 Lesson 10

 Lesson 11

 Lesson 12

 Lesson 13

 Lesson 14
 Consumers often determines what kind of products and services are to be
produced. This information goes to the producer, and from this
information products and services are made.

 Consumer’s consumptions creates additional jobs. Companies that offer

Business Process Outsourcing or Information Technology Enable
Services (ITES) do things for other companies such as managing
payroll accounts, human resources, and providing customer service.
 Households bring economic
resources such as land, labor capital
and entrepreneurship to firms, and
these resources are used to make
goods and services. Households also supply which
includes manpower and skills. It is
also a source of “capital,” or in
Economics, the man-made factor of
production used to create another
product.
 Government Expenditures

Investment
Consumption

Land, Labor, Capital, Ent.

Households Firms Banks Government Rest of Household

Rent, Wages, Int. Profit

Delivery of Goods/Services

Savings

Taxes

Imports
First is the Utility Approach – it is guided by the
law of Diminishing Marginal Utility, which states
Second approach is the analysis of the Budget Line,
that as you consume a good or service given a
Indifference and getting the optimum combination.
particular period of time, you receive less and less
Given the substitute goods, the consumer gets both
marginal utility for each additional consumed.
equally provided that the prices and utilities of the
two are same.

Third is the Income and Substitution Effects.

Utility is the satisfaction or benefit received from
consuming a good or services.
Marginal utility is the change in the total utility
from increased consumption of that good or service.
Utility is measured in units called utils.
Income effect is the shift of the budget line to the
right, which indicates an increase in income or an
increased in purchasing. The substitution effect is
where one good – let’s say good x – experiences a
decrease in price, while that of good y remains
unchanged

Total utility (TU) is the summation of one’s

satisfaction
 Suppliers are
Raw Material Good sources of raw Final Goods are
are unprocessed goods
materials used processed and
used to produce other
in producing transformed goods
good/services.
goods. ready for use and
consumption.

Intermediate goods are semi-

processed goods used to produce other
goods.
Intermediate
Goods
Final Goods
Investors are entities that act as financial sources of businesses with the intention
of gaining profits. They lend money to business owners and expect these owners to
return the money with interest within a particular period.

Banks or similar financial institutions act like agents of said transactions. A

private entity saves or invests money in a bank, receiving interest from its
venture. The bank in turn uses this money as ready capital for business and
returns the money to circulate in the economy, to be used to different transactions,
also getting financial gains.
 Investment

Households Firms Banks

Savings

Investor’s Participation in Business

As a producer, a franchise holder and an exclusive
distributor, a firm can manipulate its suppliers because the
supplier’s profit is dependent on the firm’s output. If a firm
is too small, then it would also mean that the supplier’s
profit is limited. Furthermore, the investor’s venture is also
limited in terms of interest earnings
 An exclusive distributor is a sole
local entity representing the main
suppler of a service or a good.
 It is also a supplier who undergoes
a selection process by the main
supplier or the source,
What is Government?

 It is an instrument which can help people achieve their

aspirations in life.

 It is created by the people so that they may enjoy their basic

needs such as food, shelter, housing, education, peace and
order, justice, economic development, infrastructure,
transportation, communication, national defense and such other
necessities which will enable them to have a satisfactory life
and bright future for themselves and their succeeding
generations
 The Government’s primary duty is to provide basic social
services to its citizens such as health services, free
education, and security.

Thus, the constitution mandates that the government

collect fees from individuals, businesses, and the like –
taxation.
 Governments Role in the Economy

Government
Expenditure

Households Firms Government

Taxes
 These are inflows, which in turn are brought back to the economy as
government expenditures.

 The flow is a cyclical process where the participants benefit by giving

and receiving something to and from the company.

 Taxes are seen as inflows for government, and government

expenditures are outflows to support basic needs.

 The purpose of taxation is primarily to raise revenues from all

possible sources in order to support governmental expenditures and
services, and to promote the general well-being and safety of its
citizens.

 Taxation is also designed to equitably distribute wealth to the

citizens of the country, and to uplift social conditions or to protect
new industries.
1. Taxes on Net Income and Profit
2. Excise Taxes
3. Value Added Tax
4. Other Percentage Taxes
5. Other Taxes
 In a mixed-market economic system where resources are owned by
the government and private entities, public services are supposed to be
maintained and fulfilled by the government. However, the government
does not always have the financial capacity to maintain such services.
One option is to enlist the help of private entities in fulfilling said
services.

Public-Private Partnership or PPP’s are government projects funded

and operated by private firms or entities.
1. As a source of tax revenue
A mentioned earlier, the government collects taxes
from households and firms to fund public services. This ensures the
harmonious relationship between government and businesses.

2. Poverty Alleviation
It is the method or model by which society seeks to
address poverty, such as providing free education, health care among
others. This seeks to improve the lives of the poor, who today comprise
around 26% of the entire population.

3. Provisions of Services
This term refers to the amount of services provided
by the government.
  It is an organized way for countries to conduct business and
trade activities with each other.

 The role of International Trade in the economy is to widen existing

markets and to apply both comparative and absolute advantages.

 It allows industries to reach economics of scale.

 Comparative Advantages

is an economic concept in which an economic actor can produce a certain good or

service at a lower opportunity cost than other actors.

 Minimum Efficient Plant Size

the point at which economies of scale are achieved.

 Firms achieve economies of scale when they are able to increase their production output, yet

keep their input cost at a minimum, thereby decreasing per-unit production costs.
 According to the study “Local Impacts in International trade,” businesses’ impact would be
structural changes and technical innovation.

Structural changes refer to the transformation of the agricultural sector as the stimulus of
growth to development of the industrial sector. This can be seen mostly in developing nations
which start as an agricultural base then gradually change into economies that manufacture
goods and services.

Impact of technological progress in international trade can be seen in big companies

fighting it out in giving the best gadgets and technological merchandises money can offer.
This is the impact of emerging market like our country.
 What is Socioeconomic Impact Study?

 It is a type of systematic analysis used to identify and evaluate the potential

effects a proposed development may have on the social and economic aspects of
the lives of the members of a community.

 Systematic analysis may involve demographics, households, labor and

employment, the market and government services.

Demographics is the study of the quantifiable characteristics of a

population such as age, gender, work experience, educational attainment, income
and other related variables.
  Is the field of the study which examines how economic activity and social
processes affect each other.

 Examine proposed developments or official state programs and policies.

 Predict what their effects would likely be.

 See whether or not they might have adverse consequences.

 Evaluate whether or not they are the appropriate courses of action to take to
uplift the socioeconomic well-being of the community in question.
1. The problem statement should seek to address known problems (issues on poverty, illegal
drugs, unemployment, economic growth, health, education, environmental degradation,
among others.

2. The researcher must gather as much related literature on the topic as possible (journals,
books, theses an online sources.

3. The study should ne within the boundaries with socioeconomic issues with a solid
theoretical framework that could explain the phenomena.

4. There should be identified independent and dependent variables.

5. The study’s scope should be neither too broad such that its objectives can no longer be
achieved; nor should its limitations be too narrow such that it is no longer viable.
6. The study should be able to aid researchers, government and public sectors, business sectors, economic
planners, and the academic community.

7. A questionnaire, shall be used as the source of primary data.

8. By using the questionnaire, the course facilitator do the final draft. The initial draft shall be done by the
students.

9. Research design is descriptive to introduce the concept of socioeconomic impact study.

10. Data Gathered shall either be nominal; interval, ordinal or ratio.

Nominal data – are those that assign labels like gender, region and barangay.

Ordinal Data - represent the order of values (e.g. excellent is 5, very good is 4, good is 3, and so on.)

Interval Scale – with exact numeric representation or distance (like miles per hour)

Ratio Scale – give the order and interval values of data, and also have a true zero, which means that

these variables can be meaning fully added, subtracted, multiplied or divided.