CONTENT STANDARDS

Various socioeconomic impacts on business on the following

sectors :
1. Customers
2. Supplier and investors
3. Government
4. Households
5. International trade
LEARNING COMPETENCIES
1. Identify and explain the various socioeconomic
factors affecting business and industry
2. Analyze and evaluate the viability of a business and
its impact on the community.
3. Formulate recommendations and strategies on how
to minimize and maximize a business negative and
positive impact, respectively.
SOCIOECONOMIC IMPACT STUDY
What is a Customer?
A customer is an individual or business that
purchases the goods or services produced by a
business. Attracting customers is the primary goal of
most public-facing businesses, because it is the
customer who creates demand for goods and services.
Supplier
A supplier, also called a vendor, is a person or company that
provides goods and/or services to other companies as one of the
contributors to the development process on the way to the ultimate
customer.
A supplier could produce and deliver raw materials, partially
assembled components, custom parts, or any consumable supplies.
A supplier could provide labor, consulting or management
services.
 Capital refers to the financial value of assets, such as funds held in deposit
accounts, as well as the tangible machinery and production equipment used in
environments such as factories and other manufacturing facilities. Additionally,
capital includes facilities, such as the buildings used for the production and
storage of the manufactured goods. Materials used and consumed as part of the
manufacturing process do not qualify.

Income is money that an individual or business receives in exchange for providing a

good or service or through investing capital. Income is consumed to fuel day-to-day
expenditures. Most people age 65 and under receive the majority of their income
from a salary or wages earned from a job. Investments, pensions and social security
are primary sources of income for retirees. In businesses, income can refer to a
company's remaining revenues after all expenses and taxes have been paid. In this
case, it is also known as "earnings". Most forms of income are subject to taxation.
Government
A group of people that governs a
community or unit. It sets and administers
public policy and exercises executive, political
and sovereign power through customs,
institutions, and laws within a state. A
government can be classified into many
types--democracy, republic, monarchy,
aristocracy, and dictatorship are just a few.
 Tax revenue is defined as the revenues collected from taxes on income
and profits, social security contributions, taxes levied on goods and
services, payroll taxes, taxes on the ownership and transfer of property,
and other taxes. Total tax revenue as a percentage of GDP indicates the
share of a country's output that is collected by the government through
taxes. It can be regarded as one measure of the degree to which the
government controls the economy's resources. The tax burden is
measured by taking the total tax revenues received as a percentage of
GDP. This indicator relates to government as a whole (all government
levels) and is measured in USD, USD per capita, percentage of GDP and
annual growth rate.
 Over the past years there has been a
lot of Poverty Alleviation Programs designed to
break the cycle of poverty in many households
and communities in the world. The result is
remarkable, but there is still a lot to be done.

Poverty alleviation involves the

strategic use of tools such as education,
economic development, health and income
redistribution to improve the livelihoods of the
worlds poorest by governments and
internationally approved organizations. They
also aim at removing social and legal barriers
to income growth among the poor.
 Basic services such as electricity and energy, water and sanitation,
refuse and waste removal are critical services to improve the lives of
people.
There is a general consensus that basic social services are the building
blocks for human development. Indeed, they are now accepted as fundamental human
rights. But there is a widening gap between this consensus and the reality of public
spending on basic services in the developing world. Governments often make proud
claims about how much they spend on health and education services, when in fact not
all such services benefit the poor, as the report demonstrates. By denying citizens
access to the basic social services primary health care, clean water and proper
sanitation and basic education governments are violating the human rights of their
citizens.
Households
Households have changed considerably in economic history. Earliest
households were totally self-sufficient. They made what they consumed and
consumed what they produced to a large extend. Specialization took place
within the household.

Are households self-sufficient today? How are they different?

- Very few people produce their own food. With the increase in agricultural
productivity, fewer people are needed to produce the food to feed a nation.
- People work away from the home.
How have households changed since the 1950s?
- Women working: 1950 15% of married women with children under 18
were in the labor force. Today more than 1/2 married women with young
children are in the labor force.
- Higher education among women, growing demand for labor,
increased the opportunity cost of staying at home. Opportunity cost-
define.
- Two-earner households- less production occurs at home, more goods
and services demanded from the market.
A. Households are rational utility maximizers.

Economists assume that individuals, and thus households, attempt

to maximize their utility.
UTILITY: The satisfaction received from consumption; the sense of well
being. Utility is subjective (not objective). One household may have
different goals than another.
Rational: They act in their own best interest (in the interest of their own
goals- maximizing their utility), would not make choices that would
make them worse off.
B. Households as Demanders

Personal income is allocated among three uses:

1. savings
2. consumption
3. taxes
What does 'Standard Of Living' mean
A standard of living is the level of wealth, comfort, material
goods and necessities available to a certain socioeconomic class or
a certain geographic area. The standard of living includes factors
such as income, gross domestic product, national economic growth,
economic and political stability, political and religious freedom,
environmental quality, climate, and safety. The standard of living is
closely related to quality of life.
What is 'Full Employment'
Full employment is an economic situation in which all available
labor resources are being used in the most efficient way possible. Full
employment embodies the highest amount of skilled and unskilled
labor that can be employed within an economy at any given time. Any
remaining unemployment is considered to be frictional, structural or
voluntary.
International trade
International trade allows us to expand our markets for both goods and
services that otherwise may not have been available to us.

Exports are the goods and services produced in one country and purchased by citizens
of another country. An import is a good or service brought into one country from
another. The word "import" is derived from the word "port," since goods are often
shipped via boat to foreign countries. Along with exports, imports form the backbone
of international trade; the higher the value of imports entering a country, compared to
the value of exports, the more negative that country's balance of trade becomes.