Economics

• Entrepreneurship


  Process of identifying, creating, and pursuing opportunities to DEVELOP and MANAGE innovative business ventures
• Entrepreneur


  Capacity and willingness to develop, organize, and manage a business venture along with any of its risks in order to make a profit
• Entrepreneurs come from all types of backgrounds and create all kinds of businesses
• Entrepreneurs

  • Try to identify the needs of the marketplace and to meet those needs by supplying a product/service
  • Their business flourishes and all profits goes to them
  • Their companies decline and they may have to go out of business
• 3 Definitions of an Entrepreneur

  • Economist
  • Psychologist
  • Businessman
• Entrepreneur

  One who bring resources, labor, materials, & other assets into combinations that make their value greater than before
• Entrepreneur

  One who introduces change, innovations, and a new order
• Entrepreneurs

  • Driven by the need to obtain or attain something, to experiment, accomplish, or escape the authority of others
  • May appear as a threat, an aggressive competitor, or an ally, source of supply, customer
  • Someone who creates wealth for others
  • Find better ways to utilize resources, reduce waste, and produce jobs that others are glad to get
• Entrepreneurship

  Kind of behavior that includes initiative taking, organizing, and recognizing social and economical mechanisms to turn resources and situations to practical account, and the acceptance of risk and failure
• Entrepreneurship

  Dynamic process of creating incremental wealth
• Entrepreneurship

  Creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, psychic, and social risks, and by receiving the resulting rewards of monetary and personal satisfaction and independence
• Entrepreneur

  A person who sets up a business/businesses, taking on financial risks in the hope or profit
• Entrepreneur

  Commonly seen as a business leader and innovator of new ideas and business process
• Employee

  Person employed for wages/salary, especially at non-executive level, hired to work for another or for a business, firm, etc. in return of payment, work for someone else
• Inventor

  Person who invented a particular process or device, who invents things as an occupation, people who create something for the first time
• Successful Entrepreneurs

  • Independent, self-confident, have determination and perseverance, goal-oriented, know what they want and are able to focus on achieving it, have a need to achieve and to set high standards for themselves, creative, able to act quickly
• Advantages of Entrepreneurship

  • Entrepreneurs are their own bosses, can choose business that interests them, can be creative, can make lots of MONEY
• Disadvantages of Entrepreneurship

  • Entrepreneurship is risky, face uncertain and irregular incomes, work long hours, must make all decisions by themselves
• Entrepreneurial Process

  1. Identification and evaluation of the opportunity

  2. Development of the business plan

  3. Determination of the required resources

  4. Management of the resulting enterprise
• Role of Entrepreneurship in Economic Development

  Involves more than just increasing per capita output and income, involves initiating and constituting change in the structure of the business and society
• Ethical and Social Responsibility of Entrepreneurs

  Concerning corporate responsibility are related to the organizational climate perceived to be supportive of laws and professional codes of ethics
• Ethics

  Study of whatever is right and good for humans, broad field of study exploring the general nature of morals and the special moral choices to be made by the individual in his relationship with others
• Investment

  Use of savings to become future income, use of funds to acquire capital goods (factories, offices, machinery, and computers)
• Different Kinds of Investments

  • Direct Investment
  • Indirect Investment
• Business Investment

  Spending by private businesses and nonprofits on physical capital long lasting assets used to produce goods and services
• Real Estate

  The land and permanent structures like a home or improvements attached to the land, weather natural or man-made, form of real property, may produce income directly in the form of rent, indirectly in the form of crops, minerals, or timber, good investments during periods of inflation, when values tend to rise along with other prices, low in liquidity
• Savings Account

  Interest-bearing deposit account held at a bank or other financial institution, pay an interest rate that reflects conditions in the money market, where short-term government and corporate securities are traded, cannot be withdrawn without penalty for a specific period, such as 1 or 2 years
• Money Market Accounts

  Privately owned and operate for a profit, not for profit cooperative organizations operating for the benefit of members, are passed on to members in the form of lower loan costs or higher return on deposits, risk is low because such accounts in all banks and other depository institutions are insured up to 500,000 pesos through the PDIC
• Bonds

  Used by government or companies to raise money by borrowing from investors, government securities and corporate bonds
• Stocks

  Type of security that gives stockholders a share of ownership in a company, represents share of ownership in a company
• Preferred Stock

  Type of corporate security that has features of both bonds and common stock, holders have no legal rights to force a corporation to pay them the promised annual returns returns if the firm has insufficient earnings to do so
• Mutual Funds

  Company that pools money from many investors and invests the money in securities such as stocks, bonds, short-term debt
• Life Insurance

  A contract behind an insurance policy holder and an insurance company where the insurer promises to pay a sum of money in exchange for a premium, upon the death of an insured person or after a set period
• Rent

  Payment of a factor of production in excess of its opportunity cost, what is paid to any input in more than you would have had to pay it
• 4 Types of Rent

  • Inframarginal Rent
  • Pure Economic Rent
  • Quasi Rent
  • Monopoly Rent
• Inframarginal Rent


  "Infra" means below/under, "marginal" means at the margin or the end or last, Quasi rent earned by a perfectly competitive firm in the short run, any payment made in a factor of production or anything that is fixed in supply, sell their product for just what it cost to produce it, so the earn no profit, price they receive is equal to the marginal cost of producing the good
• Monopoly Rent


  Payments made to a monopolist that are more than the minimum that the firm would accept
• Unemployment


  Situation where a person actively searches for employment but is unable to find work, often used as a measure of the health of the economy
• Minimum Wage


  Lowest salary that employers can legally pay their workers, in the Philippines is governed by the Labor Code of the Philippines and is implemented by the Department of Labor and Employment
• Types of Unemployment

  • Fictional Unemployment
  • Cyclical Unemployment
  • Structural Unemployment