Quarter 1 - Module 6: Applied Economics

Ivan Christopher B.
Llamson 12 ABM-A 01/28/22
APPLIED ECONOMICS
QUARTER 1 – MODULE 6
EFFECTS OF CONTEMPORARY ECONOMIC ISSUES AFFECTING FILIPINO
ENTREPRENEUR
WHAT I KNOW
In this part of the module, the teacher would like to know the idea of the learner
about the lesson. If your score is 15 points, you can skip the lesson but if you got 14 points
and below, continue answering the module.
A 1. What do you call to the payment for the use of land?
a. rent
b. spending
c. income
d. capital
C 2. It refers to income less spending.
a. taxes
b. capital
c. savings
d. investments
B 3. It is building up the capital stock for more future production and
consumption.
a. interest rate
b. investments
c. income
d. capital
D 4. It can be classified as machineries, equipment, buildings and
construction.
a. spending
b. savings
c. capital
d. assets
A 5. It refers to the lowest wage permitted by law below which if paid by
employer will subject him to penalty from the government.
a. minimum wage
b. maximum salary
c. maximum wage
d. minimum salary
C 6 Payment for public goods and services by citizens
a. savings
b. debt
c. tax
d. capital
B 7. It is consumed to fuel day to day expenditures.
a. debt
b. spending
c. capital
d. investments
B 8. It is the rate of conversion of the Philippine peso to a foreign currency

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such as the US dollar.
a. foreign dollar exchange rate
b. foreign exchange rate
c. domestic peso exchange rate
d. domestic exchange rate
C 9. It is the amount of interest due per period, as a proportion of the amount
lent, deposited or borrowed.
a. investment rate
b. accrued interest
c. interest rate
d. compound interest
C 10 A person who takes the risks that is necessary to seek new business
. opportunities and develop new ways of doing things.
a. inventor
b. scientist
c. entrepreneur
d. government
D 11 It is the lifeblood of the economy.
. a. borrowings
b. investments
c. savings
d. tax
A 12 Are Filipino entrepreneurs affected by the widespread of COVID-19?
. a. yes
b. no
c. I’m not sure
d. none of the above
A 13 As a Filipino entrepreneur, why is it important to consider the tax rate of
. the company?
a. Because every single centavo given to tax means additional
burden on the part of the entrepreneur
b. Because it is an obligation of the entrepreneur to pay tax.
c. Because the tax rate in the Philippines is low compared to other
countries.
d. Because the products in the Philippines is tax-free.
A 14 What agency of the government is authorized to check if the employer
. follows the rules and regulations in setting up minimum wage in his
company?
a. DOLE
b. BIR
c. DTI
d. DENR
A 15 What will happen if there are influxes of investment in the country?
. a. It will create jobs.
b. It will result to colonial mentality.
c. More foreigners in the country.
d. Foreigners will invade the country.
WHAT’S IN
Before we start the next lesson, let us recall the types of market structures and give
their characteristics.
TYPES OF
TYPES OF MARKET
MARKET
STRUCTURES
STRUCTURE
STRUCTURES
STRUCTURE
Perfect Monopolistic
Oligopoly Monopoly
large number of large number of relatively scarce has sole seller and
buyers and sellers buyers and sellers small number of many buyers
freedom of entry freedom of entry firms, but always
and exit and exit more than one produces
produce an identical perfect information strategies between homogenous
or homogenous firms produce firms are products
product differentiated interdependent
firms are price products there are barriers to no close substitutes
takers, therefore the firms have price entry and barriers to long-
firm’s demand curve inelastic demand; produce run resource
is perfectly elastic they are price homogenous mobility
buyers and sellers makers because the products give the monopolist
want to maximize good is highly businesses in the the ability to set
profit differentiated market can earn prices with the only
there is perfect firms make normal super profits in the limitation of
information and profits in the long long run consumers’
knowledge run but could make willingness to pay
perfect factor supernormal profits seller is a price-
mobility in the short term maker and
no government firms are allocatively consumers will be
intervention and productively price-takers
no costs associated inefficient
with transportation
Number of
Firms?
Type of Products?
Many Firms
Few
One Firm
Firms
Differentiated Identical
Products Products
MONOPOLISTIC
MONOPOLISTIC PERFECT
PERFECT
MONOPOLY
MONOPOLY OLIGOPOLY
OLIGOPOLY COMPETITION
COMPETITION COMPETITION
COMPETITION
WHAT’S NEW
WHAT’S NEW
From the previous lesson, the importance of knowing the characteristics of market
structure is very important. As a newbie in business, you were looking for profitable
market, where you will invest your resources. Having resources cannot guarantee an
entrepreneur that it will be a big success. In this activity, answer the following questions
about the picture presented.
1. What can you say about the picture?

 The picture shows four words circling a light bulb with a word “entrepreneur”
inside it. The words circling the light bulb are investments, interest rates,
rentals, and minimum wage and these are the contemporary economic issues
that an entrepreneur faces.
2. Define each word from the above picture.
 Entrepreneur – a person who undertakes the risk of starting a business
venture. He creates a firm to realize their idea, known as entrepreneurship,
which aggregates capital and labor in order to produce goods or services for
profit. He is commonly seen as an innovator, a source of new ideas, goods,
services, and business/or procedures.
 Investments – an asset or item acquired with the goal of generating income or
appreciation. It involves putting capital to use today in order to increase its
value over time. It requires putting capital to work, in the form of time, effort,
etc., in the hopes of greater payoff in the future than what was originally put in.
It can refer to any medium or mechanism used for generating future income,
including bonds, stocks, real estate property, or a business, among other
examples.
 Interest Rates – is the amount a lender charges a borrower for the use of
assets and is a percentage of the principal – the amount loaned. An interest rate
also applies to the amount earned at a bank or credit union from a deposit
account.
 Rentals – the sum or amount agreed in the lease or tenancy agreement to be
paid by the tenant to the landlord for exclusive possession of the property
leased for the period of the lease
 Minimum Wage – is the lowest wage per hour that a worker may be paid, as
mandated by law. It is a legally mandated price floor on hourly wages below
which nonexempt workers may not be offered or accept a job.
3. How can you relate the words to the picture?
 The words investments, rentals, interest rates, and minimum wage are
contemporary economic issues affecting entrepreneurs. These words are all
essential as these are crucial factors in determining the fate of entrepreneurs as
they venture into the world of business. Each of those words need to be
considered very well by the entrepreneurs for them to succeed.
ACTIVITY 1: Thumbs Up! Thumbs Down!
Directions: Read each statement very carefully. Write the word Thumbs Up if you agree
with the statement, and Thumbs Down if you disagree with the statement. Write your
answer on the space provided before the number.
THUMBS UP 1 Low rental fees mean more businesses will be created.
.
THUMBS 2 High interest in external borrowings attracts potential investors.
DOWN .
THUMBS UP 3 Increase in minimum wage will increase the buying power of
. workers.
THUMBS UP 4 High tax rates mean less investors.
.
THUMBS UP 5 Entrepreneurs always consider the following when making
. business decisions: rental fees, tax rates, minimum wage rate,
amount of investment and the interest rate.
ACTIVITY 2: Matching Type!
Directions: Match column A with column B. Write the letter of your choice before the
number.
COLUMN A COLUMN B
E 1. Rent A.
B 2. Minimum wage
D 3. Tax
C 4. Investments
A 5. Investment rate B.
C.
D.
E.
ACTIVITY 2: Yes or No
Directions: Check the box of the correct answer.

YES NO
1. Wage refers to income received by professionals like

teachers, doctors, lawyers, and nurses.

2. Loans and borrowings bear interest. 

3. DOLE is a government agency authorized to review and
regulate minimum wage in the country.

4. Lease is the other term used for capital. 
5. Capital and fixed assets are examples of investment. 
WHAT I HAVE LEARNED
Write all your learnings about the lesson. (Minimum of 3 and maximum of 5
sentences)
In this module, I have learned that investment and interest rates, rentals, minimum
wage, and taxes are the various contemporary economic issues that an entrepreneur
faces. I have learned that investment is the building up the capital stock for more future
production and consumption, while the interest rate is the amount of interest due per
period, as a proportion of the amount lent, deposited, or borrowed. Meanwhile, I have also
learned that entrepreneurs rent a property, especially if they do not own land or space to
be used for their business, and I have also learned that the rent in urban areas is higher in
rural areas. Moreover, I have learned that minimum wage is the lowest wage permitted by
law and it is regulated by the Department of Labor and Employment. Lastly, I have learned
that tax is the lifeblood of the economy and that it fuels the social services provided by
the government to its citizen.
WHAT I CAN DO
In this part of the module, the teacher would like to know how you can apply the
lesson in real life situation. On one whole sheet of paper, discuss how you can help the
newly set-up businesses in your community in coping up with the pandemic (COVID-19).
The onslaught of the pandemic has devastated almost all the newly set-up
businesses here in our community. Some have resorted to permanently shutting down,
while others remain steadfast and committed to their endeavors. But the weight of the
boulder they carry is still incomparable. Struggling every day to promote their business to
find customers is no joke at all. But we, consumers, can also do something to lighten the
burden that they carry. That is, to support them. Support local. Buy local. Promote local.
There is nothing else we can do but to show our sincere and genuine efforts in extending
our help to these newly built businesses by affording their service or buying their
products. By extension, we can also promote them to our peers by sharing their
businesses to our social media accounts and persuading our friends and followers to
support local, especially in this crisis. In doing so, we are helping these businesses to have
more customers, and this will ultimately result in a boost in their profit and sales. This
positive consequence will shield them from the possibility of permanently closing.
We can see from here that with our small yet collective efforts of promoting local,
we can help the newly established businesses in our community cope and thrive even
amid a pandemic.
ASSESSMENT
Directions: Write the word True is the statement is correct and False if the statement is
incorrect. Write you answer in the space provided before the number.
TRUE 1. Low interest rates on borrowings tend to attract more investors.
FALSE 2. It is advisable to rent a big space for a new business with limited
capital.
FALSE 3. Setting up minimum wage is solely regulated by the
company/employer.
TRUE 4. Good infrastructures attract investors.
FALSE 5. Electricity facility is an example of investment.
FALSE 6. High interest rates mean more investors.
TRUE 7. Tax is the lifeblood of the economy.
FALSE 8. Social services provided by the government to its citizens come
from investments.
TRUE 9. High taxes tend to lessen investment.
FALSE 10 Tax holiday is given to new investors to attract more investments.
.
FALSE 11 If the interest rate is low, the value of dollar tends to increase.
.
TRUE 12 If the interest rate is high, the value of Peso tends to decrease.
.
TRUE 13 High tax rates lead to less job creation.
.
FALSE 14 Minimum wage results in the increase of unemployment.
.
15 Interest rate – investments; tax evasion – tax.
FALSE
.
ADDITIONAL ACTIVITIES
In this part, the teacher provides another activity to enrich the knowledge or skill of
the learner about the lesson.
How has COVID-19 affected the Filipino entrepreneurs especially the newbies in the
business?
Young entrepreneurs had faced a lot of hardships and difficulties when the cases of
COVID-19 started to propagate in the country. When President Duterte announced the
executive order for enhanced community quarantine, government offices, establishments,
and institutions were temporarily closed. In addition, public transportation was halted, and
individuals were refrained from going outdoors. These changes in the society’s set-up also
brought tremendous change to the set-ups of the business establishments especially
those who are newbies in business.
According to a study by Youth Co:Lab, 86% of young entrepreneurs reported that
coronavirus has negatively impacted their business. Among these, 1 in 4 stopped entirely,
and 1 in 3 reported a major slowdown. Of the young entrepreneurs who have reported
that COVID has negatively impacted their business, 9 in 10 have experienced reduced
customer demand and 1 in 4 reported an experience in distribution disruption.
Moreover, the study also showed that 35% of newbies in the business have had to
reduce staff hours, 25% have had to cancel orders from suppliers and have had to
postpone investments, and 24% have had to reduce wages. An enterprise here in our
country even cited that they had to lay off most of their 20 staff as all of their packages
had been canceled, and their then future guests had requested deposit refunds.
Further, only 9.5% of those who are newbies in the industry reported that their
business has received a tax break, loan, grant, subsidy, or other forms of support. The
study also showed that 9 in 10 young entrepreneurs reported a decline in financial
turnover, and 2 in 5 of them had to borrow or reach into savings.
With these figures describing the negative impact of COVID-19 on Filipino
entrepreneurs, it is a saddening moment to see this harsh situation. However, the
brilliance of most of them has made them stay in the business industry as they were
innovative and creative enough to think of possible solutions to combat their own business
predicaments.
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Ivan Christopher B.

Llamson 12 ABM-A 01/28/22

B 8. It is the rate of conversion of the Philippine peso to a foreign currency

1. What can you say about the picture?

ACTIVITY 2: Matching Type!

Directions: Check the box of the correct answer.

1. Wage refers to income received by professionals like

2. Loans and borrowings bear interest. 

4. Lease is the other term used for capital. 

5. Capital and fixed assets are examples of investment. 

WHAT I HAVE LEARNED

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