Applied Economics Terminologies 1

Scarcity

is a condition where there are insufficient resources to satisfy all the needs and wants of a population

Macroeconomics

is a division of economics that is concerned with the overall performance of the entire economy

Labor

physical and human effort exerted in production; covers manual workers as well as professionals

Opportunity cost

refers to the value of the best foregone alternative

Normative economics

refers to what should be - that which embodies the ideal such as the ideal rate of population growth or the most effective tax system

Land

soil and natural resources that are found in nature and are not man-made

Poverty line

the estimated minimum level of income needed to secure the necessities of life.

Capital

man-made resources used in the production of goods and services, which include machineries and equipment

Unemployment

the state of not being employed or no work

Command Economy

This is the authoritative system wherein decision-making is centralized in the government or a planning committee. This kind of economy holds true in dictatorial, socialist, and communist nations

Market Economy

This is the most democratic form of economic system. This is based on the workings of demand and supply.

Economic resources

a.k.a. factors of production, are the resources used to produce goods and services

Economics

as a study, is the social science that involves the use of scarce resources to satisfy unlimited wants.

John Neville Keynes

attributed to be the first to use the phrase, "applied economics" to designate the application of economic theory to the interpretation and explanation of particular economic phenomena

Positive economics

deals with what is - things that are actually happening such as the current inflation rate, the number of employed labor, and the level of Gross National Product.

Traditional Economy

decisions are based on traditions and practices upheld over the years and passed on from generation to generation

Gross Domestic Product (GDP)

defined as the market value of final products produced within the country

Microeconomics

is concerned with the behavior if individual entities such as the consumer, the producer, and the resource owner

Poverty

is not having enough money to meet basic needs including food, clothing and shelter.

Applied Economics

is the application of economic theory and econometrics in specific settings with the goal of analyzing potential outcomes

Gross National Product (GNP)

is the market value of final products, both sold and unsold, produced by the resources of the economy in a given period

Relative scarcity

is when a good is scarce compared to its demand

Social Science

the study of society and how people behave and influence the world around them