Applied Economics: Quarter 2 - Module 9: Effects of The Various Socio-Economic Factors Affecting Business and Industry
Applied Economics: Quarter 2 - Module 9: Effects of The Various Socio-Economic Factors Affecting Business and Industry
Applied Economics: Quarter 2 - Module 9: Effects of The Various Socio-Economic Factors Affecting Business and Industry
Quarter 2 – Module 9:
Effects of the Various Socio-
Economic
Factors Affecting Business and
Industry
(Week 10)
What I Need to Know
This module was designed and written with you in mind. It is here to help you
explain the effects of the various socio-economic factors affecting business and
industry.
What I Know
Choose the letter of the best answer. Write your answer on a separate
sheet of paper.
1. Spending and saving are mutually exclusive which means that if income is
fixed, any change in household’s savings will inversely affect
.
a. Inventing c. Producing
b. Spending d. Buying
2. Changes in tax rates can clearly affect net income thus affect household
_.
a. Investing c. Borrowing
b. Producing d. Spending
3. Businesses need the support of this industry to provide the tools needed to
produce goods/services.
a. Consumer c. Supplier
b. Entrepreneur d. Income
4. A successful business influences the behavior of _ _.
a. Capital c. Consumers
b. Supplier d. Entrepreneur
5. A rise in interest rates stimulate less spending, more .
a. Spending c. Exploring Business
b. Business Transaction d. Savings
6. Distributor of goods and services needed in the operation of the business.
a. Entrepreneur c. Consumer
b. Supplier d. None of the above
7. The unemployed spend less because of _ .
a. Lower personal income c. High income
b. No income d. None of the above
8. Example of web – based business is an _ .
a. e – Commerce c. Exporting
b. Hotel and Restaurant d. Importing
9. A increase in spending means _.
a. More income c. Personal wealth
b. Economic growth d. All of the above
10.When consumers are likely to respond to promotional advertisements that
connect to their feeling to influence them, then the business
.
a. Encourage customers to look for value
b. Influence consumers emotionally
c. Offer social responsibility
d. Change behavior with customer service
11.When consumers are likely to be influence to switch on your product when it
meets their expectations and get higher value.
a. Encourage customers to look for value
b. Influence consumers emotionally
c. Offer social responsibility
d. Change behavior with customer service
12.When consumers are likely to patronize your products and services when
business contribute to the community by being socially active such as
scholarship and tree planting.
a. Encourage customers to look for value
b. Influence consumers emotionally
c. Offer social responsibility
d. Change behavior with customer service
13.When business let customers feel that they are important and give an
excellent service then the business can _ _.
a. Encourage customers to look for value
b. Influence consumers emotionally
c. Offer social responsibility
d. Change behavior with customer service
14.Below are list that company take into account in choosing the right supplier.
Which of the following does not belong to the group?
a. Quality of products/services provided c. Reliability of Service
b. Customer preference d. Supplier's Reputation
15.Which of the following is not a determinant of spending?
a. Expectations c. Interest Rates
b. Rates of Income Tax d. The Level of Production
Less
on Explain the Effects of the
1
Various Socio-Economic
Factors Affecting Business
and Industry
What’s In
1. CONSUMER 6.
SOCIO ECONOMIC
2. BEHAVIOR
7. INVESTORS
3. SAVINGS
8. SPENDING
4. HOUSEHOLDS
9. INTEREST
5. SUPPLIERS
10. TAXES
R E C D I T I S R O S G N I V A S C E S M C
G N P O M E D S E G A T R O H S S H S E I I
S T N A N K M A C R O E C I N I M H C S X M
K A P L E S C O M M A N D N I M P O R T S O
E D A M C A U I T A L T R T D E O U F L D N
L A B O R M S M A R C I T E V I R S S E R O
G M I C R O E C E N T A X R S C O E I D O C
P I H S R I E N E R P E R E N E C H G S I E
P O S I L I V E E C O N O S I C S O D E V O
N O R P A T I V E E C O N T M I C L P O A I
G D S P E N D I N G E V I T A L E D O O H C
A U S O L U T E S S R O T S E V N I N E E O
S P S U P P L I E R S C O S T R A H I N B S
What’s New
To understand more about the socio economic factors affecting business and
industry, Let us read first a part of an article written by Manny Ayala of Rappler
dated April 20,2020.
Entrepreneurs turn up
It is classic entrepreneurial stuff – see a problem and figure out how to solve it, whether or
not you have the resources to do it. Linda Rottenberg, the founder of the non-profit
Endeavor, has a great line that describes the situation neatly: “When economies turn
down, entrepreneurs turn up.”
Mind you, these entrepreneurs have all been walloped as hard as the rest. As I write, most
are going through unprecedented declines in their business and are scrambling to conserve
cash, reduce expenses and pivot the business to be ready for the inevitable recovery from
this pandemic.
But in the middle of this chaos, they have also been moved to do something concrete to
help the country.
Entrepreneurs are defined by how they respond to a crisis, which as the Chinese word for
crisis suggests is the co-existence of danger and opportunity. The great ones are those who
find opportunity in the face of danger. The great ones do right by all the stakeholders they
serve: employees, customers, shareholders, suppliers and the communities they operate in.
The great ones rise to the occasion when the moment demands it of them.
In the words of the Count of Monte Cristo – a man who lost everything then gained it back:
“Life is a storm, my young friend. You will bask in the sunlight one moment, be shattered on
the rocks the next. What makes you a man is what you do when that storm comes.”
Below is a list of some of the noteworthy initiatives I have seen in the little Endeavor
community in the Philippines. In the middle of a storm, this is how entrepreneurs rise to the
occasion.
Abetina Valenzuela (Equilife Medical)
Abetina is the founder of Equilife Medical, a company that provides medical services and
equipment to ICUs in hospitals in the Philippines. When COVID-19 started to escalate, Abet
and her team scrambled to get all the critical care equipment at their disposal - such
as ventilators - to the hospitals that needed them most. As with all hospitals they have
stepped up their efforts to send their nurses, respiratory therapists and engineers into the
frontline, at ng theigreat personal risk to themselves.
Paul is the co-founder and CEO of Kalibrr, a technology company that aims to transform
how candidates find jobs and how companies hire talent. Currently, his team is partnering
with bld.ai, a technology company founded by Danny Castonguay. The COVID Sentinel
mission is to detect, manage, and defeat pandemics. The sentinel surveillance
system not only aggregates high quality data from public sources, but also collects
targeted data from sources such as sewage testing and patient symptoms tracker apps. This
intelligence is put in the hands of doctors for tactical solutions and researchers for systemic
interventions.
After reading the article, you now have an initial idea about the lesson. But before
we begin the lesson, answer the following:
1. What type of products/services was created during the pandemic?
2. In your opinion, what are the social and economic factors that the business
owners considered in creating their business?
What’s New
This lesson will focus on various socio economic impacts on the following sectors
such as consumers, suppliers and households.
How do Socioeconomic Factors Affect Businesses?
Understanding the socio economic factors affecting business will help you make
better decisions about the future and direction of your business. To have an
intimate understanding, however, you will have to understand both external and
environmental factors, as well as how their interplay affects your business.
Socioeconomic factors are, therefore, the social and economic factors that shape
and determine the dynamics a society will experience. These are the factors that
affect
the behavior of a particular group, also known as socioeconomic class. Perhaps the
most interesting behavior of member of a socioeconomic class is their behavior as
consumers. Different socioeconomic classes will generally have different priorities,
and this will affect how they spent their money.
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. Your message emphasizes the higher value consumers
get when they solve their problem using your products. The key is to make sure
your products meet the expectations of consumers.
3. Offer Social Responsibility
The level of service customers experience when dealing with your company can
have a profound effect on customer behavior. Customers who experience bad
service will not buy from your company again, and are more likely to share their
negative experiences with friends and online. Your customer service goal must be
to deliver flawless service every time a customer interacts with your business.
The effects on customer behavior result in a positive reputation for your company
and increased sales over the long term.
Factors that Impact Business and Consumer Confidence
With policymakers in the major economics working hard to restore and maintain
confidence levels and shifts in sentiment indicators playing a key role in risk
assessments of investors, it is worthwhile to consider the various influences on this
qualitative economic measure.
Several common factors that have the potential to cause marked shifts in sentiment
includes the following:
1. Changes in interest rates and/ or exchange rates, particularly if they are
rapid, large and unexpected;
2. Swings in the business cycle and associated movements in employment/
unemployment levels and business investment intentions;
3. Shifts in the relative prices of nondiscretionary goods and services, notably
petrol, healthcare, education and utilities prices;
4. Announced policy shifts in the stance of government fiscal policy including
large structural spending cuts or increases/ decreases in taxation rates.
Example: Does it have good cash flow and strong balance sheet?
5. Size of the Supplier and its other Customers.
Spending and saving are mutually exclusive, which means that if income is
fixed, any change in household’s savings will inversely affect spending. Many
of determinants of consumption have an inverse effect on saving.
3. Expectations
If households are confident, and have positive expectations about the future,
current spending can rise. This can lead to economic growth, and re –
enforce the positive expectations.
4. Unemployment
Changes in tax can clearly affect disposable, post – tax income, and hence
affect household spending.
6. Interest Rates
By altering the level of saving – a rise in interest rates will stimulate more
saving, and less spending.
By altering the cost of funding existing debts such as mortgages and bank
loans. For example, a rise in interest rates will divert household funds
towards the higher loan payments and away from general spending.
By altering the cost of new credit, and thus encouraging or discouraging
household borrowing. For example, a rise in interest rates will deter new
borrows, who may postpone borrowing until rate fall back.
By altering expectations and confidence. For example, rising interest rates
will subdue confidence and create a ‘wait and see’ attitude by households,
who may postpone certain spending until expectations improve.
What’s More
Activity 1. Below are logos of companies that are well known in the
Philippines. I want you to choose two (2) companies of your preference and answer
the question: As a consumer, what are the different factors that will make you buy
their products or services? Write your answer in a separate sheet of paper.
10 PT. RUBRIC 10 points- comprehensive and analytical 8-9 points- well written
and some includes analysis; 5-7 points-well written but lacks analysis; 2-4
points- weak essay; 1 point Poorly written and lack strength
Activity 2. Fill Me In
Instruction: This activity is called “FILL ME IN”. Your task now is to classify the
given descriptions inside the box to which they necessarily belong. You may
indicate your answers by writing on the space provided.
_ SOCIO
_ ECONOMIC
IMPACT ON
_ BUSINESS
What I Have Learned
Now, after discussing the lesson. I want you to answer the enumeration to
test your understanding about the lesson.
Enumeration. (10 pts/ 2 pts. each) Rubrics: (Focus-1 pt; organization-
1pt.)
What are the factors that will lead the household to spend his/her money.
Write five (5) factors and explain each in the space provided below.
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.
ESSAY:
If you are a consultant in a business and the owners ask you recommend a
supplier. What kind of supplier will you recommend and why?
5 PT. RUBRIC
5 points Comprehensive and analytical
4 points Well written and some includes analysis
Well written but lacks analysis
3 points
Weak essay
2 points
Poorly written and lack strength
1 point
Assessment
Choose the letter of the best answer. Write your answer on a separate sheet
of paper.
Directions. Below are some products of the well known industries in the
Philippines and to assess what you have learned match the materials
needed to produce the given products. Draw a line to match Column A
and Column B.
Column A. Column B.
1. Jollibee Chicken Joy A. tea, milk, pearl
2. Goldilocks cake B. chicken, spices
3. Selecta Chocolate Ice Cream C. milk, chocolate, freezer
4. Infinitea Milktea D. banana, tomatoes
5. Del Monte catsup E. flour, eggs, butter