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CHAPTER 4
The Socio-Economic
Impact Study
LESSON 4.1
The Theory of
Consumer Behavior
Chapter Learning Objectives
• To identify and explain the various determinants
of business and industry
• To figure out how these determinants can have
an impact on concerned sectors such as the
consumers, suppliers and investors, the
government, households and on international
trade
• To discuss consumer behavior and relate it to
the benefit of business on consumers
Chapter Learning Objectives
• To discuss production theory as basis for
coming up with a viable and profitable business
• To draft a business proposal using the lessons
studied in previous chapters
• To analyze and evaluate the viability of a
business and its impact on the community
• To come up with recommendations and
strategies on how to minimize a business’
negative impact on society
Chapter Learning Objectives
• To describe the role of government in the
economy
• To describe the Philippine household as to age
and income as a basis of choosing the target
market of a business/product/service
Terms to Remember in
Chapter 4
• Consumption • Output
• Consumer theory • Fixed input
• Utility • Variable input
• Utility function • Production function
• Total utility • Total Product (TP)
• Marginal utility • Marginal Product (MP)
• The Law of Diminishing • Average Product (AP)
Marginal Utility • The Law of Diminishing
• Production Marginal Returns
• Input • The Herfindahl-
Hirschman Index (HHI)
On Consumer Theory
Increases Decreases
Declines
Hypothetical Utility Schedule of Marvin for Chocolate Candy
The Utility Function