ECON

• Consumers


  • Purchaser of goods & services
  • Person who is a purchaser or recipient of consumer products
  • Often determine what kinds of products / services to be produced
  • Their consumption create additional jobs; companies will gain more profit
  • More profit = more expansion
  • More expansion = more need for manpower
• Household


  • Those who dwell under the same roof & compose a family
  • Distinct from a family because a household does not need to have the same financial, emotional, and social interconnection
  • Land, labor, capital, entrepreneurship, being given to firms; firms give rent, wage, profit to households
  • After the consumers, it is the unit that compose the foundation of our economy
• Consumer Behavior


  Behavior of a consumer in which how they respond to those extraneous variables
• Utility Approach


  • Guided by the law of diminishing marginal utility
  • States that as you consume products, you receive less and less marginal utility
  • States that the greatest marginal utility is achieved on the first unit of the said good
• Total Utility


  Summation of one's satisfaction / utility
• Utility


  Satisfaction or benefit received from consuming
• Marginal Utility


  • Change in total utility from increased consumption of that good or service
  • Utility is measured in units called utils
• Budget Line


  • Shows all possible combinations of x and y goods that your budget can afford to purchase
  • Shows the budget constraint
• Indifference Curve


  • Shows all possible combinations of x and y that give the same level of satisfaction
  • Tells the satisfaction of the person to attain the highest satisfaction
• Income Effect


  A shift of the budget line to the right or left
• Substitution Effect


  One good experiences a decrease in price, while the other good remains unchanged
• Standard of Living


  • Level of wealth, comfort, and material goods available to an individual, community, or social class
  • Improves as one's income and productivity increase
  • Quality and quantity of consumption are determined by the delivery of goods and services by firms
• Supplier


  • A source of materials used in producing goods / services
  • Raw material goods - unprocessed goods
  • Intermediate goods - semi-processed goods
  • Final goods - processed and transformed goods ready for consumption
  • Only final goods are included in computing for a country's GDP, which is the summation of all goods and services traded and consumed in a particular year
• Investor


  • An entity that acts as financial sources of businesses with the intention of granting profits
  • Who finance a particular company
  • Lends money to business owners
• Investment


  An asset / item acquired with the goal of generating income / appreciation
• Savings


  What is left of your income after you purchase goods and services
• Start-up Capital


  The initial capital/money a business needs to facilitate its cost
• Add-up Capital


  Used for expansion of the business, adding to the size of the factory, buying more equipment, or adding laborers
• Foreign Portfolio Investments


  Where foreign entities invest in local companies
• Foreign Direct Investment


  Foreign businesses operate in local / domestic markets
• Government


  • A political system by which a country is administered and regulated
  • A body of persons that constitutes the governing authority of a political unit or organization
  • Regulates everybody, mandates law, secures the people in a given timespace
• Role of Government in Business

  • To primarily provide basic social services to its citizens
  • Health services
  • Education
  • Security services
• Taxation


  • The practice of collecting taxes from citizens based on their earnings and property
  • The money raised from it supports the government and allows it to fund police and courts, create militaries, maintain roads, along with many other services
• 3 Powers of Government

  • Police Power
  • Power of Eminent Domain
  • Power of Taxation
• Public-Private Partnerships (PPPs)


  • Government projects funded by private entities or firms
  • In exchange, the government guarantees that the private counterpart gets the value of its investment plus a reasonable interest
• A minimum of 5% should go to education (United Nations)
• Kamag-anak ni Romualdez si Imelda Marcos; napupunta ang taxes sa healthcare and education
• 1. 27 (teacher-student ratio in government elem schools), 1:25 (teacher-student ratio in government jhs)
• How Business can be A Partner to the Government

  • As a Source of Tax Revenue
  • Poverty Alleviation
  • Provision of Service
• Socioeconomic Impact Study


  • A type of systematic analysis used to identify and evaluate the potential effects a proposed development/program may have on the social and economic aspects of the people
  • Including demographic analysis
• Demographics


  The study of quantifiable characteristics of a population
• Socioeconomics


  • The field of study that examines how economic activities and social processes affect each other
  • To examine proposed developments or official state programs and policies
• In order for your research to be clear, you must gather RRL ('di dapat 3 RRL lang)
• Business


  • As an entity engaged in commerce and trade
  • Some businesses might engage in the same activity; depends on the objective of the firm
• Entrepreneur


  One who combines the primary factors of production (land, labor, capital) to create another product/service
• Types of Businesses


  • Microbusiness: < 1,500,000 pesos
  • Small-scale: 1,500,001-15,000,000 pesos
  • Medium-scale: 15,000,001-60,000,000 pesos
  • Large scale: no limit
• Fixed Inputs


  Costs which do not change in size or amount as you increase your production or output, such as land or machinery
• Variable Inputs


  Costs which change as you increase or change your output/production (raw materials and manpower)
• Myths about Having a Business

  • All you need is a little capital to earn huge profit
  • Anything that deals with food is always profitable
  • Fad businesses like laundromats or vehicles for hire, are likely to be successful
  • A partnership is always better than a sole proprietorship
  • Additional capitalization from a future partner is always better to ensure the firm's survival
  • A shutdown is not an option
• Introduction to Business Management (POSDICON)

  • Planning
  • Organizing
  • Staffing
  • Directing
  • Controlling