Module 4

P.88 “What Have I Learned So Far?”

Differentiate the different market structures in the economy by
describing and contrasting the degree of competition, number of
firms, bargaining power of consumers, and barrier to entry.
>There are quite a few different market structures that can characterize
an economy. There are four types of market structure namely perfect
competition, monopolistic competition, oligopoly, and monopoly. Each of
them has their own set of characteristics and assumptions, which in turn
affect the decision making of firms and the profits they can make.Perfect
competition describes a market structure, where a large number of small
firms compete against each other with homogenous products. Meanwhile,
monopolistic competition refers to a market structure, where a large number
of small firms compete against each other with differentiated products. An
Oligopoly describes a market structure where a small number of firms
compete against each other. And last but not least a monopoly refers to a
market structure where a single firm controls the entire market.
The idea of perfect competition builds on a number of assumptions: (1) all
firms maximize profits (2) there is free entry and exit to the market, (3) all
firms sell completely identical (i.e. homogenous) goods, (4) there are no
consumer preferences. By looking at those assumptions it becomes quite
obvious, that we will hardly ever find perfect competition in reality.Probably
the best example of a market with almost perfect competition we can find in
reality is the stock market.Monopolistic competition builds on the following
assumptions: (1) all firms maximize profits (2) there is free entry and exit to
the market, (3) firms sell differentiated products (4) consumers may prefer
one product over the other. This market structure will no longer result in a
socially optimal level of output, because the firms have more power and can
influence market prices to a certain degree.An example of monopolistic
competition is the market for cereals. There is a huge number of different
brands for example Cap’n Crunch, Lucky Charms, Froot Loops, Apple Jacks.
Most of them probably taste slightly different, but at the end of the day, they
are all breakfast cereals.The oligopolistic market structure builds on the
following assumptions: (1) all firms maximize profits, (2) oligopolies can set
prices, (3) there are barriers to entry and exit in the market, (4) products may
be homogenous or differentiated, and (5) there is only a few firms that
dominate the market. As a rule of thumb, we say that an oligopoly typically
consists of about 3-5 dominant firms.This market is dominated by three
powerful companies: Microsoft, Sony, and Nintendo.The following
assumptions are made about monopolies: (1) the monopolist maximizes
profit, (2) it can set the price, (3) there are high barriers to entry and exit, (4)
there is only one firm that dominates the entire market.
P.89” Beyond Walls 4.1”

Read the government press release at

http://psa.gov.ph//sites/default/files/attachments/nap_release/press%
20release%20Q12016.pdf and answer the questions that follow.
1. What is the article about?
>Philippine Economy posts 6.9 percent GDP growth

2. Which sector is the biggest contributor to country’s economic

growth? Which sector experienced decline?
>The main driver of GDP growth for the quarter was the Industry Sector
which accelerated to 8.7 percent from 5.3 percent posted last year. On the
other hand, the Agriculture sector declined by 4.4 oercent, the fourth
consecutive quarterly decline since the second quarter of 2015, from a
growth of 1.0 percent in the frst quarter of 2015.

3. Explain the relevance of this news to businesses and to

consumers.
>As economic growth increases the business income and consumers
salaries increases too.
P.92”What Have I Learned So Far?”
Use the given data to calculate the labor force, unemployment rate,
and labor force participation rate:

GIVEN:

Employed individuals= 35 800 000

Unemployed individuals= 8 500 000
Working age population= 50 000 000
1. Labor force
> 94,300,000

2. Unemployment rate
> 9.01378579%

3. Labor force participation rate

>188.6%
P.104”Beyond walls 4.2”

You are the governor of the BSP. The newly elected president wants
to have a meeting with you together with his economic goals are
aligned. Among the agenda is to discuss the continued depreciation
of the Philippine peso. Being in charge of the country’s monetary
policies, use any of the monetary instruments, including graphs, to
explain to the president how any of the monetary tools can be used to
strengthen the local currency. The graph must be clear with all
variables labeled correctly.
>
P.107”What Have I Learned So Far?”
Analyze the effect on equilibrium quantity and demand of an increase
in real estate taxes, which are typically shouldered by consumers.
Explain and illustrate the effect using a graph.
>
P.107”Beyond walls 4.3”
You are the manager of a small money changing establishment. You
noticed that there was a decline in your daily transactions recently.
Your boss suspects that customers are choosing to exchange their
money at the banks. To better compare and adjust your rates
accordingly, you were asked to conduct a survey of at least four
banks nearest to your location. Gather data on their peso-dollar
exchange rates--- both buying and selling rates. Analyze your data to
find out which bank provides the most attractive exchange rate and
how much is the rate. Present your data in tabular form for easier
comparison. (Note: Exchange rate information is typically displayed
daily inside banks for customers’ reference.)
Module 5
P.110”What Have I Learned So Far?”
1. Define entrepreneurship in your own words.
> Entrepreneurship is the process of creating new business and the
willingness to develop, organize and manage a business.
2. Differentiate an entrepreneur from an employee.
> Entrepreneur is a person who organizes and operates a business or
businesses, taking on greater than normal financial risks in order to do so
while employee is a person employed for wages or salary, especially at
nonexecutive level.
P.112 “What Have I Learned So Far?”
Analyze whether each of the following items is considered a
disruptive innovation. If so, what product or industry did it displace?
1. Digital Camera- Disruptive innovation,Digital Camera Industry

2. Automobile- Disruptive innovation, automotive industry

3. Credit Card- Not

4. Online Shopping- Disruptive innovation, shopping Industry

5. Flash Drive- Disruptive innovation, USB

P.113”Beyond walls 5.1”
Read the article entitled “Top 10 Successful Entrepreneurs in
Philippine History” at
http://tycoon.ph/top-10-successful-entrepreneurs-philippines-story/
and answer the questions that follow.
1. Whose story inspired you the most? Why?
> Mr. Henry Sy of Shoe Mart because even though he faced a lot of
problems he had a way to be successful in his business.

2. What common traits of the successful Filipino entrepreneurs did

you observe?
> They are all risk takers and and they see the opportunities that will be
more helpful in their business even their business is in critical situation.

3. Identify the type of market structure(i.e., perfect competition,

monopolistic, oligopolistic, monopoly) of each of the business
ventures.
Perfect- Lamoiyan Corp.,
Monopolistic- Shoe Mart,Jollibee,Zest-O
Oligopolistic- Cebu Pacific
Monopoly-Mercury Drug Store
P.115”What Have I Learned So Far?”
Cite examples of local businesses in your community for each
business type.

Sole Proprietorship
 Aurings’ Store
 JC Parallon Store
 3J’s Lomi House

Partnership
 ABM Store

Corporation
 Water Too Big
P.117-118”Beyond Walls 5.2”
Read the article entitled “The Rise of Crowdsourcing” at
http://www.wired.com/2006/06/crowds/ and answer the questions that
follow.

1. What is the article about?

>Claudia Menashe needed pictures of sick people. A project director at
the National Health Museum in Washington, DC, Menashe was putting
together a series of interactive kiosks devoted to potential pandemics like
the avian flu. An exhibition designer had created a plan for the kiosk itself,
but now Menashe was looking for images to accompany the text. Rather
than hire a photographer to take shots of people suffering from the flu,
Menashe decided to use preexisting images—stock photography, as it's
known in the publishing industry.

2. How do you feel about the invention of crowdsourcing?

> I feel happy because crowdsourcing may help all of us to have
interaction with one another and it will help us to be more knowledgeable.

3. Cite the benefits and disadvantages of crowdsourcing.

> Advantages: Cost-effective: the company only pays for bugs which
are found instead of an hourly or salaried rate which professional testers
would receive. Vast range of users provide huge diversity in their
experiences. Allows for testing with all kinds of different parameters, such
as with different connection speeds, browsers, and devices to which the
core testing team may not have access. Larger group is more likely to find
reproducible bugs than a handful of testers. Lack of bias towards the
company can be expected of testers .Monetary value of both of the above=
more thorough testing for an equal price range in a shorter amount of time
sans contract and overhead
Disadvantages: Confidentiality is compromised by having testing
performed by a large group who may or may not have much loyalty to the
brand/product. Communication between testers can be difficult due to time
or language barriers. Test coverage can be more difficult to guarantee and
can therefore require more managerial oversight to ensure thorough bug
identification. Because payment usually depends on the number of bugs
found and not their severity, testers may seek out and identify many small,
less-important bugs rather than devote a lot of time and effort to finding one
or two large, debilitating bugs .This, combined with the exploratory nature of
crowdsourcing, means that it can be difficult to ensure that the entire
product has been tested thoroughly enough to ensure usability

P.118”What Have I Learned So Far?”

Explain the different sources of financing available to Filipino
entrepreneurs.

 Personal investment
When starting a business, your first investor should
be yourself—either with your own cash or with collateral on your assets.
This proves to investors and bankers that you have
a long-term commitment to your project and that you are ready to take
risks.

 Love money
This is money loaned by a spouse, parents, family or friends. Investors
and bankers considers this as "patient capital", which is money that will be
repaid later as your business profits increase.

 Venture capital
venture capitalists take an equity position in the company to help it carry
out a promising but higher risk project. This involves giving up some
ownership or equity in your business to an external party. Venture
capitalists also expect a healthy return on their investment, often generated
when the business starts selling shares to the public.

 Bank loans
Bank loans are the most commonly used source of funding for small
and medium-sized businesses. Consider the fact that all banks offer
different advantages, whether it's personalized service or customized
repayment. It's a good idea to shop around and find the bank that meets
your specific needs.
Module 6
P.140-141”Beyond Walls 6.1”
Go to www.adb.org/countries/philippines/economy#tabs-0-0 and read
the article on Philippine economy. The Asian Development Bank (ADB)
provides forecasts on country’s GDP growth and inflation. Use data to
answer the following:
1. What are the forecasts on the GDP growth rates for 2016 and 2017?
> For the year 2016 the GDP growth rate is 6.9% while in 2017 it
decreases .2%, 6.7%.

How do these forecasts compare with those of the other Southeast

Asian countries included on the list?
> That the Philippine GDP growth rate is in the average level.

2. What are the forecasts on the inflation rates for 2016 and 2017?
> For the year 2016 the inflation rate is 1.3% while in 2017 it increases
1.6%, 2.9%.

How do these forecasts compare with those of the other Southeast

Asian countries included on the list?(See the second tab.)
> That the Philippines rank top 2 when it comes to inflation rate.
3. Rank the countries on the list from highest to lowest based on the
GDP rate. What do you notice?
> That the Philippine GDP growth rate is in the average level while
others have the higher or lower GDP growth rate.

4. Rank the countries on the list from the highest to the lowest based
on inflation rate. What do you notice?
> That the Philippines rank top 2 when it comes to inflation rate while
others have the higher or lower inflation rate.

5. Do some research on the countries that ranked higher than the

Philippines. Why do they have higher GDP and Inflation forecasts?
>

What strategies are in place for the other countries and what can
the Philippines learn from them?
>

P.155”Beyond Walls 6.2”

Read a summary of Intended Nationally Determined Contributions
(IDNC’s) submitted by countries as prerequisite to the UN Climate
Change Conference in Paris in 2015 at
http://www4.unfccc.int/submissions/indc/Submission%20Pages/subm
issions.aspx. Then answer the following questions.
1. What do you think of the INDC pledged by the Philippines?
>The Philippine INDC is premised on the philosophy of pursuing climate
change mitigation as a function of adaptation. As a country highly
vulnerable to climate and disaster risks, mitigation measures as presented
in the INDC will be pursued in line with sustainable development and a
low-emission development that promotes inclusive growth.

2. How do you think this compares to that of other countries?

>its responsibility to contribute its fair share in global climate action,
particularly in the effort to realize the ultimate aim of the Convention to
avoid dangerous anthropogenic interference with the climate system.
Based on fair share, the country will commence a broad consultative
process to determine the propriety of the need to peak its emissions taking
into consideration the country’s economic growth and development. The
country however views the need to peak its emissions as an opportunity to
transition as early as it can to an efficient, resilient, adaptive, sustainable
clean energy-driven economy, and it is determined to do so with partners
from the global community.

3. Do you think this is achievable? Why or why not?

> This project is achievable if and only if the whole country will
participate. If not then may be.

4. Propose a solution that will help the government achieve this goal.
> They need to conduct conference to the persons whose involved in
this goals.
P.157-158”What Have I Learned So Far?”
Based on your understanding, explain the primary function(s) of these
government agencies in the Philippines.
1. BSP- The BSP formulates and implements monetary policy aimed at
influencing money supply consistent with its primary objective to maintain
price stability.
2. DENR- The Department of Environment and Natural Resources (DENR)
shall be the primary government agency responsible for the conservation,
management,protection, proper use and sustainable development of the
country's environment and natural resources.
3. DPWH- DPWH is currently responsible for the planning, design,
construction and maintenance of infrastructure, especially the national
highways, flood control and water resources development system, and
other public works in accordance with national development objectives.
4. NEDA- The NEDA is the country's premier social and economic
development planning and policy coordinating body primarily responsible
for formulating continuing, coordinated and fully integrated social and
economic policies, plans and programs.
5. NSO- The primary function of the National Statistics Office is to collect,
compile and release official statistics that are produced “subject to the
principles of reliability, objectivity, relevance, statistical confidentiality,
transparency, specificity and proportionality”.
6. DOST- The Philippines' Department of Science and
Technology (abbreviated as DOST; Filipino: Kagawaran ng Agham at
Teknolohiya), is the executive department of the Philippine Government
responsible for the coordination of science and technology-related projects
in the Philippines and to formulate policies and projects in the fields of
science and technology in support of national development.
7. BIR- The Bureau of Internal Revenue is mandated by law to assess and
collect all national internal revenue taxes, fees and charges, and to enforce
all forfeitures, penalties and fines connected therewith, including the
execution of judgements in all cases decided in its favor by the Court of Tax
Appeals and the ordinary courts.
8. PSA- The PSA Board shall have the following powers and functions: a)
Establish appropriate mechanisms to promote and maintain an efficient and
effective statistical system in the government;. A majority of the members of
the PSA Board shall constitute a quorum in the conduct of its day to day
affairs and business.
9. DOH- It is responsible for ensuring access to basic public health services
to all Filipinos through the provision of quality health care and regulation of
providers of health goods and services. Given the mandate, DOH is both a
stakeholder in the health sector and a policy and regulatory body for health.
10. LGUs- Local government serves a two-fold purpose. The
first purpose is the administrative purpose of supplying goods and services;
the other purpose is to represent and involve citizens in determining
specific local public needs and how these local needs can be met.

P.157”Beyond Walls 6.3”

You are the head of an industrial company’s corporate social
responsibility department. Your company is getting a lot of pressure
from the public sector to move into renewable energy energy instead
of burning fossil fuels to power your operations. In preparation for a
meeting with government officials, you were asked by your CEO to
prepare a CSR plan outlining your company’s commitment toward
sustainable energy and cleaner environment. Do a research; and
include projections, costs, and the estimated impact of your proposed
plan(s).
P.160”What Have I Learned So Far?”
Refer to the Duterte administration’s 10-point socioeconomic agenda
in figure 6.3 and answer the following questions:
1. Evaluate each item to identify which component of the PESTLE
approach of macroenvironment analysis each plan supports.
1-Political
2-Political
3-Economic
4-Economic
5-Social
6-Environmental
7-Legal
8-Technological
9-Social
10-Legal

2. Which Industries does each item primarily affect?

>Abortion Policy,Advertising Relations,Agribusiness,Alcoholic
Beverages,Banks, savings&loans,Computer Software,Defense
Electronics,Environment,Finance, Insurance& Real Estate.

3. How does each item affect the industries identified in number 2?

Support your answer with examples.
>Because of the new rules implemented by the president and it has a
big impact in industries.
Module 7
P.168”What Have I Learned So Far?”
1. In your own words, differentiate the three main sectors of the
Philippine Economy. Cite examples of industries under each sector.
>The three main sectors of the Philippine economy are
industry,service,and agriculture. Industry refers to the production of an
economic good or service within an economy.The service sector provides
a service, not an actual product that could be held in your
hand.Agriculture is the science and art of cultivating plants and livestock.
Example of agriculture-Secondary crops,Services-Housekeeping and
industry-Manufacturing Industry.

2. In your assessment, to which sector do most of the businesses in

your locality belong?
>Service Sector because there’s a lot of businesses here offering
services.
P.169”Beyond Walls 7.1”
Visit http://industry.gov.ph/employment-by-sector/ and answer the
questions that follow.
1. Summarize the data and trends on the employment structure of the
Philippines.
>That in the services sector there’s a lot of employment than agriculture
and industry even in the numbers of employed persons.

2. What can you say about the employment structure of the country?
Provide your insights.
> Services sector have the highest employed persons while agriculture
is on average level and industry have the lowest. And way back 2016 it is
more number of employed person than the other year.
P.171”What Have I Learned So Far?”
Classify the following goods as public, private, club, or common
goods.
1. Fireworks display- Public
2. Higher Education- Public
3. Personal Computer- Private
4. Gym Membership- Private
5. Gasoline- Common
6. National Defense- Public
7. Cable Television- Club
8. Smartphone- Smartphone
9. Light Trail Transit- Private
10. Street Light- Public
P.178”What Have I Learned So Far?”
Cite an example of a local industry with high barriers to entry. Explain
the factor(s) contributing to the high barriers.
>Tap Water,This means as firms produce more their average costs fall.
Therefore, it is difficult for new, small firms to enter the market and be
competitive.Barriers to entry are factors that prevent a startup from entering
a particular market. As a whole, they comprise one of the five forces that
determine the intensity of competition in an industry (the others are industry
rivalry, the bargaining power of buyers, the bargaining power of
suppliers and the threat of substitutes). The intensity of competition in a
certain field determines the attractiveness of a market (that is, low intensity
means that the market is attractive).Factors involved as barriers to entry
may be either innocent (for example, the dominating company’s absolute
cost advantage) or deliberate (for example, high spending on advertising by
incumbents makes it very expensive for new firms to enter the market).
P.188”What Have I Learned So Far?”

Categorize each of the following as strength, weakness, opportunity,

or threat. Provide a brief explanation to support your answer.

1. Appreciation of the peso exchange rate

>Strength because that means the value of peso is much higher than
the others.

2. Wide Distribution Channels

>Opportunity bacause the wider the distribution the higher the income.

3. High Operating Costs

>Weakness, even if your business is profitable if the operation costs

highly it’s nonsense.

4. Imposition of import qoutas

>Threat, because we cannot meet the qouta and if it still continue the
investors maypull out their share in the company.

5. Affordable Product Prices

>Strength, because our customers will be willing to comeback if our

price is competitive but affordable.
P.189”Beyond Walls 7.2”

You are a freelance management consultant. A business owner in

your area has no internal resources that can be used to conduct
industry analysis, so she hired you to conduct the study and analysis.
You were asked to include a brief background of the business and use
the SWOT framework in your study. Identify at least three factors
under each element and provide a matrix summary of the factors
similar to figure 7.14. Discuss each factor justifying the categorization
into strength, weakness, oppurtinity, or threat. It is essential that your
output is accurate and satisfies the requirements of the owner.

>