Applied Economics
interest
income of the owner of the capital
wage
income received by labors
traditional economy
methods are stagnant
microeconomics
more concerned on how goods flow from the business firm to the consumer and how resources move from the resource owner to the business firm
rent
payment received by owners of land
labor
physical and human effort exerted in production
macroeconomics
study of the economy as a whole
GNP
the market value of final products , both sold and unsold, produced by the resources of the economy in a given period
GDP
the market value of final products produced within the country
distribution
the marketing of goods and services to different economic outlets
capital
man-made resources used in the production of goods and services, which include machineries and equipment
production
the process of producing or creating goods needed by the households to satisfy their needs
exchange
the process of transferring goods and services to a person in return for something present medium of exchange -money
consumption
the proper utilization of economic goods; spending money for goods and services
socioeconomics
the social science that involves the use of scarce resources to satisfy unlimited wants
applied economics
the study of economics in relation to real world situations
microeconomics, macroeconomics
2 branches of economics
testing hypothesis, forecasting future trends
2 purposes of econometrics
relative, absolute
2 types of scarcity
traditional, command, market
3 economic systems
land, labor, capital
3 economics resources
aggregate demand, aggregate supply, national income
3 examples of macroeconomics
individual demand, individual supply
3 examples of microeconomics
production, distribution, exchange, consumption, public finance
5 divisions of economics
scarcity
a condition where there are insufficient resources to satisfy all the needs and wants of a population
macroeconomics
about the nature of economic growth, the expansion of productive capacity and the growth of national income
applied economics
acts as a mechanism to determine what steps can reasonably be taken to improve current economic situation
microeconomics
also concerned with the process of setting prices of goods ,also known as "Price Theory"
economics resources
also known as factors of production
applied economics
application of economic principles and theories to real situations, trying to predict what the outcomes might be
economics resources
by nature, limited and it command a payment that becomes the income of the resource owner
applied economics
can teach valuable lessons on how to avoid the recurrence of a negative situations, or at least minimize the impact
macro
comes from Greek word, makros, meaning "large"
microeconomics
concerned with the behavior of individual entities such as the consumer, the producer, and the resource owner
traditional economy
decisions are based on traditions and practices upheld over the years and passed on from generation to generation
market economy
decisions are made on what goods and services to produce
production
heart of economy whose value measures both resource input and output of people
applied economics
helps aside all attempts to dress up a situation so that it will appear worse or better than it actually is
command economy
holds true in dictatorial, socialist and communist nations
GNP
includes the capital and entrepreneurship belonging to other countries brought to the domestic economy by foreign businesses
land
soil and natural resources that are found in nature and are not man-made
public finance
the activities of the government regarding taxation, borrowings, and expenditures
econometrics
the application of statistical and mathematical theories to economics
command economy
the authoritative system wherein decision-making is centralized in the government or planning committee
market economy
the most democratic form of economic system
Economics
the study of production, distribution, selling and use of goods and services
traditional economy
traditional societies exist in primitive and backward civilizations
economics resources
used to produce goods and services
relative scarcity
when a good is scarce compared to its demand
absolute scarcity
when supply is limited