Comprehensive Economics and Agricultural Marketing Review

Vocabulary flashcards covering macroeconomics, microeconomics, agricultural marketing, agricultural policy, and foundational economics based on exam review notes.

Two-Sector Circular Flow Model

A simplified representation of economic activity showing the flow of money, goods, and factors of production between two main agents: households and firms.

Real Flow

The physical flow of goods and services from firms to households and the flow of factors of production from households to firms in a circular flow model.

Monetary Flow

The flow of money in the form of consumer spending on goods and services and firm payments for factor incomes such as wages, rent, interest, and profit.

Business Cycle

The rise and fall in the production output of goods and services in an economy over time, generally measured by fluctuations in real Gross Domestic Product (GDP).

Expansion Phase

The first stage of the business cycle characterized by increases in employment, incomes, production, sales, and booming investment.

Gross Domestic Product (GDP)

The market value of all final goods and services produced within an economy during a given period of time.

Gross National Product (GNP)

The total market value of all final goods and services produced by all the nationals of an economy during a given period of time.

Real GDP

A measure of physical output in the economy that values goods across different time periods at constant prices, thereby adjusting for inflation.

Inflation

The sustained increase in the general price level of goods and services in an economy over time.

Demand-Pull Inflation

Inflation that occurs when the aggregate demand for goods and services exceeds what the economy can produce, pushing prices up.

Cost-Push Inflation

Inflation caused by an increase in production costs that pushes the prices of final goods upward.

Consumer Price Index (CPI)

A weighted average of the cost of a fixed bundle of goods and services purchased by a typical household relative to a base year.

Frictional Unemployment

Temporary unemployment that occurs when workers are in between jobs or transitioning into new employment suited to their skills.

Structural Unemployment

Unemployment caused by a mismatch between the skills workers possess and the skills required for available jobs, often due to technological advancements.

Cyclical Unemployment

Unemployment resulting from a decline in economic activity during recessions when overall demand for goods and services falls.

M1 (Narrow Money)

The transactions money supply readily used for purchases, calculated as $\text{M1} = \text{cash} + \text{checking deposits}$.

Deposit Multiplier

A multiplier calculated as $\text{Deposit Multiplier} = \frac{1}{\text{Reserve Requirement}}$, representing how many times an initial deposit expands total money creation.

Fiscal Policy

Government policies concerning taxation and expenditures used to stabilize national output, employment, and economic growth.

Expansionary Fiscal Policy

A fiscal strategy where the government cuts taxes and/or increases spending to stimulate aggregate demand during an economic downturn.

Monetary Policy

Tools used by the Central Bank (such as reserve requirements, discount rates, and open market operations) to control the money supply in an economy.

Agricultural Marketing

A series of services performed from the point of farm production until agricultural products reach the ultimate consumer.

Form Utility

The value added to a product by changing its physical form or structure through processing raw materials into finished goods.

Time Utility

The value added by storage functions that make goods available when consumers need them, bridging the gap between production and consumption.

Place Utility

The value added by transportation functions that move products from the production site to the location where consumers want them.

4 Ps of Marketing

The core framework of the marketing mix, consisting of Product, Price, Place, and Promotion.

Absolute Constant Margin

A marketing margin where the absolute peso difference between prices at two market levels remains constant regardless of the volume marketed.

Marketing Margin

The difference between the final price paid by consumers for a finished product and the price received by producers for the raw product.

Breakdown of Consumer Peso

A series of figures representing the absolute margins of different middlemen or marketing functions divided by the final retail price.

Word-of-Mouth (WOM) Marketing

A promotional strategy leveraging personal recommendations to build trust and reach customers, highly effective for agricultural products.

Economics

A social science derived from the Greek word 'oikonomia', dealing with how society allocates scarce resources to satisfy unlimited human wants.

Scarcity

The fundamental economic problem of having limited factors of production relative to unlimited human wants and needs.

Opportunity Cost

The value of the best foregone alternative sacrificed when making an economic choice.

Adam Smith

The Scottish philosopher recognized as the 'Father of Economics' and founder of Classical Economics, who published 'The Wealth of Nations' in 1776.

Positive Economics

The branch of economic analysis that deals with objective facts, testable hypotheses, and verifiable cause-and-effect relationships.

Normative Economics

The branch of economic analysis that incorporates value judgments, opinions, and policy prescriptions regarding what ought to be.

Keynesian Economics

An economic theory founded by John Maynard Keynes advocating government spending intervention to stabilize economies during recessions.

Monetarism

An economic theory associated with Milton Friedman asserting that inflation is primarily caused by excessive growth in the money supply.

Theory of Comparative Advantage

An international trade theory developed by David Ricardo showing how countries benefit from specializing in producing goods with lower opportunity costs.

Microeconomics

The study of economic decision-making and resource allocation focusing on individual consumers, households, and firms.

Law of Demand

An economic rule stating that as the price of a good increases, the quantity demanded decreases, all else being equal.

Price Elasticity of Demand (PED)

A measure of how quantity demanded responds to price changes, calculated as $\text{PED} = \frac{\text{\\text{\%}}\triangle Q_d}{\text{\\text{\%}}\triangle P}$.

Substitute Goods

Goods that can replace each other in consumption; an increase in the price of one leads to an increase in demand for the other.

Complementary Goods

Goods consumed together; an increase in the price of one leads to a decrease in demand for the other.

Equilibrium Price

The market price at which the quantity demanded by buyers exactly equals the quantity supplied by sellers.

Price Ceiling

A legal maximum price imposed by the government below the market equilibrium price to protect consumers, which typically creates a shortage.

Price Floor

A legal minimum price imposed by the government above the market equilibrium price to support producers, such as agricultural price supports.

Perfect Competition

A market structure characterized by many buyers and sellers, homogeneous products, free entry and exit, where all sellers are price takers.

Monopoly

A market structure with a single seller offering a unique product without close substitutes, backed by significant entry barriers.

Monopolistic Competition

A market structure where a large number of sellers offer differentiated products to meet varied consumer preferences.

Oligopoly

A market structure dominated by a few large, mutually interdependent firms.

Price Taker

An individual buyer or seller who lacks market power to influence prices and must accept prevailing market prices.

Marginal Cost

The additional cost incurred by producing one additional unit of output.

Marginal Revenue

The additional revenue generated by selling one extra unit of output; profit maximization occurs where $\text{MR} = \text{MC}$.

Consumer Surplus

The monetary difference between what a consumer is willing to pay for a product and what they actually pay.

Law of Diminishing Marginal Utility

A principle stating that as consumption of a good increases, the additional satisfaction (marginal utility) derived from each added unit declines.

Marginal Product

The additional physical output obtained by employing one extra unit of a variable input while holding all other inputs constant.

Economic Growth

A sustained increase in real aggregate output or production capacity of an economy over time.

Economic Development

A holistic process involving improvements in living standards, household incomes, social wellbeing, and reductions in inequality beyond output growth.

Agriculture and Fisheries Modernization Act (AFMA / RA 8435)

A landmark Philippine law designed to modernize agriculture and fisheries through technology, infrastructure, credit, and SAFDZs.

Strategic Agriculture and Fisheries Development Zones (SAFDZs)

Priority areas designated under AFMA for agricultural modernization and protected from land conversion.

Agri-Agra Reform Credit Act (RA 10000)

A law mandating Philippine banks to allocate $15\text{\%}$ of their loan portfolios for agriculture and $10\text{\%}$ for agrarian reform beneficiaries.

Rice Competitiveness Enhancement Fund (RCEF)

A fund established under RA 11203 providing $\text{₱}10\text{ billion}$ annually for rice farm mechanization, seed development, credit, and extension.

Magna Carta for Small Farmers (RA 7607)

A law granting rights, social protections, equitable benefits, and fair pricing mechanisms for smallholder farmers in the Philippines.