LEARNING ACTIVITY SHEETS – Applied Economics

WORKSHEET No. 1 QUARTER: Second Sem – Finals

NAME: Lalicon, Jamie D. DATE: 03/20/2021

GRADE & SECTION: 12 – ABM1 TEACHER: Mr. Mendoza

LEARNING ACTIVITIES

A. Define the following: (2 points each)

1. Agribusiness

- an industry engaged in the producing operations of a farm, the

manufacture and distribution of farm equipment and supplies,
and the processing, storage, and distribution of farm
commodities.

2. Bargaining Power of Costumers

- one of the forces in Porter’s Five Forces Industry Analysis

framework, refers to the pressure that customers/consumers can
put on businesses to get them to provide higher quality products,
better customer service, and/or lower prices.

3. Bargaining Power of Suppliers

- one of the forces in Porter’s Five Forces Industry Analysis

Framework, is the mirror image of the bargaining power of buyers
and refers to the pressure that suppliers can put on companies by
raising their prices, lowering their quality, or reducing the
availability of their products.

4. Barriers to Entry

- is an economics and business term describing factors that can

prevent or impede newcomers into a market or industry sector,
and so limit competition.

5. Demographic Changes

- Demographic changes are the dynamics in the quantifiable

statistics of a given population. Demography seeks to understand
population changes by investigating such demographic
components as gender, age, ethnicity, home ownership, mobility,
 disabilities, language knowledge, employment status and
location.

6. Environmental Scanning

- is a constant and careful analysis of the internal and external

environment of an organization in order to detect opportunities,
threats, trends, important lessons, and weaknesses which can
impact the current and future strategies of the organization.

7. Marginal Cost

- is the additional cost incurred for the production of an additional

unit of output.

8. Marginal Revenue

- Marginal revenue is an economic metric defined as the increase

in a company’s gross revenue from selling one additional unit of
its product.

9. Market Concentration

- Market concentration is used when smaller firms account for large

percentage of the total market. It measures the extent of
domination of sales by one or more firms in a particular market.

10. Market Power

- Market power refers to a company's relative ability to manipulate

the price of an item in the marketplace by manipulating the level
of supply, demand or both.

11. Monopoly

- In economics, a monopoly is a single seller.

12. Monopolistic Competition

- Monopolistic competition is a type of market structure where

many companies are present in an industry, and they produce
similar but differentiated products.

13. Oligopoly
 - is a market structure with a small number of firms, none of which
can keep the others from having significant influence.

14. Perfect Competition

- describes a market structure where competition is at its greatest

possible level.

15. Porter’s Five Forces of Competitive Position

- a framework for analyzing a company's competitive environment.

The number and power of a company's competitive rivals,
potential new market entrants, suppliers, customers, and
substitute products influence a company's profitability.

16. Profit Maximization

- In economics, profit maximization is the process by which a firm

determines the price and output level that returns the greatest
profit.

17. Total Revenue

- The total amount of a company's sales and other sources of

income. It is important to note that revenue is distinct from
earnings or profits, which takes expenses into account.

B. Check Your Understanding (3 points each)

1. Explain why a sizable market power of a company leads to higher profit?

What are the factors that can enhance a company’s market power?

- Significant market power occurs when prices exceed marginal

cost and long run average cost, so the firm makes economic
profit. ... Highly concentrated markets maybe contestable if there
are no barriers to entry or exit, limiting the incumbent firm's ability
to raise its price above competitive levels.

2. Using Porter’s competitive forces, explain which force pressured the

displacement of Nokia as the leading cell phone producers during the
first decade of twenty – first century?
 - The Abaca is a vital crop to the Philippine economy in a big
way. In fact, it is vital to the world’s economy and environmental
care as well. Despite the very bright prospects, the Philippine
abaca—who once dominated the global fiber world in the early
1900s to 1970s—found itself stalled from stiff competition waged
by Ecuador for raw materials and China for abaca-based
products.
-
3. Explain how monopolistic power of a sole buyer can dampen the
profitability of a firm?

- A buyer's monopoly is able to use its market power to capture

additional profits for its owners. Achieving and maintaining a
monopsony offers an opportunity for a powerful competitive
advantage to the buyer.

4. In the early part of the twentieth century, one of the major exports of the
Philippines was abaca rope. Using Porter’s competitive forces, explain the
reasons for the deterioration of abaca as a major export earner of the
country.

- The Abaca is a vital crop to the Philippine economy in a big

way. In fact, it is vital to the world’s economy and environmental
care as well.
5. What is the importance of knowing government regulations in your
business enterprise?

- A balanced relationship between the government and businesses

is required for the welfare of the economy and the nation. The
government most often directly influences organizations by
establishing regulations, laws, and rules that dictate what
organizations can and cannot do. To implement legislation, the
government generally creates special agencies to monitor and
control certain aspects of business activity.

6. What is the significance of an increasing number of families receiving

remittances on the profitability of restaurants?

- Remittances are believed to reduce poverty, as it is the poor who

migrate and send back remittances. It is sometimes argued that
remittances may increase inequality, because it is the rich who
can migrate and send back remittances, making recipients even
richer.
7. What is the impact of aging societies like Japan and some European
countries on the demand for health services?

- Because of such increases in their aging populations, some of the

world’s largest economies have started facing subsequent
increases in their health-care costs, higher pension costs, and a
decreasing proportion of their respective citizenries active in the
workforce. In order to adapt to their increasingly aging
populations, many countries have raised the retirement age,
reduced pension benefits, and have started spending more on
elderly care.

8. Using the environment scanning, rank the importance of the factors that
can affect the profitability of our electronics exports.

- Identification of strength
- Identification of weakness
- Identification of opportunities
- Identification of threat
- Optimum use of resources
- Survival and growth
- To plan long-term business strategy
- Environmental scanning aids decision-making

9. In SWOT analysis, what are the similarities and differences between

strengths and opportunities? What are the similarities between
weaknesses and threats?

- Strengths are things that your organization does particularly well,

or in a way that distinguishes you from your competitors. While
Opportunities are openings or chances for something positive to
happen. They usually arise from situations outside your
organization, and require an eye to what might happen in the
future.
- Weaknesses, like strengths, are inherent features of your
organization, so focus on your people, resources, systems, and
procedures. Think about what you could improve, and the sorts of
practices you should avoid. While Threats include anything that
can negatively affect your business from the outside, such as
supply chain problems, shifts in market requirements, or a shortage
of recruits.

10. Why is profit so high in a monopolistic firm compared with a competitive

firm?
- Because in a monopolistic market, firms are price makers because
they control the prices of goods and services. In this type of
market, prices are generally high for goods and services because
firms have total control of the market. While in a market that
experiences perfect competition, prices are dictated by supply
and demand. Firms in a perfectly competitive market are all price
takers because no one firm has enough market control.