ECON MT

factors of production

an economic term that describes the inputs that are used in the production of goods or services in order to make an economic profit. The factors of production include land, labor, capital and entrepreneurship.

economic system

an organized way in which a country allocates resources and distributes goods and services across the whole nation or a given geographic area. It is used to control the factors of production

structural unemployment

arises when workers experience longer periods of frictional or cyclical unemployment

absolute advantage

it is the ability of a country, individual, company or region to produce a good or service at a lower cost per unit than the cost at which any other entity produces that same good or service

Market Economic System

it is very similar to a free market. The government does not control vital resources, valuable goods or any other major segment of the economy. In this way, organizations run by the people determine how the economy runs, how supply is generated, what demands are necessary, etc.

opportunity cost

implies the value of choice foregone, to get something else ; Cost of giving up an alternative when making a choice

Invisible underemployment

includes workers who work 40hrs per week or even more in their jobs but their talents are underutilized or they receive inadequate compensation for their work

Visible underemployment

includes workers who work for less than 40hrs per week and who look for additional work

Determinants of Demand

income, taste and preference, price of related goods, changes in speculations, populations

Stagflation

inflationary period accompanied by rising unemployment and lack of growth in consumer demand and business activity

Microeconomics

is a branch of economics that examines the market behavior of individual consumers and organizations; it focuses on the demand and supply, pricing, and output of individual organizations

Macroeconomics

is a branch of economics which studies the economy as a whole; it deals with issues related to national income, employment pattern, inflation, recession, and economic growth

Trade-off

is a term used to describe the courses of action given up in order to perform the preferred course of action ; Occurs when an individual has made a choice, thereby sacrificing all other alternativ e choices

Entrepreneurship

is the drive to develop an idea into a business. An entrepreneur combines the other three factors of production to add to supply

frictional unemployment

occurs when a worker is "between jobs," which means that he or she has left a job and is looking for another

demand-pull inflation

occurs when the overall demand for goods and services in an economy increases more rapidly than the economy's production capacity

interest

payment for labor

wages

payment for labor

absolute poverty

poverty wherein conditions where an individual cannot meet the most basic commodities to sustain life and other normal activites

Determinants of Organizational Structure

prices of inputs or cost of producing the good. technology, taxes and subsidies, number of sellers or firms in the industry

Hyperinflation

rapid, excessive, and out of control price increases in an economy

labor

refers to human inputs such as manpower skills that are used in transforming resources into different products that meet our needs

Capital

refers to manufactured resources such as factories and machines. These are man-made goods used in the production of other goods

demand

refers to the amount of goods or services consumers are willing to purchase given a certain price

unemployment

refers to the portion of the labor force who is willing to engage in productive activities yet fails to do so

Underemployment

refers to the state of an individual being employed, but his or her talents and expertise are underutilized or are not matched to the job

land

represents all the natural resources, such as timber and gold, used in the production of a good which exist without man's intervention; payment for land is called rent

invisible hand

tendency of free markets to regulate themselves by means of competition, supply and demand, and self-interest

comparative advantage

the ability to produce a good at a lower opportunity cost than another trade partner

supply

the willingness and ability of sellers to produce and offer to sell a good at a various possible prices

theory of coordinatiom failure

underdevelopment is caused by uncoordinated activities in the market

New Growth Theory

underdevelopment is due to slow transmission of technology to developing countries

Neoclassical Theory

underdevelopment is mainly caused by domestic issues brought about by poor economic policies and resource allocation, as well as government corruption

seasonal unemployment

when people find themselves unemployed at certain times of the year

production possibility frontier

A graph that shows all the combinations of goods and services that can be produced if all of society's resources are used efficientl

economic development

Sustained elevation of an entire society and social system toward a better and more humane life

cost-push inflation

a result of the increase in the prices of production process inputs

Inflation

a sustained increase in the general price level of goods and services in an economy over a period of time

built in inflation

a type of inflation that results from past events and persists in the present

Economics

branch of Social Science which deals with the allocation of scarce resources in order to satisfy unlimited human wants and needs

positive economics

branch of economic based on data and facts

normative economics

branch of economics based on values, opinions and judgement

cyclical unemployment

brought about by changes in the economy or business

Command Economic System

characterized by a dominant centralized power (usually the government) that controls a large part of all economic activity. This type of economic system is usually found in communist countries.

Mixed Economic System

combines elements of the market and command economy. Many economic decisions are made in the market by individuals, but the government also plays a role in the allocation and distribution of resources. It is sometimes referred to as a dual economy

applied economics

concerned with using economic theories and models, as well as related principles and concepts to understand contemporary socioeconomic issues

relative poverty

condition in which people lack the minimum amount of income needed in order to maintain the average standard of living in the society in which they live

quality of life

considers aspects such as health, nutrition, education, environment, and income distribution in analyzing development

sustainable development

considers the impact of human activities on the environment and believes that environmental degradation has significant economic impact

Traditional Economic System

focuses exclusively on goods and services that are directly related to its beliefs, customs, and traditions

O-Ring Theory

development is a result of effiecient production wherein similarly skilled workers work together to accomplish tasks

structural change model

development is defined by the reallocation of labor from agriculture to industrial sector

international dependence

dominance of developed countries and multinational corporations over developing countries leads to dependence and underdevelopment

Linear Stages of Growth

economic development is a process which follows a sequence of historical stages: (1) traditional society (2) preconditions for take off (3) take- off (4) maturity and (5) high mass consumption

level production

economic growth is measured by the increase in a country's GDP

Adam Smith

father of economics ; proposed the idea of invisible hand ; also known for creating the concept of GDP