Applied econ test 1

CCA

The estimated amount of capital (machines, buildings, etc.) that wears out or becomes obsolete in a year.

Market Equilibrium

The point where the quantity demanded equals the quantity supplied, setting the market price.

Expenditure

The total spending on goods and services.

Positive Economics

The study of "what is" in economics; focuses on facts and cause-and-effect relationships without judgments.

Opportunity costs

The value of the next best alternative that is given up when making a choice.

Substitute Goods

Goods that can replace each other in consumption (e.g., tea and coffee).

Economic Resources (Factors of Production)

Inputs used to produce goods and services: land, labor, capital, and entrepreneurship.

Income Approach (to GNP/GDP)

A way of measuring national income by adding all incomes earned
(wages, rents, interests, profits).

Macroeconomics

The branch of economics that studies the economy as a whole (inflation,
unemployment, growth).

Rent

Payment made for the use of land or property.

Entrepreneurship

The ability to innovate, take risks, and organize resources to produce goods/services.

Ceteris Paribus

A Latin phrase meaning "all other things being equal," used to isolate the effect of
one variable.

Market

A system or place where buyers and sellers exchange goods and services.

Applied Economics

The practical application of economic theories to real-world problems.

GNP (Gross National Product)

The total market value of goods and services produced by a nation's residents in a given period, regardless of location.

Statistical Discrepancy

The difference between GDP calculated by the expenditure approach and by the income approach.

Poverty

The state of lacking sufficient income or resources to meet basic needs.

Increases and Decreases in Demand and Supply

Shifts in demand or supply curves caused by
non-price factors (income, technology, etc.).

Capital

Man-made resources used to produce other goods/services (machines, tools, factories).

Market Economy

An economic system where decisions are made by individuals and businesses based on supply and demand.