Social Studies

• Market Price – The price determined by the interaction of supply and demand. (True)

• Market Surplus – Occurs when the quantity supplied exceeds the quantity demanded. (True)

• Market Shortage – Happens when the quantity demanded exceeds the quantity supplied. (True)

INFLATION, DEFLATION & MARKET EQUILIBRIUM

• Inflation – A general increase in prices, not a decrease. (False) → Correct: Inflation is a general increase in prices.

• Deflation – A general decrease in prices, not price stability. (False) → Correct: Deflation is a general decrease in prices.

• Market Equilibrium – Occurs when supply equals demand, not when prices increase rapidly. (False) → Correct: Market equilibrium occurs when supply and demand are balanced.

EFFECT OF MARKET SURPLUS & SHORTAGE ON PRICES

• Market Surplus → Price decreases. (True)

• Market Shortage → Price increases. (True)

PURCHASING POWER DURING INFLATION & DEFLATION

• Inflation – Causes purchasing power of money to decrease, not fluctuate unpredictably. (False) → Correct: During inflation, the purchasing power of money decreases.

• Deflation – Increases the purchasing power of money. (True)

GOVERNMENT PRICE CONTROLS

• Price Ceiling – The maximum price set by the government, not the minimum. (False) → Correct: The price ceiling is the maximum price set by the government for a good or service.

• Floor Price – The minimum price set by the government, not the maximum. (False) → Correct: A floor price is the minimum price that can be charged for a good or service, set by the government.

• Purpose of a Price Ceiling – To protect consumers from excessively high prices. (True)

• Purpose of a Floor Price – To ensure producers, not consumers, receive a fair price. (False) → Correct: The purpose of a floor price is to protect producers by ensuring they receive a minimum price for their goods or services.

WAGES & FRANSHING

• Daily Minimum Wage – Represents the minimum wage, not the maximum. (False) → Correct: The daily minimum wage represents the minimum wage that employers can pay their workers.

• Starbucks in the Philippines – A popular food franchise. (False) → Correct: Starbucks is a popular coffee and cold beverage franchise. Considered by Sir Bon, though. 

• Jollibee in the Philippines - The most popular food franchise in the Philippines. 

• Lower Profits in Franchising – Not an advantage; franchises generally have a proven business model. (False) → Correct: A main advantage of franchising is the reduced risk due to an established brand and business model.

• Real Estate as a Franchise – Not a common franchise type in the Philippines. (False) → Correct: Real estate is typically not a franchise, but an independent business or brokerage.

• High Initial Investment – A drawback of franchising. (True)

• Proven Formula in Franchising – One of the biggest advantages. (True)

MARKET STRUCTURES

• Monopoly – A market structure with one seller controlling supply and price. (True)

• Oligopoly – Has a few dominant firms, not many small firms. (False) → Correct: In an oligopoly, a few large firms dominate the market and can influence prices.

• Monopolistic Competition – Firms sell differentiated products, not identical ones. (False) → Correct: In monopolistic competition, firms sell similar but not identical products, with differentiation in branding and quality.

• Monopolies – Often lead to higher prices and less consumer choice. (True)

• Pure Competition – Allows easy entry and exit of firms, leading to competition. (True)

FORMS OF BUSINESS ORGANIZATIONS

Multiple Choice Answers

• A sole proprietorship is a business owned by: One individual

• A company that sells shares to the public is a: Corporation

• A business owned by two friends sharing profits and losses equally is a: Partnership

• A business owned and operated by its members, sharing profits and benefits, is a: Cooperative

• A business where an owner buys the rights to operate under an established brand is a: Franchise

KEY TERMS

(Will add more key terms later - JV)

☆ Price 

• The market value of a commodity. 

• It is the amount that a buyer pays the seller to obtain a product. 

☆ Market Price 

☆ Equilibrium Price 

• It is the market price. 

• The price that is acceptable to both the buyers and the sellers at the given time. 

☆ Equilibrium Quantity 

• The market price where the quantity of goods supplied is equal to the quantity of goods demanded. 

☆ Market Equilibrium 

☆ Market Shortage 

• This happens because the demand for the products is greater than the supply, prices go up. 

☆ Market Surplus 

• It happens when demand is less than supply, prices go down. 

☆ Inflation 

• The increase in the prices of goods and services.

• When demand for products is greater than the supply, prices go up. 

☆ Deflation 

• When products offered for sale are more than what consumers wish to buy, market prices drastically go down.

• The decline in the prices of goods and services.

☆ Recession

• A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

• At least two consecutive quarters of economic growth. 

☆ Elasticity 

• Measures the degree of responsiveness of quantity demanded or supplied to a change in the price. 

☆ Price Floor

• The cheapest minimum price of a good or service. 

☆ Price Ceiling 

• The highest allowable price of a product.

• This happens when the supply of basic commodities is limited and the prevailing economic condition is not favorable to the people. 

☆ Creeping Inflation 

☆ Walking Inflation 

☆ Galloping Inflation 

• Occurs when price level rises by ten percent or more. 

• It makes it more difficult for consumers and businesses to keep up with the prices of products and the cost of production. 

☆ Hyperinflation 

• The worst type of inflation. 

• It is characterized by prices rising by fifty percent or more in a month. 

MINIMUM WAGE IN THE PHILIPPINES

— The minimum wage in the Philippines is an important topic that affects millions of workers in the

country. Prices of necessities, especially food, have increased during the pandemic. Many people have

been struggling to budget their salaries to keep them going. It’s not easy, since most Filipinos are

earning below the minimum.

MINIMUM WAGE (RATES)

• Refers to the minimum amount of remuneration that employers are required to pay wage earners for the work performed during a given period.

• These rates are set at a regional level by the Regional Tripartite Wages and Productivity Boards. 

• It applies to all workers, including full-time, part-time, and contractual workers.

• The determination of minimum wage rates takes into account factors such as: 

  • Poverty threshold

  • Prevailing wage rates as determined by the Labor Force Survey

  • Socio-economic considerations

Exemption from Payment of Income Tax:

— Minimum wage earners are exempted from payment of income tax on their basic minimum wage, including holiday, overtime, night shift differential, and hazard pay.

VARIATIONS IN THE MINIMUM WAGES IN EACH REGION

National Wages and Productivity Commission

— According to them, the minimum wage varies per region because there are different economic conditions depending on the location of the country. 

RA 6727

— Also known as the Wage Rationalization Act.

— Based on this act, the minimum wage depends on the cost of living of the workers. 

IMPORTANT NOTES: 

TOPIC

• Details (Will be adding more later - JV)

• The minimum wage in the Philippines plays a critical role in ensuring that workers receive fair compensation for their labor. 

• While there are concerns about its adequacy and impact on the economy, policymakers must carefully consider various factors when setting the minimum wage, including the needs of workers and the country’s economic conditions.

• Ultimately, the goal should be to balance ensuring that workers are paid a fair wage and creating an environment that fosters economic growth and job creation.