This document discusses microeconomics and macroeconomics. Microeconomics is the study of individual economic units like households and firms, and how supply and demand determine prices. Macroeconomics looks at aggregate measures for whole economies like GDP, inflation, and unemployment. The document also provides examples of microeconomic and macroeconomic concepts and instructs students to analyze a local business using a SWOT framework.

1. RESPONDING TO
OPPORTUNITIES IN
BUSINESS
Applied Economics
7:30 – 8:30 am

2. SPECIFIC OBJECTIVES
At end of this lesson, you are expected to:
1. Differentiate microeconomics from
macroeconomics.
2. Analyze the micro and macro environment

3. What is Microeconomics?
• Is a study of economic behavior of
individual units of an economy.
• It includes Households, Investor, firms,
industries etc.
• It studies firms operate under different
competitive conditions and how to
combined actions of buyers and sellers
determine prices in a specific market.

4. Microeconomics
Labor
economics
Decisions of
individual
firms
Decisions of
individual
consumers
Decisions of
individual
households
Factors that
influence
individual
economic choices
How demand
and prices are
determined in
individual
markers

5. What is Macroeconomics?
• It is a study of the behavior of the whole
aggregate) economies or economic
systems instead of the behavior of
individuals.
• It includes total national product, GNP,
average prices of goods and services,
exports for the entire economy, real
income growth, income distribution etc.

6. Refers to the increase of income, adjusting for
inflation. This will determine if the real status
of economy is growing or not.
Refers to how income is distributed among the
different income groups. It determines if
income is more or less distributed equally, or is
being concentrated in the upper income class.
Income Distribution
Real Income Growth

7. Expenditure patterns and trends in
consumers spending refer to how income
is used and what consumers are buying.
Refer to where the funds are used by the
borrower, whether for investment purposes
or some other use.
Expenditure patterns
Borrowing Patterns

8. Refer to licenses and taxes
The cost of living refers how much one spends
on daily sustenance, which also depends on
how productive one is, based on an individual’s
output.
Cost of Living
Government legal restrictions

9. Are what lenders charge a borrower for
the use of their money, typically
expressed as a percentage of the amount
borrowed.
Is what is left of one’s income after deducting
taxes
Interest rates
Disposable Income

10. THE ENTREPRENEUR’S CHECKLIST
1. There must be a market for the product or
service, otherwise; you will be producing
something that nobody wants to buy.
2. Accessible location is necessary to reduce
operating costs.
3. Minimizing fixed and variable cost is a must.
4. Compliance with legal requirements is a must.

11. SWOT ANALYSIS
The SWOT analysis (Strengths, Weaknesses,
Opportunities and Threats) is used to analyze
an Organization or process to evaluate the
internal (strengths and weaknesses) and
external ( opportunities and threats) factors
which may prove favorable or unfavorable in
achieving in objectives.

12. ACTIVITY
Pick a business in your barangay/ municipality that
has existed for at least five years. Interview the
owner and get the following information:
a. How did they come to choose to establish this kind of
business or sell this kind of product?
b. How did they choose the location?
c. What are some of the challenges they have faced over
the years of their business’ existence?

13. After taking to the owner, make a SWOT analysis of
the business using the following format:
BUSINESS NAME:
a. Strengths:
b. Weaknesses:
c. Opportunities:
d. Threats: