Republic of the Philippines

UNIVERSITY OF EASTERN PHILIPPINES

PEDRO REBADULLA MEMORIAL CAMPUS
Catubig, Northern Samar
Web: http://uep.edu.ph; Email: uepprmcampus@gmail.com

BS Hospitality Management
First Semester

Subject Facilitator
 OVERVIEW OF THE MODULE
Course Description
This course deals with the basic principles of applied economics, and its application to
contemporary economic issues facing the Filipino entrepreneur such as prices of commodities,
minimum wage, rent, and taxes. It covers an analysis of industries for identification of potential
business opportunities. The main output of the course is the preparation of a socioeconomic
impact study of a business venture.
The following lesson will be covered in this module
Welcome to Module 1, your entry point to understanding Applied Economics! This module will
help you know more about our economy. It has three lessons:
MODULE 1: INTRODUCTION TO APPLIED ECONOMICS
• LESSON 1- Basic terms in Applied Economics
• LESSON 2- Basic Economic Problems of the Country
• LESSON 3- Applied Economics in Relation to the Philippine Economic Problems
MODULE 2 APPLICATION OF SUPPLY AND DEMAND
• LESSON 1: Law of supply and demand, and how equilibrium price and quantity are
determined
• LESSON 2: Know the factors affecting demand and supply
• LESSON 3: Compare the prices of commodities and its impact on consumers
• LESSON 4: Market Structures (perfect competition, monopoly, oligopoly, and monopolistic
competition)
The first lesson will introduce you to the basic terms used in applied economics and the second
and last part would inform you about the economic problems present in our economy and how
applied economics will help you solve these.

I hope that this module will help you become an informed citizen by being able to make
better judgements on the resources you currently have. If you are interested to learn more about
how decisions should be made when you have abundant or limited resources, this module will
answer your queries.
Think of this first module as your starting point as you trace the way to the full understanding of
economics. Enjoy and let’s get your journey started!

How to learn this module:

There are some pointers that you need to follow as you go over this module. These pointers will
help you achieve the objectives of this module successfully.
• Go through the pages one by one since the topics are related to one another. If you
miss one page, you may not understand the succeeding pages.
• Perform the activities as instructed and be sure to finish them.
• If ideas are not clear, you can always go back to the pages where they are discussed.
• Perform the final task.
Gentle Reminders
• Make sure that your handwritten answers are clear and readable.

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 • If your answers did not suffice the space provided, use extra paper and do not forget
to label these attachments.
• If you have queries and clarifications, do not hesitate to contact me (your subject
facilitator) using any of the contact details provided in the learning modules.
• Keep your modules clean and presentable.
• Stay safe!
Course Learning outcome
1. Exhibit proficiency in their chosen fields of discipline through their involvement in
various types of employment;
2. Utilize research methodologies that will allow them to generate new knowledge and
address problems and issues and promote development.

At the end of the course the students are expected to:

1. define basic terms in applied economics
2. identify the basic economic problems of the country
3. explain how applied economics can be used to solve economic problems

4. explain the law of supply and demand, and how equilibrium price and quantity are
determined
5. discuss and explain factors affecting demand and supply
6. compare the prices of commodities and analyze the impact on consumers
7. explain market structures (perfect competition, monopoly, oligopoly, and
monopolistic competition)
8. analyze the effects of contemporary issues such as migration, fluctuations in the
exchange rate, oil price increases, unemployment, peace and order, etc. on the
purchasing power of the people

STUDENT INFORMATION PASTE YOUR ID

HERE
NAME: __________________________________________ 2X2
COURSE & YR: _________________________________ Note: Recent ID
ADDRESS: ______________________________________ Pic. formal picture
CELLPHONE #: _________________________________ not a selfie picture
nor blur or dark
MESSANGER NAME: ___________________________ picture
SUBJECT FACILITATOR INFORMATION
MARY ANN C. ESTUDILLO
Special Lecturer

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 PRETEST
Before proceeding to the other parts of the module, test your knowledge by
trying to answer the questions that follow. Encircle the letter of your answer.
1. What do you call the condition in which our wants are greater than our limited
resources?
A. Economics C. Scarcity
B. Opportunity Cost D. Trade-off

2. What do you call things that you gave up when you make a choice?
A. Choice C. problem
B. opportunity cost D. Trade-off

3. What do you call the application of economic principles and theories to realworld
situations?
A. Applied Economics C. Macroeconomics
B. Economics D. Microeconomics

4. Which of the following is not a factor of production?

A. Capital C. Labor
B. Tax D. Land
5. What is supply?
A. It is a choice that you gave up C. It is the totality of our needs
B. It is the amount of goods for sale D. It refers to the economy

6. Which of the following classifications does not fall under underemployment?

A. Highly skilled but working in low paying jobs B. Part-time workers who would
prefer to be full time.
C. Without work and currently available for work
D. Workers who are highly skilled but working in low skill jobs
7. When does underemployment occur?
A. It is when a person does have work
B. It is when a person does not have work
C. It when a person does not work for a job that fits his/her skills.
D. It is when a person works for a job that fits his/her skills.
8. Which of the following works best for our country?
A. Decrease in the employment rate
B. Decrease in the underemployment rate
C. Increase in the underemployment rate
D. Increase in the unemployment rate

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9. What is most likely to happen when the population continues to rise?
A. Employment rate will go up
B. Poverty rate will decrease
C. Resources will become scarce
D. Unemployment rate will go down

10. According to Philippine Statistics Authority (PSA) what is the minimum age that a
Filipino must have in order to be classified as an unemployed person? A. 13 years
old
B. 14 years old
C. 15 years old
D. 18 years old

11. What kind of approach is used by economists to explain how the economy works?
A. Collaborative C. positive
B. experimental D. scientific

12. What are you experiencing when your wants are greater than your resources?
A. Poverty C. trade-off
B. Scarcity D. unemployment

13. What is the reason why we are studying economics?

A. Poverty C. trade-off
B. Scarcity D. unemployment

14. What type of analysis are economists concerned with in order to become
objective?
A. careful C. normative
B. negative D. positive

15. Which major characteristic of economists enable them to make sound decisions
in solving economic problems?
A. objective C. subjective
B. prompt D. trustworthy

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 MODULE 1
Introduction to Applied Economics

LESSON 1 BASIC TERMS IN APPLIED ECONOMICS

INTRODUCTION
Have you tried to budget your money in order to buy what
you want to eat or consume in your daily living? Have you Learning Objective:
tried to run out of water while you were taking a bath? Have Define basic terms in
you tried to limit the number of kilos of rice that you will buy applied economics.
for your daily consumption? If you have answered yes to at
least one of these questions, then you must be facing the trauma of not being able to
have enough of what you wanted.
In this lesson, you will be introduced to the most basic terms used in Applied
Economics and their corresponding definitions. These words will surely guide you in
understanding the real meaning of Applied Economics.

DISCUSSION
What is Scarcity?

Life would be easier if we could have whatever we wanted, whenever we

wanted it. Unfortunately, life doesn’t work that way. There are times when we feel like
buying all the things we want while window shopping but we just don’t have enough
money. At times, when we are craving for some food, the store just runs out of stock.
There are times when we really wanted to take a bath but there is no single drop of
water coming out of the faucet, or we wanted to light up a candle but we ran out of
matchsticks. You see, this is scarcity, and it is everywhere. Scarcity is the condition
in which our needs and wants are greater than our limited resources.

Needs and wants differ from person to person. The easiest way to describe
needs is that these are the things that we can’t live without. Examples of needs are
air, water, food and shelter. On the other hand, wants are those that we can live
without. Examples of wants are jewelries and luxuries.

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Why is scarcity linked to Economics?

Scarcity is the reason why people have to study and practice economics.
Economics studies how people distribute or divide their limited resources in order to
satisfy their unlimited wants. Or simply, it is the study of how individuals and societies
deal with scarcity.

For instance, if after your examination you plan to eat a heavy lunch with your
limited allowance which is 100 pesos, you will have to budget it and decide about
which food you will buy to satisfy your hunger. Since we are unable to have
everything, we desire, we must make choices on how we will use our limited
resources.

What are Trade-offs?

When making choices, there are things that we need to give up. Tradeoffs
consist of all the options that we give up when we make a choice.
Following the previous example, you planned to spend your limited allowance
to buy 2 pieces of siopao and soft drinks to satisfy your hunger. Your other option is
to pay for a heavy value meal at 120 pesos or buy your favorite meal combo at 115
pesos. You gave these options up since you can only afford to pay for the siopao and
drinks. The choices that you’ve given up are your trade-offs.

What is an Opportunity Cost?

Among all your trade-offs, the most desirable alternative that you gave up is
called the opportunity cost. In the previous example, the most desirable option is to
buy your favorite meal combo at 115 pesos. You cannot afford it since you only have
100 pesos so you gave it up.

No matter what choice you make, there is an opportunity cost, or next- best
alternative, that must be sacrificed. Opportunity cost is the highest- valued
alternative that must be sacrificed in order to get something else. The key to making
the best possible decision is to minimize your opportunity cost by selecting the option
that gives you the largest benefit.

What are the Branches of Economics?

Microeconomics is a branch of economics that is concerned with the decision-

making done by smaller economic units such as individuals or consumers, firms and
industries. Macroeconomics on the other hand is the study of the large economy as
a whole or the aggregate economy.

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What is Supply and Demand?

To better understand Economics, we also need to know about supply and demand.
Supply refers to the total number of goods or services available for sale. These goods
or services are produced by making use of the factors of production consisting of
land, labor and capital. Land refers to all natural resources or any raw materials
coming from the ground that is used to produce supply. Labor on the other hand is
the work done by people or human resources. Capital does not only mean money as
this can be in the form of
man-made tools or objects that may be used to produce supplies. Demand on the
other hand refers to the aggregate or the totality of the needs and wants of the
customers. Balancing these two is one of the goal of Economics so that scarcity is
eliminated.

What is Applied Economics?

Applied Economics is the application of the principles of supply, demand, trade-

offs, opportunity-costs, and other economic theories to solve real-world problems. It
may be practiced in the microeconomic or macroeconomic level. Applying economic
theories in our lives means trying to address actual economic issues and be able to
do something about it.

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LEARNING ACTIVITY 1

Directions: Define the basic terms in Economics as indicated below by

completing the concept map. Widen your imagination and think of words or phrases
which may define these terms:

Supply Demand Needs Wants

Applied Economics
Trade-offs

Opportunity Costs Economics

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 LEARNING ACTIVITY 2:
Directions: On Column A are the basic terms used in Economics. Define each term
based on how you understand it from the previous texts. Place your definitions under
Column B.

Column A Column B
1. Aggregate
2. Capital
3. Demand
4. Economics
5. Labor
6. Land
7. Macroeconomics
8. Microeconomics
9. Needs
10. Opportunity Costs
11. Scarcity
12. Supply
13. Trade-offs
14. Wants

ADDITIONAL ACTIVITIES
Situation: Imagine that you were on a class field trip for three days. Your mom sent
you a pocket money of Php 1,500.00. You have already planned to use this to buy
an acoustic guitar so you could practice playing it when you got home. While strolling
around the mall, you found a beautiful necklace which would certainly look good on
your mom and it costs Php 500. You know that if you bought the necklace, your mom
would be glad, however, buying it would make you unable to buy your beloved guitar.
Which one would you buy? Why?
Answer:
______________________________________________________________

What basic economic term(s) can we extract from the situation above? List them down here:

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Congratulations for completing Lesson 1!
LESSON 2: BASIC ECONOMIC PROBLEMS OF THE
COUNTRY

INTRODUCTION
In the previous lesson, you were introduced to the basic terms used in Applied
Economics. These terms will help you to better understand applied economics and
the current situations faced by our country.
In this lesson you will be identifying the basic Learning Objective:
economic problems of the country which are all linked to Identify the basic
scarcity. Take time to read and feel the different types of economic problems of
situations you will be immersed in. the country.

DISCUSSION
All societies are faced with questions about what goods and services should be
produced, how these should be produced and who consumes these. Knowing the
answers to these questions would lead us to identify possible problems and solutions
to existing economic problems.

What are the Basic Economic Problems in the country?

Philippines as a growing country is not exempted from experiencing economic

problems. Under the Duterte administration, the country has significantly improved its
economic marks, however, problems still exist. Take a look at the following scenario
and examine or identify the economic problem present in it.
Situation #1: You are a fresh graduate at a prestigious university. You graduated as
summa cum laude and received numerous recognition awards. You took up an
education course in order to become a teacher, however, after graduating, you could
not find available jobs within the province. What economic problem is present and is
affecting you here?
1. In this situation, you are affected by the so-called unemployment problem, which
is still among the basic problems of the country. According to PSA (Philippine
Statistics Authority, the unemployed include all persons who are 15 years and
over as of their last birthday and are reported as: (1) without work and currently
available for work and seeking work; or (2) without work and currently available for
work but not seeking work for the following reasons: Tired/believed no work is
available; awaiting results of previous job application; temporary illness/disability;
bad weather and; waiting for rehire/job recall.

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 According to the records of PSA (Philippine Statistics Authority), the
unemployment rate in the year 2018 is at 5.3% and this went down a little bit in the
year 2019 becoming 5.2%. These figures show that there is still a huge number of
Filipinos who are not working. Not having a job means not having a source of income
to provide for our personal needs and wants, not being able to being prone to scarcity
issues. Unemployment has been an issue in the country for many years which is why
the government is seeking ways to address the problem.
Aside from unemployment, another basic economic problem is faced by
Filipinos. Discover it by reading and immersing yourself in the situation below.
Situation #2: You are a newly-registered nurse. You wanted to immediately find a
job to save enough money for your sick father’s hospitalization. There is no other
available job opportunity in the area except for an immediate hiring for customer
service representatives. You got the job and you’re now a contact center agent. What
economic problem is present and is affecting you here?
2. In this situation, you are affected by the so-called underemployment problem,
which is also among the basic problems of the country. Accordingly, labor that
falls under the underemployment classification includes those workers who are
3. highly skilled but working in low paying jobs, workers who are highly skilled but
working in low skill jobs and part-time workers who would prefer to be full time.
According to the records of PSA (Philippine Statistics Authority), the
underemployment rate in the year 2018 is at 18.0% and this went down a little bit in
the year 2019 becoming 15.6%. There is a decrease in the percentage rate which
means the Philippines is getting better, however it remains to be an economic
problem. Having a job that doesn’t match your skills still boils down to being prone to
scarcity issues.
Situation #3: Suppose that you, being the eldest of ten siblings were not able to finish
your studies. You were forced to stop going to school at the age of 13 and find a job
at an early age in order to support your siblings. What economic problem can be seen
here?
4. In this situation, you are affected by the number one problem of the country which
is poverty.
The booming population growth in the Philippines is another basic economic
problem that can be connected to the issue of scarcity. When population becomes
too big, economic resources may no longer be enough to support the increasing
number of people. Food, water, shelter, medicine and other resources wouldn’t be
enough to satisfy every people’s needs and wants.
On a 2015 report by the Philippine Statistics Authority (PSA), five (5) out of nine
(9) basic sectors of the economy are considered very poor. The farmers came first,
followed by fishermen, children, self-employed and unpaid family workers, and
women. You see, those who do hands-on jobs usually get lower incomes. This is

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even the reason why Filipinos tend to go abroad as they get better pays outside the
country.
All of the country’s basic economic problems vary with times and
circumstances. Unemployment, underemployment, poverty and population increase
are just few of the basic economic problems faced by our country. These problems
are linked to scarcity. These problems would not have occurred if the resources or
supplies are equally distributed to suit to the needs and wants of people. It is now a
challenge for you to observe and identify other economic problems so you may be
able to think about it and reflect on how you could help in solving it.

LEARNING ACTIVITY 1:
Directions: Concentrate on reading the following situation. Immerse yourself
into it. Try to feel it and answer the questions that follow.
At the age of 14, you were forced to leave school as you can no longer pay for
the school fees or afford to buy food whenever you’re in school. Supposedly, you will
be entering senior high school. You are the eldest son and you have 5 other siblings.
As a product of a broken family, with your father marrying into another woman, and
your mother marrying into another man, you were left with the responsibility of taking
care of your younger siblings and your family as a whole. In order to survive, you did
many part-time jobs. One day, you felt that the money you’re earning is no longer
enough to support your siblings and so, you decided to find a regular job. While
looking for a job, you got frustrated because nobody would want to hire you as you
are still very young and lack qualifications. Identify the problems that you experienced
in this situation. List these below.
Answer:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

LEARNING ACTIVITY 2:
Situation 1: Imagine that you were born and raised in a wealthy family. You can buy
what you want, go to places you love and enjoy the things that money can buy. You
wanted to become a doctor so you pursued your education and graduated with
honors. The only problem is that, since you are the heir of the CEO of a large business
company, you cannot practice your profession as a doctor. Instead, you are forced to
succeed the business of your family. Thus, you are now working as a businessman.
Identify the economic problem that can be seen from this scenario. Briefly explain
your answer.

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Answer:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

LEARNING ACTIVITY 3:

Directions: Try to summarize what you have learned by completing the following
statements:

1. All societies are faced with questions about ________ goods and services should
be produced, __________ these should be produced and _________ consumes
these.
2. According to PSA (Philippine Statistics Authority, the unemployed include all
persons who are ______ years and over as of their last birthday and are reported
as: (1) without work and currently available for work and seeking work; or (2)
without work and currently available for work but not seeking work for the following
reason.
3. _______________________ classification includes those workers who are highly
skilled but working in low paying jobs, workers who are highly skilled but working
in low skill jobs and part-time workers who would prefer to be full time.
4. On a 2015 report by the Philippine Statistics Authority (PSA), five (5) out of nine
(9) basic sectors of the economy are considered very poor. The _________ came
first, followed by _______________, children, selfemployed and unpaid family
workers, and women.
5. Unemployment, underemployment, poverty and population increase are just few
of the basic economic problems faced by our country. These problems are linked
to ________________.

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 LEARNING ACTIVITY 4:
Directions: Cut out at least 3 pictures from newspapers or any unused catalogues
which for you represents a particular economic problem. Paste it inside the boxes
below and write a short caption identifying the economic problem present in it.

15

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LESSON 3: APPLIED ECONOMICS IN RELATION TO
THE PHILIPPINE ECONOMIC PROBLEMS

INTRODUCTION
You have learned from the first lesson of this module
that applied economics is the application of economic Learning Objective:
principles and theories to real-world situations in order to Appreciate the applied
predict future outcomes. Therefore, it makes sense that if economics can be used
you will apply the economic theories that you will learn in to solve economic
your personal life and the society, you’re at, you may problems.
actually be able to address actual economic issues and do
something about it.

DISCUSSION
HOW ECONOMISTS FACE ECONOMIC PROBLEMS

Just like a scientist who needs a science laboratory, as an economist, your

laboratory is the world around you, from the economy as a whole to the decisions
made by firms and individuals. In order to explain why the economy works in a certain
way you need to gather historical data or even wait for events to take place to better
understand the economy.
The scientific approach is necessary in solving economic problems. It consists
of steps such as observing the economic problem that interests you; proposing an
explanation about why the problem occurred; gathering data to prove the truthfulness
of the causes of the problem and then recommending the best possible solution
based on the verified causes.
One major characteristic of economists that enable them to make sound
decisions in solving economic problems is by being objective. This means that they
try to avoid letting personal beliefs and values influence the outcome of their analysis
To be as objective as possible, economists make use of positive analysis. A
positive statement can be tested and validated. For instance, the statement “the
joblessness rate is 5.0%” is an affirmative statement because it can be tested by
collecting data.
In contrast, a normative statement cannot be corroborated. For instance, the
statement “an unemployed worker should receive financial assistance in order to
survive” is a matter of opinion. Financial assistance may be beneficial to the
unemployed but it might turn out as a way of pampering them which would make them
want to stay lazy and unemployed. Neither opinion is correct or not because of
opposing standpoints based on values, traditions and beliefs.

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 Economists are concerned with positive analysis. In contrast, normative
statements are applied by policymakers, voters, and philosophers. There is no exact
way to solve economic problems, if there was, they could not have existed. However,
Applied Economics employs positive analysis and the scientific method which is the
best way to solve economic problems.
For instance, if the joblessness rate rises, economists try to apprehend the
circumstances that produced the situation. Economics, if done properly, is confined
to positive analysis.
Going back to the previous activity that you’ve answered where you have been
affected by unemployment since you cannot find available jobs, the most appropriate
thing an economist must do is to apply positive analysis. Unemployment happens
due to scarcity of jobs which means the number of prospect workers or job applicants
do not match the number of jobs available.
Thus, these numbers must be looked into. Data should be gathered and
validated before economists could suggest or recommend something that will
equalize the numbers. This would need government intervention at the end since they
have control over the economy. This is how applied economics works.
✓ Applied Economics makes use of the scientific approach to explain how the
economy and the world works.

✓ Economists try to avoid letting personal beliefs and values influence the
outcome of their analysis by being objective.

✓ To be as objective as possible, economists make use of positive analysis

which can be believed of as a depiction of “what is and can be tested.

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 MODULE 2
Application of Supply and Demand

LESSON 1: LAW OF SUPPLY AND DEMAND, AND

HOW EQUILIBRIUM PRICE AND QUANTITY ARE
DETERMINED

INTRODUCTION
Have you tried buying goods on demand? Have you asked yourself why the
price is too high or too low? Do you believe that these form part in the fundamental
economic principle? In this lesson, you will discover why price rises, goods falls down
and vice-versa.
But before that, you have to unlock and familiarize first the unfamiliar words that you
will be encountering as you go along with the discussion in this lesson.

DISCUSSION

THE MARKET

A market is any activity for business set-up. It is where consumer buys and the
seller sells. It is categorized as local, national and international markets. Some
involves face-to-face contact between demander and supplier, others are impersonal,
with buyer and seller never seeing or knowing each other. The concept of market is
important because it is where a person who has excess goods can dispose them to
those who need them. This collaboration should lead to an integral agreement
between buyers and sellers on volume and price. A purely competitive market is
known to be as unique way of competition in which there are many competing firms
selling identical products or services.

DEMAND

Demand is the value of goods and services that buyers are willing to purchase
in every price. A demand schedule depicts the different quantities the consumer is
willing to buy at numerous prices. It centers on unlimited wants.

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Demand function shows how the quantity demanded of a good depends on its
determinants, the most important of which is the price of the good itself, thus, the
equation :

Qd = f(p)

This denotes that the quantity demanded for a good is reliant on the price of that
good. Presented in Table 1 is a hypothetical monthly demand schedule for an
empanada for one individual, Juan. The quantity demanded is determinable in each
price with the following demand function:

Qd = 6-P/2

Price per Empanada Quantity Demanded

P0 6
2 5
4 4
6 3
8 2
10 1

Table 1 Hypothetical Demand Schedule of Juan for Empanada

At price P10, Juan is willing to buy one empanada for a given period. As price
goes down to P8, the quantity he is willing to buy goes up to two . At price of P2, he
will buy five. There is an indirect relationship between the price of a commodity and
the quantity demanded for that good. The lower price allows the consumer to buy
more, but as price rises, the amount the consumer can afford to buy tends to go down.

THE LAW OF DEMAND

The law of demand is the basic principle of economics. After observing the
behavior of price and quantity demanded in the above schedule, we can now state
the Law of Demand. Using the assumption “ceteris paribus”, meaning all other things
being constant, there is an inverse relationship between the price of a good and the
quantity demanded for that good. The higher price consumers will demand a lower
quantity of a good. The low price of the good influences the consumer to buy more.

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SUPPLY

Supply describes the total value of a good or service that is available to

customers. The supply schedule illustrates different quantities the seller is keen to sell
at various prices. The supply function shows the dependence of supply on various
determinants that affect it.
Assuming that the supply function is given as Qs = 100+5P and is used to
determine the quantities supplied at the given prices.

Table 1.2 Hypothetical Supply Schedule of James for Rice in One Week

Price of Rice in Php (per kilo ) Supply (in kilos )

20 200
40 300
60 400
80 500
100 600

As can be seen in Table 1.2, the relationship between the price of Rice and the
Quantity that James is willing to sell is direct. The greater the price, the higher the
quantity supplied.

THE LAW OF SUPPLY

The schedule shown above depicts a positive or direct relationship that prevails
between price and quantity supplied. As price increases, the quantity supplied rises;
as price decreases, the quantity supplied falls. This relationship is called the LAW OF
SUPPLY. A supply schedule tells us that the firms will produce and offer for sale more
of their product at a high price than a low price.

Price is the value that consumers exchange to obtain a desired product. It is an

obstacle from the viewpoint of the consumer or buyer, who is on the paying end. The
greater the price, the less the consumer will purchase. But the supplier or seller is on
the receiving end of the product’s price. To a seller, price represents income, which
serves as an incentive to produce and sell more products. The greater the price, the
higher this incentive and the higher the quantity supplied.

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Supply and Demand: MARKET EQUILIBRIUM
Demand and supply can identify how the buying decisions of households and
the selling decisions of businesses interact in determining the price of a product and
the quantity actually purchased and sold. Market equilibrium is a condition where
demand is equal to supply. The equality means that the quantity that sellers are willing
to sell is also the quantity that buyers are willing to purchase for a price. As a market
experience, equilibrium is the stability of market demand, supply and price. It is also
an agreement between how much buyers and sellers are willing to transact.
Equilibrium price is the price in the market at which demand and supply are equal. A
shortage occurs when quantity demanded surpasses quantity supplied. While a
surplus occurs when quantity supplied exceeds quantity demanded.

Example of Determination of Market Equilibrium :

Assume a demand and supply function as the following:

(Demand) P=60-2Qd (Supply) P=30+4Qs

Where : P=price
Qd = Demand
Qs = Supply in thousands

50-2Qd = 20+4Qs

At equilibrium, P=50 and Q = 5 as illustrated by the demand-supply schedule and

graph below.

Table 1.3 Demand-Supply Schedule

Demand Supply Price

58 34 1
56 38 2
54 42 3
52 46 4
50 50 5
48 54 6
46 58 7
44 62 8
42 66 9
40 70 10

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LEARNING ACTIVITY 1
Directions: To explain the law of demand and supply, indicate the effects of the given
statements of a commodity based on the following outcomes. Write the letter of your answer
based from the following choices
A. Increase B. Decrease C. No change

1. Decrease in the price of commodity X

A. Demand for commodity X _______
B. Supply of commodity X _______

2. Anticipated increase in general price level of basic commodities

A. Demand for basic commodities _______
B. Supply of basic commodities _______

3. The price of white sugar increased by 10 pesos

A. Demand for basic commodities _______
B. Supply of basic commodities _______

4. The price of pandesal increased by 1 peso

A. Demand for Pandesal _______
B. Supply of Pandesal _________

5. The price for electronic gadgets increased by 500 pesos

A. Demand for electronic gadgets ___________
B. B. Supply of electronic gadgets _______

20 | P a g e A P P L I E D E C O N O M I C - M . E S T U D I L L O
LESSON 2: KNOW THE FACTORS AFFECTING
DEMAND AND SUPPLY

INTRODUCTION
Supply and demand are essential in the market economy. Supply and demand
influenced each other and does impact the prices of consumer goods and services
within an economy. Rising and decreasing in commodities prices, abundance and
limited supply is well understood by analyzing the impact of the factors affecting
demand and supply. Sellers and consumers play a crucial role as to how prices are
determined. As sellers, it is important to know what are the factors affecting
consumers’ demand and to come up with better strategies in delivering good quality
products and services to consumers to ensure good value for money. As buyers, it is
important to know how sellers priced their products based on the factors affecting
supply and demand. Better understanding of this aspect helps the consumers on
making wise buying decisions. In general, both sellers and buyers will have a better
understanding and grasp as to how buying and selling activities affects the economy
as a whole.

LEARNING ACTIVITY 1
Directions: Classify and determine whether the given word is a factor affecting supply
or a factor affecting demand. Write S for factors affecting supply and write D for factors
affecting demand.

________1. Number of sellers ___________ 6. Number of consumers

________2. Income ____________ 7. Taxes and Subsidies
________3. Price of Related Goods ____________ 8. Taste
________4. Price of Resources ____________ 9. Income
________5. Technology ____________ 10. Price Expectations

DISSCUSSION
Non – Price Determinants of Demand:
The non-price factors once ceteris paribus assumption is dropped are now allowed to
influence demand. Cited below are the non-price factors affecting demand:
1. Tastes and Preferences – Taste of the product affects the demand that the
buyer is willing to pay at a certain price. Once the product becomes more
desirable when it comes to the consumers taste and preferences means the
more products will be demanded at a certain price. Unfavorable change in the
consumer’s taste and preferences will lead to decrease of the products demand.

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2. Number of Consumers – An increase of number of consumers in the
marketplace leads to the increase of demand. A decline of the number of
consumers in the marketplace decreases the demand.
3. Income –The income of the consumers affects their capacity to buy a certain
product. If consumer income increases, the consumers capacity to buy also
increases. If the consumers income decreases, the consumer’s capacity to buy
a product also decreases.
4. Prices of Related Goods – An increase or decrease of the demand on the price
of a related good depends whether the related good is classified as a substitute
or a complement product.
• A substitute product is classified as a good that can be replaced in place of
another product when the preferred product is not available.
• A complementary good is classified as a product that is used together with
another good.
• Unrelated Goods is a change in the price of one product has little or no effect
on the demand for the other product. Examples are butter and volleyball,
carrots and automobiles.
5. Change in customers’ expectations - An expectation of a higher future price
increase may cause the consumers to buy more for a specific product in order
to beat the possibility of price increase, thus it increases the current demand.

Non-price Determinant of Supply

1. Price of Resources – The cost of production incurred by the firm is determined
and is affected by the prices of the resources used in the production process.
Increase of the resources prices also increases the production cost, assuming
a particular product price, it potentially reduces the profits.
2. Technology – Latest development and advancement in technology enable firms
to produce more units of output that leads to lower production costs.
3. Taxes and Subsidies – Businesses considered taxes as an expense. An
increase of the production cost will also increase the sales of property taxes and
resulting to a reduced supply.
4. Prices of Other Goods –Companies that manufacture or sell a particular product
switched to other product line by means of increasing its production of “other
goods” when the prices of the “other goods” increases in order to increase the
profit.
5. Price Expectations –The willingness of a seller to produce or supply a product
is affected by the expectations of the product’s future price.

6. Number of Seller – The more the sellers are in the marketplace, the greater the
supply. The fewer the sellers mean there is less supply.

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LEARNING ACTIVITY 2:
Directions: Provide a concise and a brief statement to support your answer.

1. An increase in the price of inputs leads to a decrease in supply.

Student’s
explanation:____________________________________________________
______________________________________________________________
2. If there are more producers in the market, there will be a larger supply of
products/services.
Student’s
explanation:____________________________________________________
______________________________________________________________
3. The increase in the level of production technology will increase supply.
Student’s
explanation:____________________________________________________
______________________________________________________________
4. Substitute goods are typically consumed together.
Student’s
explanation:____________________________________________________
______________________________________________________________
5. When income rises, the demand for the product will increase, when income
falls, the demand for the product will decrease.
Student’s
explanation:____________________________________________________
______________________________________________________________

LEARNING ACTIVITY 3: Directions: Identify the non-price determinants of supply

from the following statement. Select the answer from the given words below. Write
the answer on the space provided for each number.
- Change in resource prices - Change in prices of other goods
- Change in technology - Change in expectations
- Changes in taxes and subsidies - Change in number of suppliers

_____________________1. An expectation of a substantial rise in future log prices

decreases the supply of logs today.

_____________________2. An increase in the price of cucumbers decreases the

supply of watermelon.

_____________________3. An increase in the number of tattoo parlors increases

the supply of tattoos; the formation of women’s professional basketball leagues
increases the supply of women’s professional basketball games.
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_____________________4. An increase in the excise tax on cigarettes reduces the
supply of cigarettes; a decline in subsidies to state universities reduces the supply of
higher education.

_____________________5. The development of more effective wireless technology

increases the supply of cell phones.

_____________________6. A decrease in the price of microchips increases the

supply of computers; an increase in the price of crude oil reduces the supply of
gasoline.

LEARNING ACTIVITY 4: Directions: Identify the non-price determinants of

demand from the following statement. Select the answer from the given
words below. Write the answer on the space provided for each number.
- Change in expectations - Change in number of buyers
- Change in the price of related goods - Change in Buyer tastes
- Change in income

____________________1. Physical fitness rises in popularity, increasing

the demand for jogging shoes and bicycles; patriotism rises, increasing
the demand for flags.

____________________2. A decline in the birthrate reduces the demand for

children’s toys.

____________________3. A rise in income increases the demand for

normal goods such as donuts, sports tickets, and necklaces while
reducing the demand for inferior goods such as used clothing, squash,
and inexpensive wine.

____________________4. A reduction in airfares reduces the demand

for bus transportation (substitute goods): a decline in the price of DVD
players increases the demand for DVD movies (complementary goods).

____________________5. Inclement weather in South America creates an

expectation of higher future prices of coffee beans.

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LESSON 3: Compare the prices of commodities and its
impact on consumers

INTRODUCTION
Buyers and sellers play a significant role in the marketplace. A lot of studies
have been published regarding how demand and supply affect the commodities
prices. In this module, we are more focused on discussing and analyzing how the
prices of different commodities impact the consumers.
Prices of commodities can go up, stabilized or go down. Learning an idea of the basic
knowledge on “how and why” the price of good and services increase and decrease
in our country. It widened your understanding on what are the factors that affect the
prices of commodities and how this affects the buying behaviour and purchasing
power of the consumers.
Furthermore, there are some activities that capture your interest to better
understand the lesson. These activities will measure your decision making and
learning to approve judgment in a particular situation. It will also give you practical
scenarios that will help you in your buying decisions.

DISCUSSION

Price of basic commodities

Commence with of commodity is any tangible item that can be bought and sold. Like
an oil, rice, fruits, vegetables and meat. Price will be affected to the demand of the
commodity of the consumers. When there will be rise of price of chicken meat also
there will increase of price in a beef. It is called as substitute goods. However, when
there is low stock of rice there will be higher increase of price of a corn is it called as
complement goods. The basic prices of commodities will be affected on supply and
demand of a particular good.
Talking about supply and demand that if the price increases the demand decreases
while decreasing the price if the supply increases. Demand is the consumer what they
needs however supply is the product the consumer needs. Look at the diagram below
on the cycle of supply and demand.

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 Supply

Decrease Price Commodity Increases Price Commodity

CYCLE OF LAW
OF SUPPLY AND DEMAND

Demand

Buying Behaviour of Filipinos

In term buying behaviour of Filipino have unique characteristics as consumers since

they buy a durable product for long term used. It should be suit up with their
preferences, behaviour brand loyalty, advertising and value of money.
1. Preference – is the way it fit in to his/her beauty, hygiene, health and
convenience.
2. Behaviour brand loyalty – they prefer brand types of product.
3. Advertising – commercial affects preferences in buying products.
4. Value of money – choosing affordable products.

Basic commodities vs. Prime Commodities

There are things that you want to buy like cell phone, laptop, tablet, and any gadgets
you love to buy. Delicious food you can buy in the mall and in the market. You want
to buy wonderful dresses and stylist shoes. You want expensive cars and motorcycle
that fit your convenience. However there things you buy for daily needs like rice, meat,
beef, fruit, and vegetable.

Basic commodities is different in prime commodities, basic commodities is the thing

that you really need while prime commodities the things you like to buy for yourself.
Example:
Basic Commodities: Prime Commodities
o Firewood o Cell phone
o Charcoal o Cars
o Cooking oil o Tablets
o Salt o Laptop

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LEARNING ACTIVITY 1
Direction: Apply the Law and supply in term of price of commodities. Write
INCREASE or DECREASE of price.
Product Price

1. Higher Demand

2. Lower Demand

3. Higher Supply

4. Lower Supply

LEARNING ACTIVITY 2
1. Cite specific products that you will still buy even though the price will increase.
Why?
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________.

2. Cite specific products that you will not buy if the price will increase? Why?
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________.

3. How does the price of the product influence your buying decision?
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________.

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LESSON 4: MARKET STRUCTURES (PERFECT
COMPETITION, MONOPOLY, OLIGOPOLY, AND
MONOPOLISTIC COMPETITION)

INTRODUCTION
Imagine yourself in a marketplace and try to observe the types of existing sellers and
the products they are offering. What have you observed? Compare the prices of the
commodities on the same products sold by many sellers, same products sold by few
sellers and a unique product specifically sold by one seller? Is there any significant
difference with the price? In this lesson, we will be able to identify the types of market
structures and how does the price is influenced by the number of sellers selling the
same or specific products.

Before we proceed to the lesson, let’s unlock and familiarize first the unfamiliar words
that you will encounter as you go along with the discussion in this lesson.

DISCUSSION
What is a Market Structure?

Market structure (also called market forms) describes the state of a market with
regards to competition or the actual settings in the market.

It also refers to the organizational characteristics that establish interrelationships

between the buyers and sellers of a particular market. Thus, the participation of
buyers and sellers are vital.

Competition is rivalry among many sellers in a particular market. As a student we

are always competing each other like sports, quiz bees and other school related
competition activities. Thus competition may help motivates us to perform well to
achieve our goals in life.

Market has impersonal competition among sellers who compete to sell their goods
and services among purchasers who use their purchasing power to acquire the
availability of products.

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 The major are:

• the same product are

sold by sellers
• the consumer is more
knowledgeable of the
products(no need to
advertise)
1. Perfect competition • many buyers and
sellers competing
each others
• firms are price taker
• ease entry/ exit of
firms

Perfect Competition

This is a type of market form in which there are more firms that sell the same products
or render services and no one has enough market power to be able to set prices on
the product or service without losing business as the conditions for perfect
competition are strict, there are only a few markets that are considered to be perfectly
competitive thus this market form only exist to compare with other market forms.

A perfectly competitive market assumes a huge number of companies to sell the

same products. We call these companies "price takers" because they have no market
power or ability to control prices.

• Large number of buyers and sellers: There are many buyers and sellers who
will participate in the market at a given price.
• No barriers to entry and exit: There are no barriers to entry and exit for firms
and firms are able to enter or leave the market without any issues.
• Perfect information: All buyers are expected to know the price of the product
set by all sellers and sellers are supposed to know the production process of their
competitors.
• Price taker: they have to go along with the market price

These characteristics are mostly impossible to achieve in reality and there are many
markets that are perfectly competitive. In addition, information is always imperfect
and it is not possible for buyers to know exactly the price set by all sellers, and sellers
are not willing to share their production methods with their competitors. Nevertheless,
the study of perfect competition is important as it is used to compare with the other
market forms.

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A. Monopolistic Competition:
A market structure which has large number of firms who offer
differentiated products. It is easy to enter/ exit in the market. It is characterized both
perfect competition and monopolistic competition. The only producers of that specific
products. It allows the firm to be price maker, it means that he/ she can set the price
of their products depending on the differentiation on the firm products. Examples:
Restaurant like burger restaurant, pizza restaurant. The both offer differentiated
products yet the customer must choose only one among them to feed his/ her
stomach. B. Oligopoly:

It is an a form of market structure in which there are only few firms producing
products that range from slightly differentiated to highly differentiated. Each firm is
huge enough to influence the industry. Barriers to entry exist. Only few firm
dominated the market, but few enough so each firm alone can affect the market.
Entry is possible but is more difficult because of some barriers like political and costly
capital. Example is the gasoline industry few enough but the decision of one firm can
affect the whole economic activities. C. Monopoly:

A monopoly is a precise form of market structure. A monopoly occur when only one
person or enterprise is the only supplier of a particular good. Thus, monopolies are
characterized by no competition within the market producing a good or service.

• Profit maximizer: Due to lack of competitors, the business/ firm can maximized
their profit and earns high.
• Price maker: the business owner also set the price of the goods and services
offered at his/ her own preference.
• High barriers to entry: other sellers are unable to enter the market because of
some reasons
• Single seller: only one seller can participate in the market activities.

What is Purchasing Power?

Purchasing power is the equivalent rate of a currency expressed in terms of the

value of goods or services that a unit of money can buy. Price increases reduce the
purchasing power of money that in turn has an adverse impact on consumers'
welfare. It is vital because, all else being equal, inflation decreases the amount of
products or services you would be able to purchase. Purchasing power of people is
always affected in a community with a contemporary issue such as migration,
unemployment, fluctuation in the exchange rate, peace and order, etc.

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Migration

Economic migration forms a large part of the reason why people migrate.
Discretions to transfer can be influenced by high poverty in the country or area of
origin. Through the social systems, people receive information from people who
already migrated to other cities or countries.

Labor migration is a term used which refers to people with Filipino

citizenship who reside in another country for a restricted period of
employment. In the long term, both high and low-skilled workers who
migrated to other country increases the purchasing power and they
have extra disposable income. Thus, they afford sending their children
to reputable school with a quality education and bringing good life to
the family.

What are the causes of migration?

1. Poverty
2. Unemployment
3. Improve standard of living
4. Higher Salary
5. Economic Security

Unemployment
Unemployment is a condition of not being currently employed. Those not
employed will encounter a reduction in their living standards, as their
income decreases. The jobless person will have less purchasing power,
and less disposable income. Thus, for people with the little means of living,
they will also adjust their spending. They will look forward to any
opportunity of help from others and limiting their purchasing power not
same good as before. Lastly people having no means at all they will
become more aggressive and worried from coming opportunities in life.

Fluctuations in exchange rate

The value of the exchange rate is important in creating national policies

especially in open economies. It is also important in guiding the exporting
and exporting of a country.

For example, the Philippine peso (PHP) in a United States dollar

(USD) in 2018 was almost P53.1424 per $ 1. The peso rate of a Japanese
yen (JPY) in 2018 was almost P0.46787 per ¥ 1. The pesos rate of
Thailand (baht) in 2018 was almost 1.6259 per TBH.

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 Under the fixed exchange rate, the exchange rate may also decrease. This event
is called a devaluation where the local currency amount of currency is decreasing in
other countries. This is contrary to revaluation where the value of local currency in
other countries is increasing. In these cases, there may be devaluation or revaluation
only if the government announces it.

Greater prices lead to a diminishing in the purchasing power of a dollar. As a

result, buyers often adjust their purchasing behavior and spend less of their
disposable income. This effect of decreased purchasing power lead to a decrease in
overall consumer spending around the country.

Oil Price Increases

During big-time oil price increases in the country, you can hear everyone complaining
about how harder it will be to make ends meet. Some will go to the extent of politicizing
the price increase just to be able to throw some blames to the President. It’s more
than a peso increase per liter. People are complaining because whenever there is an
increase in gasoline there is a tendency of decreasing purchasing power and spend
less on the disposal of income.

Peace and Order

Peace and order is a vital element in maintaining economic development,

social order and political firmness. Through the help of the executive orders of the
government, it helps in maintaining social order, political stability.

A condition of peace and order enables the growth of funds, generates more
employment opportunities and attracts more tourists. Peace is the absence of
aggression and is characterized by healthy social and international connections,
fairness and parity.

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LEARNING ACTIVITY 1:
Direction: 1. Cut out pictures from old magazine and paste it on the space provided
for, or draw a picture that best describe each market structures and explain why?

1. MONOPOLY
(paste here)

2. OLIGOPOLY
(paste here)

3. MONOPOLISTIC
COMPETITION
(paste here)

4. PERFECT
COMPETITION
(paste here)

Rubric for Essay

Criteria Rating(5 is highest, 1 is smallest)
The pictures pasted were appropriate 5 4 3 2 1
for the topic being asked.
The explanation is concise and 5 4 3 2 1
relevant to the topics

33 | P a g e A P P L I E D E C O N O M I C - M . E S T U D I L L O
LEARNING ACTIVITY 2
I’m scrambled! Move Quickly!
Arrange the jumbled letters to form word/s related effects of contemporary
economic issues facing the Filipino Entrepreneurs. Write you answer on the
space provided.

GRAOINTMI
1. __________________

2. __________________ TENMYOLNUEMP

3.

4. __________________ GXEHANEC ATER

EPACE & REDRO

5. __________________

6. __________________ LOI EPRCI EASERCIN

References:
Bautista, Germelino. Economics and Society. (Quezon City: Ateneo de Manila University Press,
2013).
Introduction to Entrepreneurship by the Small Enterprises Research and Development Foundation
(SERDEF) in Cooperation with UP Institute for Small-Scale Industries. 2007.
http://www.serdef.org/
Morato, Eduardo A., Jr. PhD. Preparing for Entrepreneurship. (Legaspi Village, Makati: ACE
Cetner for Entrepreneurship and Management Education, 2008).
Morato, Eduardo A., Jr. PhD. A Trilogy on Entrepreneurship: Text and Workbook. (Legaspi
Village, Makati: ACE Center for Entrepreneurship and Management Education, 2015).
Villegas, Bernardo M., PhD. Guide to Economics for Filipinos. 7th ed. (San Antonio Village,
Makati: Sinagtala Publishers, 2010).
Windows to Entrepreneurship: A Teaching Guide by the Small Enterprises Research and
Development Foundation (SERDEF), Philippine Coyright. http://www.serdef.org/2013.

34 | P a g e A P P L I E D E C O N O M I C - M . E S T U D I L L O
 MIDTERM EXAMINATION in APPLIED ECONOMICS

NAME: ___________________________ COURSE/YR: _______ SCORE: _____

Direction: Choose the letter of the correct answer. Write your answers before the
number. Erasures means wrong.

1. What do you call the condition in which our wants are greater than our limited
resources?
A. Economics C. Scarcity
B. Opportunity Cost D. Trade-off
2. What do you call things that you gave up when you make a choice?
A. Choice C. problem
B. opportunity cost D. Trade-off
3. What do you call the application of economic principles and theories to real world
situations?
A. Applied Economics C. Macroeconomics
B. Economics D. Microeconomics
4. Which of the following is not a factor of production?
A. Capital C. Labor
B. Tax D. Land
5. What is supply?
A. It is a choice that you gave up C. It is the totality of our needs
B. It is the amount of goods for sale D. It refers to the economy
6. Which of the following classifications does not fall under underemployment?
A. Highly skilled but working in low paying jobs
B. Part-time workers who would prefer to be full time.
C. Without work and currently available for work
D. Workers who are highly skilled but working in low skill jobs
7. When does underemployment occur?
A. It is when a person does have work
B. It is when a person does not have work
C. It when a person does not work for a job that fits his/her skills.
D. It is when a person works for a job that fits his/her skills.
8. Which of the following works best for our country?
A. Decrease in the employment rate
B. Decrease in the underemployment rate
C. Increase in the underemployment rate
D. Increase in the unemployment rate
9. What is most likely to happen when the population continues to rise?
A. Employment rate will go up
B. Poverty rate will decrease
C. Resources will become scarce
D. Unemployment rate will go down

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10. According to Philippine Statistics Authority (PSA) what is the minimum age that
a Filipino must have in order to be classified as an unemployed person?
A. 13 years old
B. 14 years old
C. 15 years old
D. 18 years old
11. What kind of approach is used by economists to explain how the economy
works?
A. Collaborative B. experimental C. positive D. scientific
12. What are you experiencing when your wants are greater than your resources?
A. Poverty C. trade-off
B. Scarcity D. unemployment
13. What is the reason why we are studying economics?
A. Poverty C. trade-off
B. Scarcity D. unemployment
14. What type of analysis are economists concerned with in order to become
objective?
A. careful C. normative
B. negative D. positive
15. It called as behaviour of Filipinos to buy an item. What is this term?
A. Durable items C. Less valuable
B. Higher Price D. Not suitable for them
16. It is a condition that there is a direct relationship between the price of a
good and the quantity supplied of that good.
A. Law of Demand C. Supply Schedule
B. Law of Supply D. Surplus
17. It means that all other related variables except those that are being studied at
the moment and are held constant.
A. Ceteris Paribus C. Market Equilibrium
B. Income Effect D. Substitution Effect
18. It is a type of price where quantity demanded is equal to quantity supplied.
A. Economic price C. Normal price
B. Equilibrium price D. Unique price
19. There are Filipinos affected behaviours in buying an item when they see it in
the commercial on television. What is this term?
A. Advertisement C. Preferences
B. Demand D. Value of Money
20. It called as behaviour of Filipinos to buy an item. What is this term?
A. Durable items C. Less valuable
B. Higher Price D. Not suitable for them

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21. It called as behaviour of the Filipinos in buying product that is affordable.
What is this term?
A. Advertisement C. Supply
B. Preferences D. Value of Money
22. When there is an increase of price for white sugar, customers switch to
brown sugar as an alternative. What type of good is the scenario classified?
A. Complement goods C. Substitute goods
B. Important goods D. Valuable goods
23. Which type of market structures which is more competitive and many
sellers/producers competing each other with the same products?
A. Monopoly C. Oligopoly
B. Monopolistic competition D. Perfect competition
24. Which type of market structures which is less competitive and only one few firm
enjoys the activity in the market?
A. Monopoly C. Oligopoly
B. Monopolistic competition D. Perfect competition
25. It is payment for the use of land or buildings belonging to others.
A. Investments C. Fees
B. Rentals D. Taxes
26. It is an asset or something we purchased in the past and hope to will have
an income in the future.
A. Building C. Land
B. Investments D. Market
27. It can increase the cost of business operations and can threaten the
profitability of business enterprises at their initial stage of operations.
A. Cost of Sales C. Price
B. Expenditures D. Taxes
28. It is the amount of foreign currency per unit of local currency.
A. Baht C. Exchange rate
B. Dollar D. Yen
29. It is an essential ingredient in maintaining economic development, social
Order and political stability.
A. Executive order C. Peace and order
B. Law and order D. Policy maker
30. Which organizational characteristics that establishes interrelationships
between the buyers and sellers in a particular market?
A. Market Structures C. Products
B. People D. Seller

GOD BLESS!!

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