Yllana Bay View College, Inc.

“The Builder of Future Leaders”

Senior High School Department
Enerio Street, Balangasan District, Pagadian City
Contact Number: (062) 2154176 / Email Address: [email protected]

INTERACTIVE MODULE
FOR

APPLIED ECONOMICS

ABM MODULE

ANN MARGARET A. DELA

FUENTE
Educ’l Attainment: BS in Accounting Technology (BSAcT)
Subject: Applied Economics
Topic: Industry and Environmental Analysis: Business
Opportunity Identification

TNT: 09460677235

Margaret Dela Fuente

[email protected]

Module Content:
 a. Principles, Tools, and Techniques

LEARNING OUTCOME/COMPETENCIES
The learners…
 Identify and explain different principles, tools and techniques in creating a business
 Distinguish the different services/products of business and industry in the locality.

Introduction to Applied Economics

I. Pretest (True of False)

Direction: Write the correct answer on a Long bond paper/Yellow pad paper/Activity Notebook.

1. The sole proprietor enjoys exclusive control and decision-making as well as gets all the profits
earned but he also shoulders all losses.
2. The sole proprietor has a limited liability.
3. A shareholder is personally liable for the debts, obligations, or acts of the corporation.
4. All owners share management of the business and each is personally responsible for and must
assume the consequences of the actions of the other partners is called the General Partnership.
5. Directors and officers can bear liability for their involvement with the corporation.
6. Cooperative members have no say in decision-making with one vote per member regardless of
number of shares held
7. Corporation normally can exist for a life of 50 years, which is renewable for another 50 years.
8. Large Scale Business has total assets from P15,000,0001 to P60,000,000.
9. For the small business, total assets are from P1,500,001 to P15,000,000.
10. A partnership is an agreement in which two or more persons combined their resources in
business with a view to making profit.
11. The main objective of business entities is to provide quality products and services to
consumer.
12. Owners of the corporation have unlimited liabilities.
13. Limited partners take no part in control or management
14. Corporation is the most complicated type of business.
15. the business must be registered with the appropriate government agencies.

II. Class Activity

Direction: Kindly write your answer in a long bond paper or Yellow Pad paper/Activity
Notebook.

1. Think and decide a kind of business that you want to have someday and choose one way
of business organization and explain why you choose it.

III. Instruction on the Proper use of this module:

 1. Follow closely the instruction in every activity.
2. Be honest in answering and checking your exercises.
3. Answer the pre-test before going over the materials. This is to find out what you already
know.
4. Answer the exercises encountered at the end of every lesson.
5. Review the lesson that you think you failed to understand.
6. Seek assistance from your teacher if you need help.

IV. Introduction
A business is just a small portion of an industry. It is an undertaking by a person or
a group of persons who are partners, or of stockholders who own a juridical entity known as
a corporation. Its main objective is to earn profit for the owners. An industry, on the other
hand, is the aggregation of the different businesses engaged in the same line of undertaking.
For example, Celine is a business firm that is part of the country’s shoe industry.
For a person to put up a business, it is essential that an industry analysis first be
made. Commonly used is a system known as the SWOT analysis, which lists the strengths,
weaknesses, opportunities, and threats that the business faces.

Business Organization
From a legal point of view, there are four ways to form a business:

1. Sole Proprietorship
This is generally the simplest way to set up business. A Sole proprietorship is owned
by single individual who is singly responsible for running the business and is accountable for
all debts and obligations related to business. The sole proprietor enjoys exclusive control and
decision-making as well as gets all the profits earned but he also shoulders all losses and has
unlimited liability which means payment of his loans will extend to his personal assets.

2. Partnership
A partnership is an agreement in which two or more persons combined their
resources in business with a view to making profit. A partnership agreement is drawn up and
profits are divided among the partners according to the terms of agreement. There are two
types of partnership:

a. The General Partnership. All owners share management of the business and each is
personally responsible for and must assume the consequences of the actions of the other
partners. All other partners have unlimited liability which means loan payment will extend to
their personal property.
b. The limited partnership. Some members are general partners who control and manage the
business and may be entitled to a greater share of the profit while other partners are limited
and contribute only capital, take no part in control or management, and are liable for debts to
a specific extent only.
 3. Corporation
A corporation is a legal entity that is separate from its owners, the shareholders. No
shareholder is personally liable for the debts, obligations, or acts of the corporation. Directors
and officers can bear liability for their involvement with the corporation. Corporation
normally can exist for a life of 50 years, which is renewable for another 50 years. Owners
have limited liabilities. However, corporations are burdened by heavy taxes.

4. Cooperative
A cooperative is an entity organized by people with similar needs to provide
themselves with goods or services or jointly use available resources to improve their income.
Cooperative members have an equal say in decision-making with one vote per
member regardless of number of shares held, there is open and voluntary membership and
surplus earning is returned to the members according to the amount of their patronage.

SMALL, MEDIUM, and LARGE SCALE BUSINESS

It is also important to study the classification of businesses as to the size based on the worth
of the business assets. In the Philippines, total assets for micro business are worth below P1,500,001.
For the small business, total assets are from P1,500,001 to P15,000,000. Medium Business has total
assets from P15,000,0001 to P60,000,000. Any business with assets in excess of P60,000,000 is
considered large scale.
For any form of business organization, the business must be registered with the appropriate
government agencies. In the case of sole proprietorships and partnerships, 100% must be owned and
capitalized by Filipinos. For corporations, at least 60% of the outstanding capital stocks must be
owned by Filipino citizens. Business activity conducted may be within major sectors of industry
services, practice of profession, or operation of tourism-related businesses and agri-business.
The choice of which form of business organization may be personal preference of the owner,
based on his objectives, his available resources, and the scope of operations.

Activity 1.2: Write your answers on a Long Bond Paper/Yellow Pad paper.

1. Distinguish between a business and an industry.

2. What are the foremost regions where tourism-related services can operate? Why?

V. NEW LEARNINGS
 A Sole proprietorship is owned by single individual who is singly responsible for running
the business and is accountable for all debts and obligations related to business.
 A partnership is an agreement in which two or more persons combined their resources in
business with a view to making profit.
 A corporation is a legal entity that is separate from its owners, the shareholders.
 A cooperative is an entity organized by people with similar needs to provide themselves
with goods or services or jointly use available resources to improve their income.

VI. WHAT CAN I DO?

 Direction: Write your answers on a Long bond paper/yellow paper/activity notebook together with your
previous answers.

1. “The choice of which form of business organization may be personal preference of the owner,
based on his objectives, his available resources, and the scope of operations.” Elaborate the
passage. Minimum of 50 words and maximum of 100 words.

B. TRUE OR FALSE

1. The sole proprietor enjoys exclusive control and decision-making as well as gets all the profits
earned but he also shoulders all losses.
2. The sole proprietor has a limited liability.
3. A shareholder is personally liable for the debts, obligations, or acts of the corporation.
4. All owners share management of the business and each is personally responsible for and must
assume the consequences of the actions of the other partners is called the General Partnership.
5. Directors and officers can bear liability for their involvement with the corporation.
6. Cooperative members have no say in decision-making with one vote per member regardless of
number of shares held
7. Corporation normally can exist for a life of 50 years, which is renewable for another 50 years.
8. Large Scale Business has total assets from P15,000,0001 to P60,000,000.
9. For the small business, total assets are from P1,500,001 to P15,000,000.
10. A partnership is an agreement in which two or more persons combined their resources in
business with a view to making profit.
11. The main objective of business entities is to provide quality products and services to
consumer.
12. Owners of the corporation have unlimited liabilities.
13. Limited partners take no part in control or management
14. Corporation is the most complicated type of business.
15. the business must be registered with the appropriate government agencies.

BIBLIOGRAPHY

APPLIED ECONOMICS by Rosemary P. Dinio, PhD and George A. Villasis

Book of Economics (New Edition) by Gerardo P. Sicat

https://www.investopedia.com/articles/economics/11/intro-supply-
demand.asp