REMEDIOS TRINIDAD ROMUALDEZ MEDICAL FOUNDATIONCALANIPAWAN ROAD, TACLOBAN CITY

HOMEWORK #1in

ECONOMICS(Market Structures and Business Organization)

FINALS

Submitted to:Ma’am Lydia Yucamco

Professor

Submitted by:Rhegel O. Catalla BMLS-2A

Student

I. TERMINOLOGIES1. Partnership – consists of two or more persons combining

their skills, money and materials. It establish the partnership, each of the partner is required to give his respective share.

2. Cooperative Organization – is a duly register associated of at least 15 persons who have voluntary joined together and equitable contribute the required share capital and accept a fair share of the risk and benefits of their undertakings to achieve a lawful common social and economic end.

3. Monopoly Profit – the amount earned by the monopolist after deducting the amount spend from the product.

4. Total Receipt – the equivalent amount of the quantity sold or the total revenue that a monopolist receives based on the given price. Where there is a single price, total receipt is the price average quantity sold.

5. Monopoly – a market model in which a single firm sells a product, the products that is produced has no close substitute or is unique.

6. Quantity Sold – total number of quantity purchased based on the given price.

7. General Partner – one whose liability extends to his separate property.

8. Corporation – the owners have an agreed ownership, shares specific objectives on their business vision as stated in their charter or articles of incorporation.

9. Common Stockholders – are those who have claims against the earnings and assets of the corporation next to those of the preferred stockholders. Their dividends depend upon the earnings of the business.

10. Single or Sole Proprietorship –the enterprise is owned and managed by one person.

11. Stocks – are certificates of ownership.12. Regular Member – entitled to all the rights and privilege

as members as stated in the cooperative code of the Philippines and in the cooperative’s articles of cooperation and by laws.

13. Oligopoly – a market model in which there are few sellers or firms that dominants the market.

14. Producers Cooperative – a kind of cooperative formed by groups of workers in any profession, who provide capital and jointly operate the business of producing goods together.

15. Second Mortgage Bondholders – a kind of bondholder who have the second claim against the earnings and assets of the corporation and the rate of interest is lower than the third mortgage bondholders.

16. Economic Survey – it is a general statement describing the structures, purposes and economic feasibility of the proposed cooperative area of operations size of membership and other pertinent data. It is a project feasibility study.

17. Bonds – are certificate of indebt lanes. 18. Monopsony – kind of market model where in there is only

one buyer.

19. Preferred Shares – is a kind of share which is told to all the people, who don’t have the direct control and management of the business.

20. Third Mortgage Bondholders – a kind of bondholder who have the third claim against the earnings and assets of the corporation.

21. Managing Partner – one whose share is the management of the day-to-day work of the partnership.

22. Gross Investment – refers to the output of investment goods, which is the sum total of a new construction and durable equipment for production, new residential constructions and increase in inventories during an income period.

23. Price Per Quantity – refers to the testing price of monopolist.

24. Duopoly – a kind of market model where there are two sellers in the market.

25. Preferred Stockholders – are those who have claims against the earnings and assets of the corporation. The dividends received by them are based on cumulative and fixed rate.

26. Market – is the place where you can buy the goods and services you want, where buyer and sellers transact.

27. Limited Partner – one whose liability is limited to his capital contribution.

28. Cost Per Quantity – the amount of money spend for each unit of commodity.

29. Industrial Partner – contributes his talents and skills.30. Perfect or Pure Competition – a kind of market model in

which there are many buyers and sellers of a product, the product is homogenous, there is perfect mobility of resources and economic agents who have perfect knowledge of market condition.

31. Total Cost – the total expenses from all quantity that has been produced and sold in the market. The sum of fixed cost and variable cost.

32. First Mortgage Bondholder – a kind of bondholders who have the first claim against the earnings and assets of the corporation and the rate of the interest is lower than the second and third mortgage bondholder.

33. Associate Member – has no right to vote and be voted upon and is entitled to such rights and privileges as provided in the cooperatives by laws. He has also to pay his share capital and membership fee and must also be of legal age.

34. Consumer Cooperative – a kind of cooperative formed by groups of consumers who voluntarily pool their money, talent and other human resources together to buy and sell goods at reasonable or lower prices. Their aim is to eliminate middleman to earn profit from them.

35. Article of Cooperation – the article of cooperation is duly notarized document that legally binds all the signatures in the formation of cooperative.

36. Stockholder – are actual owners of the corporation who have the complete control of the management.

II. ENUMERATIONA. 8 Fundamental Cooperative Organization

1. Open to all who may want to join the association.2. The capital is supplied by the members and the shares of stocks

are of low denominations, so membership can be maximized.3. Only one vote is allowed to each members regardless of his

investments.4. A low rate of interest is paid on borrowed capital.5. The goods of the cooperative are sold at current prices.6. Goods are sold for cash to avoid credit loss.7. The profit are distributed to the members in proportion to their

purchases on patronage.8. Regular provision of funds for promotional and educational work.

B. 7 Advantages of a Single Proprietorship1. Open to all2. Flexible and uncomplicated3. Easy to organize4. Owner acquires all the profits from his business5. Smaller operational expenses6. Easier to increase or decrease capital7. Closer relationship with clients and customers.

C. 7 Contents of the Article of Cooperation1. Name of the cooperative which shall include the word

“cooperative”2. Purposes and scope of the business3. The term existence of the cooperative should not be more than

50 years4. The area of operation an postal address and registrants5. The common bond of membership6. The list of the name of the directors who shall manage the

cooperative7. The amount of its share capital, names and residence of its

contributors and a statement of whether the cooperative is primary, secondary or tertiary in accordance with article 2.3 of R.A. 6938

D. 7 Organization Structure of a Cooperative1. General assembly2. Board of directors3. Audit committee4. Credit committee5. Election committee6. Education and training committee7. Other committees essential to the operations of the cooperative

that may be created

E. 6 Disadvantages of a Single Proprietorship1. Limited amount of capital and difficult to develop and expand the

business2. There’s no specialization3. If business fails, the proprietor stands to lose his fortune4. The owner is subject to liability against his entire property5. No direct input from other people knowledgeable in the business6. Use of modern technology is limited

F. 3 Causes why Early Cooperative Fails1. Presence of dishonest officials2. Inefficient business management lack of education and training3. Buyers have been allowed to purchase on credits

G. 6 Procedures in Forming a Cooperative1. Get organized2. Prepare a general statement, called “economic survey”3. Draft the cooperatives by laws.4. Draft the articles of cooperation5. Secure bonds of your accountable officers, normally the

treasurer and the manager6. Register your cooperative with the CDA

H. 7 Kinds of a Cooperative1. Producers Cooperative2. Cooperative Credit Association3. Consumer’s Cooperative4. Cooperative Insurance Societies5. Cooperative Housing Societies6. Cooperative Utilities7. Cooperative Health Association

I. 4 Market Model in Oligopoly1. There are few sellers or firms that dominates the market2. Products are identical or homogeneous or differentiated3. There is price agreement in among the producers to protect their

own product4. Entry into the industry is possible, but not easy because these

are already well-established

J. 2 Kinds of Cooperative Membership1. Regular member2. Associate member

K. 5 Monopolistic or Differentiated Competition1. There is a large number of sellers acting independently2. Products are differentiated3. There is limited control of price4. Entry or existence in the industry is rather easy in the long run5. There is aggressive non-price competition in product quality like

extensive advertising to promote the product of the sellers

L. 4 Disadvantages of a Corporation1. Not easy to organize2. Regulation and formalities required by SEC may slowdown the

implementation of major decisions3. Unscrupulous officials may exploit workers4. Formal relationships and direct contact between the officers and

the employees of a corp. is lacking.

M.6 Advantages of Partnership1. The borrowing capacity is increased2. Better management for “two heads better than one”3. There is division of labour4. Accumulate a larger amount of capital as compared to sole

proprietorship5. There is a certain degree of “specialization”6. Its size encourage good employer- employee relations.

N. 6 Different Market Structures

1. Perfect competition2. Monopolistic competition3. Monopoly4. Oligopoly5. Duopoly6. Monopsony

O. 4 Characteristic of a Corporation1. A creation of the state2. It is a legal entity, distinct and separate from the individual

stockholder who runs it.3. The members must not be less than 5 but not more than fifteen4. It is supposed to have a perpetual life

P. 5 Advantages of a Corporation1. Better access to management given its huge resources and large

scale-operation2. Has limited ability3. Permits easily the transferability of ownership interest because it

can be divided into shares of stocks4. It has the most effective means of raising money capital for its

operation5. It has permanent life