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Applied economics- application of economic theory Capital- manmade resources Command economy- authoritative system Economic system- means which society determines the answers to the basic economic problems Economics- as a study, in social science Labor— refers to the physical, human effort exerted in production Land- refers to soil and natural resources Macroeconomics— overall performance of the entire economy Market economy—most democratic form of economic system Microeconomics– is concerned with the behaviour of individual entities Opportunity cost– refers to the value of a foregone alternative.. Poverty—is the state of being extremely poor Poverty line—minimum income level Scarcity---is a condition where there are not sufficient resources to satisfy all the needs and wants of a population. Social science—the study of society and how people behave Traditional economy—is an economy where decisions are based on traditions and practices Unemployment—is a situation where people who are willing and able to work are seeking work but cannot find jobs. • “ceteris paribus” assumption---means all other related variables, except those that are being studied at the moment, are held constant. Demand—is the willingness of a consumer to buy a commodity at a given price. • Demand function– shows how the quantity demanded of a good depends on its determinants, the most important of which is the price of the good itself. • Demand schedule– shows how the various quantities the consumer is willing to buy a t various prices. • Economic rent—refers to a payment made to or for a factor of production over and above the amount expected by its owner. Economic rent– is the positive difference between the actual payment made for a factor of production (such as land, labour or capital) to its owner and the payment level expected by the owner. Economies of scale– savings that result from production over a wide range of output. • Elastic demand/ supply– is when a change in a determinant will lead to a proportionately greater change in demand or supply. The absolute value of the coefficient of elasticity is greater than 1. • Elasticity—the degree of the response of demand and supply a change in price or a non price determinant. • Equilibrium– means a state of balance. In the market, there is equilibrium when demand is equal to supply. • Equilibrium price– is the price at which the quantity demanded for a good is equal to the quantity supplied of that good. Equilibrium quantity– is where the quantity demanded for a good is equal to the quantity • Expectation—is a strong belief that something will happen or be the case in the future. • Foreign exchange rate– is the rate of conversion of the Philippine peso to a foreign currency such as the US dollar. • Full-time workers– are those who work for 40 hours or more. • Gross domestic product—is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period, usually one year. Imperfect competition—exists when at least one of the requirements for perfect competition is absent in the market. • Income—is consumed to fuel day to day expenditures. • Income effect—when the price of a good changes, the change affects the consumer’s real income. • Inelastic demand/supply—is when change in a determinant will lead to a proportionately lesser change in demand or supply. The absolute value of the coefficient of elasticity is less than 1. • Inferior goods– are goods that are bought when incomes are low, because low incomes prevent the consumers from buying higher priced goods. Investment—is building up the capital stock for more future production at the cost of savin • Labor force or labor supply– refers to the portion of population, 15 years old and over who are willing and able to work, including those are actively seeking work but have not found work, and those are employed. • Labor market—is where the workers offer their services and look for jobs, and where employers look for workers to hire. • Labor migration– is the movement of workers from their country for purposes of employment in a foreign country. Market—is a means of interaction between buyers and sellers for trading or exchange. • Market equilibrium—exists when quantity demanded is equal to quantity supplied. • Market structure—refers to the competitive environment in which buyers and sellers operate. • Minimum wage– refers to the lowest wage permitted by law below which if paid by employer will subject him to penalty from the government. Monopolistic competition– is a type of imperfect competition where firms sell differentiated products which are highly substitutable but are • Monopoly—is a market where there is a sole producer of a product, for which there are no close substitutes. • Movement along the curve– is a change from one point to another point on the same curve. A movement shows a change in the quantity demanded or supplies due to a change in the price of the good. Non-price competition– refers to any action a firm takes to shift the demand curve for its output to the right without having to sacrifice its prices. And may include better service, product guarantees, free home • Non price variables– are factors other than price that also can influence the demand for a supply of a good. • Normal good—is a good which a consumer tends to buy more of when income increases. • Oligopoly—is a market where a few sellers account for most of or total production. • Overseas Filipino worker—is a Filipino who works in a foreign country. • Part-time workers—work for less than 40 hours. Perfect competition—exists when there are many buyers and sellers who are too small to • Population—includes all the inhabitants of a particular town, area, or country. • Price ceiling—the highest price that the seller can charge for the good being sold, normally set by the government. • Price elasticity of demand—this measures the responsiveness of demand to a change in the price of the good. Productive capacity—the maximum output that can be produced by a given set of resources. • Public goods—government-provided facilities for public use that society and the economy cannot do without. • Real estate boom– refers to the surge in the demand for housing and residential property. • Real income– refers to the purchasing power of a person’s money income. This is the amount of goods and services one can buy with the income. Rent—payment for the use of land belonging to a landowner • Resources—basic factors of production enabling the processing of products towards higher stages. • Savings—is the portion of income earned that is not spent on consumption or taxes. • Shift of the curve—is a change in the entire demand or supply curve, due to a change in non price determinant of demand or supply. • Stock market—is where securities of corporates are traded. • Substitute goods—are those which are used in place of each other Substitute effect– when the price of a good changes and the price of the substitute good • Supply—refers to the quantity of goods that a seller is willing to offer for sale. • Taste—is a person’s liking or preference. • Taxes—payment for public goods and services by citizens • Technology—is the application of scientific knowledge for practical purposes, especially in industry. It includes machinery and equipment developed from the application of scientific knowledge.