Applied Economics Exam Reviewer PDF

APPLIED ECONOMICS ECON FINAL TERM EXAM REVIEWER CONTEMPORARY ECONOMIC ISSUES FACING THE FILIPINO ENTREPRENEUR INVESTMENT AND INTEREST RATE RENTALS MINIMUM WAGE TAXES INVESTMENT AND INTEREST RATE Interest rate is the price of the credit, which is often referred to as loanable funds. It becomes a prob...

APPLIED ECONOMICS ECON FINAL TERM EXAM REVIEWER CONTEMPORARY ECONOMIC ISSUES FACING THE FILIPINO ENTREPRENEUR INVESTMENT AND INTEREST RATE RENTALS MINIMUM WAGE TAXES INVESTMENT AND INTEREST RATE Interest rate is the price of the credit, which is often referred to as loanable funds. It becomes a problem when Filipino entrepreneurs struggle due to a lack of understanding of loan mechanisms, leading to financial difficulties during payment periods. RENTALS Rent is the fee for using property, often associated with land as a fixed production factor due to its scarcity. It becomes a problem when rent increases and product prices cannot adjust, achieving a viable return on investment may be challenging. The inflation rate impacts rent prices and land use demand, while some renters set prices. MINIMUM WAGE A wage is a fixed amount of money paid regularly, usually weekly, to an employee who undertakes physical tasks that demand skills or strength, rather than a role that necessitates a college education. Determinants of wage: supply and demand for labor, productivity, skills and education, bargaining power, government regulations, and cost of living. TAXES Taxes are mandatory contributions levied on individuals or corporations by a government entity—whether local, regional, or national. Types: Income tax, payroll tax, corporate tax, sales tax, property tax, tariff, estate tax, etc. PRINCIPLES IN CREATING A BUSINESS 1. Scalability - A business must maintain or enhance performance as sales volume grows. 2. Big ideas - A business must formulate a strategy to enhance economic growth. 3. Systems - A business must have a system where every component plays a role in determining its success or failure. 4. Sustainability - A business must be sustainable and dynamic, thriving in all economic conditions by providing unique value to customers for survival. 5. Growth - Sustained business growth is vital to prevent stagnation, maintain product/service quality, improve customer service, and boost employee morale. PRINCIPLES IN CREATING A BUSINESS 6. Vision - A business should embody the higher purpose it was founded on, the vision it aims to showcase, and the mission it strives to accomplish. 7. Purpose - A business must have a clear image of its future envisioned by its creator. 8. Autonomy - A business is a separate entity from the owner's personal life. 9. Profitability - A business must drive economic outcomes and profitability as an economic entity. 10. Standards - A business must set standards for success, encouraging all to exceed previous benchmarks. MARKET STRUCTURE PERFECT COMPETITION In perfect competition, numerous small companies sell similar products, lack price influence, and can freely enter or exit the market. Consumers have full knowledge of products and prices. MONOPOLISTIC COMPETITION Monopolistic Competition combines monopoly and competitive market traits. Sellers differentiate goods and compete based on quality and branding. OLIGOPOLY An oligopoly market involves a few large companies selling similar or different products. Competitive strategies are interdependent, with actions like price changes influencing others. MONOPOLY In a monopoly market, a single company dominates the industry with no competitors, controlling prices and market entry due to factors like resource ownership, patents, and high setup costs. SOCIOECONOMIC IMPACT ASSESSMENT SEIA is the systematic analysis used to identify and evaluate a proposed development's potential socio-economic and cultural impacts on the lives and circumstances of people, their families, and their communities. SEIA can assist the developer, and other parties to the EIA process, in finding ways to reduce, remove, or prevent these impacts from happening. VALUED SOCIOECONOMIC COMPONENTS AND RELATED ISSUES HEALTH AND WELL-BEING Individual and population health Community and cultural group cohesion Family cohesion Cultural maintenance SUSTAINABLE WILDLIFE HARVESTING, LAND ACCESS AND USE Hunting, trapping, and gathering – traditional economy Recreational and traditional economy – access to land Value of alternative land uses (e.g. tourism vs. hunting vs. industry) POPULATION SUSTAINABILITY In- and out-migration effects Change in the social and cultural makeup of affected communities PROTECTING HERITAGE AND CULTURAL RESOURCES The aesthetic, cultural, archaeological, and/or spiritual value of places Maintenance of traditional language, education, laws and traditions EQUITABLE BUSINESS AND EMPLOYMENT OPPORTUNITIES Local, regional, and territorial business competitiveness Employment opportunities for local, regional, and territorial residents Training and career development for local, regional, and territorial residents Avoidance of boom and bust cycles (e.g. via economic diversification) ADEQUATE SERVICES AND INFRASTRUCTURE Pressures on social services such as health care, education, and justice Housing pressures – affordability, availability, and appropriateness Traffic and road safety – pressures on physical infrastructure ADEQUATE SUSTAINABLE INCOME AND LIFESTYLE Overall amount of money in the community Uses of money in the community – effects of increased disposable income Local and regional cost of living Distribution of costs/benefits among affected people-impact equity Adverse lifestyle changes – increased gambling, crime, substance abuse SEIA QUESTIONS Impact definition What are the potential socio-economic and cultural impacts of the proposed development? The direction of impacts Is the direction of the potential impacts adverse or beneficial? Does impact direction shift between different groups and sub-populations? Do some benefit while others don’t? Are the trade-offs between potential adverse impacts and potential beneficial impacts acceptable? Impact causes How could the proposed development cause socio-economic impacts? Impact attribution Will the proposed development create new impacts or accelerate/exacerbate existing impacts? How responsible could the proposed development be for causing an impact? If this is immeasurable, how can the developer estimate the level of responsibility in a manner that is fair and precautionary? Impact scope and scale Which populations and communities will the proposed development most likely impact? How far and wide, geographically, could individuals and communities feel the impacts of the proposed development? Impact manageability Will potential impacts support or undermine the affected communities’ aspirations and goals? How resilient are the potentially affected communities? How vulnerable are they to adverse impacts? Will the impacts cause unmanageable change for a community? Impact significance Are the potential impacts likely, adverse, and/or significant? Is mitigation available to manage, reduce, or eliminate the potential impacts? Impact mitigation and monitoring Are there existing mitigation measures that have worked for these types of impacts? If so, how can we use them? How do we track the accuracy of our predictions and use adaptive management to alter mitigation if required? STEPS IN CONDUCTING SEIA 1. SCOPING A preliminary analysis that identifies and prioritizes SEIA considerations and required information. Early and effective scoping narrows the focus of SEIA onto issues of potential significance. 2. PROFILING BASELINE CONDITIONS Focuses on gathering information about the socio-economic environment and context of the proposed development. This can include defining measurable indicators of valued socio-economic components. 3. PREDICTING IMPACTS Based on the analysis of information gathered from issues scoping, baseline profiling, and past experiences to predict possible socio-economic impacts. Identifying trade-offs between the adverse and beneficial impacts of a proposed development is part of this analysis. 4. IDENTIFYING MITIGATION Predicted adverse impacts require mitigation. Mitigation includes strategies, plans, and programs to reduce, avoid, or manage impacts. 5. EVALUATING SIGNIFICANCE Involves determining whether a proposed development is likely to cause significant adverse impacts on valued socio-economic components. If appropriate mitigation measures cannot be identified, a proposed development may not be approved. 6. APPLYING MITIGATION AND MONITORING Good mitigation for socio-economic impacts requires good monitoring programs (also known as “follow-up”) to ensure the mitigation is working effectively, and, when necessary, the mitigation is adapted as required. GUIDELINES IN CONDUCTING SEIA When a practitioner enters a community, he should investigate the following sectors in people’s lives (Vanclay, 2002:185) before he attempts to classify types of social impacts: People’s way of life – how they work, play, and interact with one another on a daily basis Their culture Their community Their political systems Their environment Their health and well-being Their personal and property rights Their fears and aspirations