Applied economics

• economic is the study of how people allocate scarce resources for production, distribution, and consumption, both individually and collectively.
• social science is the branch of science devoted to the study of societies and the relationships among individuals within those societies.
• scarcity is the insufficiency or inadequacy of economic resources and as a result, we have to decide and choose.
• trade-off the exchange or choosing between alternative it is reality of life that getting one thing would mean giving up another thing
• opportunity cost is the value or cost of the next best forgone choice/alternative
• positive economics describe and explains various economic phenomena or the "What is" scenario. it is based on facts
• normative economics focuses on the value of economic fairness, or what the economy "should be". is based on value judgements
• microeconomics is the close up view o the economy, studying individuals and business decisions. It is also called the bottom-up approach that focuses on supply and demand, and other forces that determine price levels.
• Macroeconomics is the overall view of the economy looking at the decisions of countries and governments. top down approach
• land includes all the natural resources such as fertile soil, minerals, and water which can be sources of raw materials to produce goods or products.
• capital refers to anything that people produce and later used in production of other goods and services such as manufactured aids, tools, machines, equipment, etc.
• labor refers to the physical and mental talents of individuals used to produce goods/service.
• entrepreneurship is the ability to organize the other resources (lang, labor, and capital) to produce good and services.
• economic resources are all of the ingredients needed for production
• economic systems control the factors of production and the distribution of goods and services
• laissez-faire a french phrase that translates "leave alone"
• adam smith the father of economics or the father of capitalism
• Karl Marx - saw instability struggle, and the decline of a free market economy. Je explained that the capitalists make profit by exploiting the labor of workers
• John Maynard Keynes - his work general theory of employment, interest and money
• poverty is pronounced deprivation in well being. it is the lack of monetary resources to meet ones needs or the lack of specific goods like food, asset, shelter, etc.
• social inequality refers to disparities and discrepancies in areas such as income, wealth, education, nutrition, etc.
• monopoly is a market structure characterized by a sole seller in a particular market wherein the business entity may control the supply
• environmental issues are harmful effects of human activities usually economic activites on the environment
• Recession is a period of temporary economic decline during which industrial and trade activities are reduced, marked by a fall in GDP
• Unemployment happens when a lot of people are jobless/cannot find work or are losing jobs
• inflation is the consistent increase in the average price of goods and services
• trade deficit occures when a country's imports exceed its exports during a given time period
• elasticity is a measure used in response to changes in the determinants of demand and supply
• price elasticity of demand refers to the degree of reaction or response of the customers' demand to change in price of the good and services sold
• elastic when a percentage change in price leads to a greater chagne
• inelastic when the perscentage change in price leads to a lesser change
• unitary demand is unitary when a percentage in price is equal
• perfectly elastic when at a given price, percentage change in quantity demand can change infinitely
• normal goods are products and services that see a rise in demand when income rises
• inferior goods are products and services that see decrease in demand when income rises, giving negative
• cross elasticity measures responsiveness in the quantity
• substitute good is a good that serves the same purpose as another good for consumer
• complementary good a good that adds value to another good when they are consumed together
• price ceilings are set at maximum prices
• floor prices are price minimums enforced by the government, meaning the price cannot go lower