APPLIED ECONOMICS: Module 1

Consumers

the people who buy goods and services

Microeconomics

The study of the economic behavior of individuals and firms.

Macroeconomics

The study of the economy as a whole, looking at economy-wide factors such as interest rates, inflation, growth, and unemployment.

Applied Economics

the study of economic principles when they are applied to specific situation

Producers

create or provide a certain good (product) or service. can be individuals or companies.

Demand

a schedule or curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time.

Supply

a schedule or curve showing the various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period, other things equal.

Commodity

A raw material, such as oil or copper, that is usually traded in bulk. Changes in commodity prices can have significant economic effects by, for example, feeding through into consumer prices.

Utility

used to determine the worth or value of a good or service. More specifically, it is the total satisfaction or benefit derived from consuming a good or service.

Cartel

Agreement where a group of producers collaborate to fix the price, or restrict the supply, of a good or service. are often outlawed by government antitrust regulations because they restrict competition.

Remittance Dependency

over-reliance on this income source exposes the economy to global economic
fluctuations and uncertainties in foreign employment conditions.

Law of Demand

states that quantity purchased varies inversely with price. In other words, the higher the price, the lower the quantity demanded.

Demand Curve

a curve that establishes the relationship between the quantity demanded and the price of a good

Shift in Demand Curve

when the quantity of a product or service demanded at each price level changes.

Price of the Product

how much a customer pays for a product/service

Low Income

means that you have less to spend in total, so you would have to spend less on some goodss on some—and probably most—goods.

Supplier Incentive

term used to align the motivations of the client with the supplier by stimulating supplier's performance improvement in return for enhanced reward.

Profit Maximization

Suppliers maximize their profits by increasing the number of
itemsid

External Shocks

such as government policies or technological advancements can affect price and quantity

Supply Schedule

is a table that shows how much of a product or service a supplier is willing to sell at a given price.

Price & Quantity

The relationship between the price and the product

Market Condition

The existing circumstances that affect supply, such as production costs, technology, and expectations of sellers.

Types of Supply Schedule

• Individual Supply Schedule

• Market Supply Schedule

Individual Supply Schedule

Shows the availability of the product from one business at a given time

Market Supply Schedule

Shows the availability of the product from multiple businesses at a given price.

Supply Curve

a graph that shows the quantity supplied at each price

Power of Taxation, Power of Police, Power of Eminent Domain

What are the three inherent powers of the state?

Necessities

tends to have inelastic demands

Abraham Maslow

Created the Maslow's Hierarchy of Needs

Luxuries

tend to have elastic demands