, Municipal, or City permits, and real estate taxes, are
paid in local government units while value added tax, import-export
duties, income taxes are due to national government. Taxes paid by
business enterprise are considered a component of production cost
because it is added to capital outlay of the business in the
operation.

b. Mode of the International Trade

Some businesses especially the medium and large scale
enterprises are usually affected by the dollar exchange rate in the
economic transactions, because it may directly affect the exports
and imports cost of products which in turn may directly or indirectly
affect production cost and the setting of the selling price.

2. How are You Going to Determine the Socio-Economic Status of

Consumers as a Factor Affecting Business or Industry?

Consumer’s Behavior and Its Significance on Business

The determination of the consumer’s behavior and their decisions on
what to buy for consumptions is another factor. Consumptions refer to the
use of goods and services to satisfy the basic needs and wants of consumers.
Different socioeconomic classes will generally have different priorities, and
this will affect how consumers spend their money.
As investors ready to use capital for business, you must be able to look for
a secured or feasible consumers. The consumers are the persons who buy
the products business offers for sale. It is therefore imperative that we get to
please the consumer, so he/she will buy from you instead of from your
competitors. Once satisfied the buyer would be eventually become our ”suki”
or regular customer.
Determining the Socio-Economic Status of Consumers and Its
Effects on Industry

Wherever your small business or big business as an industry is located,

there are going to be socioeconomic factors that affect it, because social class,
that is upper class, middle class, and lower class individual status are
attributable to the socioeconomic factors that determine the success and
failure of every business. Be it being an industry (big business) or a
community investment (small or medium size business).
8
 The following are the main parameters of socio-economic status of
consumers or buyers:

1. Income - when income is scarce, customers tend to restrict their

spending to essential items;
2. Education/Skills - A society that has it that a well-educated and
skilled population flourishes because individuals are employable in
well-paying jobs; and
3. Occupation - refers to the type of jobs people perform by virtue of their
skills, experiences or choice.

A person who may have education or skills has a greater tendency to land
a job or may acquire permanent occupation that generates income. It is
therefore important to consider the implications of these socioeconomic
factors on your business decision-making. Your decisions should be sensitive
to the prevailing economic conditions (ex. when pricing and stocking your
business). Consumers have the tendency to avoid expensive items during
periods of economic failure. Moreover, customers in the different social
classes have different tastes and preferences. Be sure not to ignore the
consequences of these socioeconomic parameters in deciding what products
you are going to produce or sell.

WHAT’S MORE

Directions:
A. Recall any businesses you know which are operating in your
locality. Name at least 5 different kinds of these businesses and
write them down on the table below and indicate what particular
product/s they are selling.

9
Name or Kind of Business Product Sold

1.
2.
3.
4,

5.

B. Make you own evaluation how these businesses that you

enumerated on the table above operate, considering the following:
a. production or supply capabilities of the businesses; and

b. the socio-economic status of their customers.

1._____________________________________________________
______________________________________________________
______________________________________________________

2._____________________________________________________
______________________________________________________
______________________________________________________

3._____________________________________________________
______________________________________________________
______________________________________________________

4. .____________________________________________________
______________________________________________________
______________________________________________________
10
5._____________________________________________________
______________________________________________________
______________________________________________________

WHAT I HAVE LEARNED

Fill in the Blanks. Write the most APPROPRIATE WORD OR

STATEMENT referred to in the following definitions on the space
provided before each number.

__________________1. Factors that include all transactions that the

business has to interact with comprising land, labor, capital, technology,
among others.
__________________2. An activity which makes one’s living or makes
money by manufacturing, developing, buying and selling products (goods &
services)?
__________________3. . Taxes paid by business enterprise which are
considered a component of production cost because it is added to capital
outlay of the business in the operation

__________________4. The dollar exchange rate in the economic

transactions directly affect the exports and imports cost of products.

__________________5. refer to the use of goods and services to satisfy

human wants directly.

__________________6. refer to the use of goods and services to satisfy the

basic needs and wants of consumers.

__________________7. are the persons who buy the products business

offers for sale.

11
_________________ 8.
The three main socio-economic status
_________________ 9. of buyers or consumers

_________________10.

WHAT I CAN DO

POSTER MAKING PRESENTATION

A. Make a Poster promoting the Kind of Small Business that you

want to Put-up

B. Present Your Poster in CLASS, and your presentation will be rated

following the Rubric below:

RUBRIC FOR POSTER-MAKING

a. CONCEPT REPRESENTAION=50%
b. NEATNESS AND CLARITY =50%

12
 LESSON 2: VIABILITY OF A BUSINESS AND ITS IMPACT ON THE
COMMUNITY

WHAT’S IN

How does business become viable or profitable? This question

probably arises from your attention upon reading the lesson title. But this
particular question has already been given explanation in the previous lesson
in the discussion of socioeconomic factors and their effect to business and
iindustry, along with the determination of the socio-economic status of
consumers in ensuring sales and profitability. Thus, generally, business is
viable when it survived through various socio-economic factors in its operation
and still making money along the way and is able to sustain its growth and
development.
Now is the time for you to understand how to work on business and its
effect to the community.

WHAT’S NEW

Identifying Business Opportunities

Write down in the columns, the names of businesses,

belonging to a given category below.

Businesses that Require Businesses that Require

Lesser Capital Lesser Manpower (Laborer)
1. 1.
2. 2.
3. 3.
4. 4.
5. 5.

13
 WHAT IS IT

A. Business as a Commitment to Foster Sustainable

Economy

Business has to establish relations with the community be it a small or large

social unit where people have something in common, in norms, religion,
values, or identity because it determine the very existence and sustainability
of business itself.
Business as a provider of both goods and services is
extremely important to the economy, starting from a community where it
emanates and up to the country’s economic sustainability. Any business must
also be concerned with consumer welfare, job creation, environmental issues,
uplifting the quality of people’s lives in a community, and contributing to the
whole economy. The business generated jobs because they need human
resource to produce and sell their goods and services to the consumers. It
is also an opportunity for the entrepreneurs to create solutions from the
problems and crisis the society is facing.
Once you get into business one of the most significant things that you
have to do other than the establishment of employees-employer healthy
relationships is to ensure customers patronage by maintaining or improving
your products’ quality and offered services.

In the business world everything doesn’t always go just right. Problems

happen, big and small. A negative issue can be a major company’s problem,
or become an unexpected opportunity to build positive promotion of products
or services by the same company itself.

Business must also make a relevant impact to the consumer, the

supplier and investors, to our government, and to every household.
We often hear that medium and small size businesses are the engines
of job creation in general. Their value and the role they play in Philippine
economy is sometimes underestimated. But the truth is they have the greater
impact on our economy, especially in communities or localities like the
barangays and towns.
B. Establishing the Appropriate Business in the Localities
Small industries contribute to local economies by bringing progress and
improvement to the community in which the business is established. Small
industries also help motivate economic growth by providing employment
openings to people who may not be employable by larger corporations.

14
 But doing local business is not just about making profit but also a way
for community involvement of investors by creating more jobs, increase tax
base, provide product diversity for healthy competition, and in some ways
creating a community identity for tourism and other potentialities in the
localities. Hence, small business in the localities is affecting the income
generation of households within those localities which in turn also have
impact in the nation’s economy. Households also enable businesses to tailor
products and services to best suit them as consumers.
Successful entrepreneurs start their businesses by determining viable
business model or idea with high community impact potential like choosing
the right product to produce or sell that is innovative and service oriented.
. No matter how small or big a business is, to be prosperous, investors must
ask the following question to begin with:
1. How will you get the raw materials or supply?
2. What is the potential market size or demand?
3. Who are your competitors?
4. Who are your target customers?
5. What is your potential selling price?
It is also very important to establish Organizational Control that
includes control in developing rules, guidelines, procedures, limits or other
protocols for directing the work and processes of employees and department
of the business by the management.
C. Business Impact in its Operation
1. Impact to the Consumer – bringing some new and innovative
products or service to the market is always welcome to consumers who
is looking value for his money.

2. Impact on Suppliers and Investors – businesses provide

opportunities for suppliers and investors that will supply them their
needs and which means income for them. More business means more
jobs, more hired workers means more income, more investment means
more production and return of investment, more income to the
economy is leading to economic growth.

3. Impact on the Government – this will benefit from the establishment

of new businesses through revenues earned on fees collected from
them and on tax imposed on the incomes of the business.

4. Impact on Households – businesses mean employment opportunities

for the Filipinos.

15
5. Impact on the local government’s programs – CSR or the Corporate
Social Responsibility has become a growing trend among businesses
today. Small and big corporations increased focus on projects like

scholarships, housing, tree planting, and other related programs for the
communities which are usually anchored on the Local Government
Units (LGU) programs.

WHAT’S MORE

A. Video Clip Discovery

Watch the Videos with the Following Titles:

a. “Best Business ideas in The Philippine” you are going to see this
video by opening https://www.youtube.com/watch?v=3HscegIiBkM,and

b. “Negosyong Maliit Ang Puhunan Malaki Ang Kita - Negosyo Tips

Philippines Business”you are going to see this video by
Opening https://www.youtube.com/watch?v=tbMqxW_X4y0which

Note to the Teacher

The teacher May Provide the said Videos to Facilitate the Activity

B. What to Do with the Video

After watching, write a short reaction Paper about the Video in not
less than 100 words.
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
16
 WHAT I HAVE LEARNED

Directions: Write True if the statement is correct, False if incorrect

________1. Making business is all about making money.

________2. Business owners’ involvement in community includes paying the

right taxes.

________3.To make profit, every business must sell more products as the
owner wishes.

________4.The question “Who are your competitors?” is about knowing how

are you going to compete with others of the same business by continuously
improving the product.

________5. Organizational control is about managing the business.

WHAT I CAN DO

The Business in You

Answer the following questions:

1. If given the chance, what business do you want to put up? Please
describe what could it be.
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________

17
2. State your plans with the business that you want to put up. Please
include the name of your business, nature of business, product
offerings and initial capital.

______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
__________________________________________________________

18
LESSON 3: RECOMMENDATIONS AND STRATEGIES TO MINIMIZE AND
MAXIMIZE A BUSINESS’S NEGATIVE AND POSITIVE IMPACT

WHAT’S IN

From the previous lesson, we discussed about the socio-economic

impact of the business to the community. Then we traced the impacts of the
businesses on its’ own suppliers of inputs and its buyers of outputs. Impacts
brought by direct or indirect transactions between the firm and its clients.
On this lesson, we will be discussing on how to minimize the negative
impact and maximize the positive.

WHAT’S NEW

Directions: On the upper part is the “Heaven”. Write down on what strategies
you could think to maximize a business’ positive impact on society. On below
is the “Earth”. Write down the strategies on how to minimize a business
negative impact on society.

19
 Work on Heaven and Earth
“HEAVEN”

“EARTH”

RUBRICS FOR THE ACTIVITY

CATEGORY 5 4 3 2 1

Strategies Shows a full Shows a Shows a Does not Does not

understandi good good seem to understan
used ng of the understand understand understand d or
topic. ing of the ing of parts the topic address
topic. of the topic. very well. any topic.

Mode of Makes good Makes fair Makes Makes little Makes no

use of the use of some use or any use real use of
Presentation chosen chosen of medium of medium, any
medium to medium to to engage or does not medium.
engage the engage audience attempt to No
audience’s audience attention. engage audience
attention. attention. audience engageme
attention. nt

Preparedness Student is Student Student is Student did Student

completely seems somewhat not seem did not
prepared prepared prepared, at all present.
and has but might but it is prepared to
obviously have clear that present.
mastered needed a mastery is
the topic couple lacking.
discussed. more
mastery.
TOTAL
20
 WHAT IS IT

In an interconnected world, the impacts of any transaction arise from

buyer-supplier relationship because of spillover effects or externalities.
Externalities are effects of transactions that happened to parties outside the
transactions of buyers and sellers. If the spillover effects enhance the welfare
of a third party, it is called positive externality or positive impact. But if the
third party’s welfare is reduced, the spillover effect is called negative
externality or negative impact.

Some examples of Positive Impact of Business to the Society

1. Sourcing raw materials from renewable resources
2. Sourcing labor services, technical professionals, and managers in huge
plantations and mining companies may opt to build communities within
their business complex that has educational, health, social, and cultural
religious facilities.
3. Construction of infrastructure like roads that have positive effect on the
neighbouring communities and where other business enterprise may
be encouraged to establish their presence nearby to cater the needs of
the of the community
4. The impact of the sales of firm of its outputs to other firms as
intermediate inputs and as capital goods. These repeated transactions
of constant sales contribute to the strengthening of the integration of
the economy.
5. Exporting its products to earn foreign exchange but these earnings
contribute to the accumulation of the country’s foreign reserves.

Some examples of Negative Impact of Business to the Society

1. Technology used in processing the raw materials can be energy
intensive that emits smoke, and produce air and water pollutants.
2. The extraction of mineral deposits, can lead to noise and water
pollution as well as soil erosion to the detriment of the neighbouring
communities. The disposal of wastes of these huge extractive
operations can threaten ecological balance as chemicals mixed with
water at warmer temperatures are disposed in rivers, bays, and seas.
3. Usage of plastic bags and polystyrene or styrofoam in wrapping
consumer goods can have adverse effects on the environment.
4. The intense advertising campaigns made by fast food companies can
alter the consumption habits of the young that can have undesirable
effects on their future health.
21
 5. The sale of additional cars can further aggravate the traffic congestion
in the cities. Jeepney drivers providing transport service daily to
millions of Filipino commuter expose an equal number of people to air
pollution.
From this discussion, we recognize that any business transaction will
have positive and negative spillover effects to other individuals, community,
and to the environment. Aside from this given reality, it is still most
important to manage these effects by enhancing the positive effects and
mitigating the negative effects.

Recommendations on Managing the Impacts of a Business Enterprise

1. There is a need to improve the productivity of firms’ workers.
2. Business enterprise should source their raw materials, labor, and capital
inputs from the community where they operate.
3. Use environment friendly alternatives in the production process and
distribution procedures.
4. Be socially responsible as commercial enterprises.
5. People should participate in the production of intermediate goods within
the country.
6. Enhance the productivity of the service sector.
7. Carry out measures to protect consumers.

22
 WHAT’S MORE

Directions: Check on the appropriate column whether it has a Positive or

Negative impact to the society.
Table 4.1
Checklist of Positive and Negative Impacts of a firms Activities
Positive Impacts Negative Impacts
Production Activity
Sourcing Intermediate Inputs
Sourcing Factor Inputs
Labor
Capital
Land
Managers

Distribution of Outputs
Consumption
Investment
Government Consumption
Exports

Spillover Effects
Community
National Economy
Society at large
Environment

23
 WHAT I HAVE LEARNED

Directions: Read the questions below and illustrate your answer in a box
and explain it briefly as possible on the spaces given.(10 points each logical
answer).

ILLUSTRATING IDEAS
Directions:
1. As Filipino youth, discuss the advantages and disadvantages of
establishing an industrial plant in your community.

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2. If you were a government official, what actions will you make to

minimize the negative impact of the businesses in our society?

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3. Based on your observation, how does international trading help the
socio-economic condition of our country?

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 ASSESSMENT

Multiple Choices: Encircle the letter that corresponds to the correct

answer.

1. The following are the impact of the businesses to the government,

EXCEPT,
A. Businesses conduct projects like tree planting, and housing
B. Employees hired by the businesses employ a household member
C. Tax are imposed on the income of the business
D. The benefit provided by businesses through payments of taxes

2. It is an effect of transactions that happened to parties outside the

transactions of buyers and sellers.
A. Externalities C. Internalities
B. Middle Management D. None of these

3. What do you called the spill over effects that enhance the welfare of a
third party?

A. Negative externality C. Both A and B

B. Positive externality D. None of these

4. If the third party’s welfare is reduced, what do you call the spillover
effect?

A. Negative externality C. Both A and B

B. Positive externality D. None of these

5. The following are the third parties that benefit the spillover effect of
the transactions of buyers and sellers, EXCEPT,
A. Capitalist C. Environment
B. Community D. Individuals

6. The following are examples of positive impact of business to the

society, EXCEPT,
A. Construction of infrastructure like roads that have positive effect on
the neighbouring communities and where other business enterprise
may be encouraged to establish their presence nearby to cater the
needs of the of the community

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 B. Sourcing labor services, technical professionals, and managers in
huge plantations and mining companies may opt to build
communities within their business complex that has educational,
health, social, and cultural religious facilities.

C. The impact of the sales of firm of its outputs to other firms as

intermediate inputs and as capital goods. These repeated
transactions of constant sales contribute to the strengthening of the
integration of the economy.

D. Using non-renewable raw materials like oil and minerals have high
environmental costs

7. What are the positive spillover effects of huge plantations and mining
companies?
A. Construction of infrastructure like roads
B. Other business enterprises may encourage to establish their
presence nearby to cater the needs of the community
C. Sourcing labor services, technical professionals and managers
D. All of the above
E. Only A & C

8. What would be the long term effect of protecting the environment

through the use of ecologically friendly technologies?
A. The firm can operate with a steady supply of raw materials for a
longer period
B. The fruits of our natural resources can be sustained for the next
generations to enjoy
C. A and B
D. None of these
9. A person who purchase goods and services for personal use.
A. Consumer B. Economics C. Income D. Supplier
10. Any person or other entity (such as a firm or mutual fund) who
commits capital with the expectation of receiving financial returns.
A. Consumer B. Income C. Investor D. Supplier

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11. An activity which makes one’s living or makes money by
manufacturing, developing, buying and selling products (goods &
services)?
A. Business B. Households C. Government D. Marketing
12. Classified as a social unit that has similarities regarding the
communities norms, religion, values and identity
A. Business B. Community C. Poverty D. Traders

13. The production of goods or related services within an economy.

A. Business B. Community C. Industry D. Locality

14. This refers to the exchange of goods and services between countries.
A. Exporting Goods C. International Trade
B. Importing Services D National Economic Trading
15. Provide permits, security, and protection policy to businesses in
exchange for taxes paid for the economy.
A. Community C. Government
B. Household D. Investors

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POST-TEST PRE-TEST
1. B 1. A
2. A 2. C
3. B 3. A
4. A 4. B
5. A 5. C
6. D 6. C
7. D 7. C
8. C 8. B
9. A 9. A
10. C 10. B
11. A 11. A
12. B 12. A
13. C 13. D
14. C 14. D
15. C 15. C
8.
ANSWER KEY