AppEcon

Economics

Economics

Study of mankind in the ordinary business of life, involving scarce resources to satisfy unlimited wants.

Economics

It came from the word “Oikonomia” which means “household management”

Applied Economics

Application of economic theories and models in real-life scenarios.

Scarcity

Condition of insufficient resources to satisfy all needs and wants.

Opportunity Cost

Value lost when choosing between different options.

Comparative Advantage

Ability to produce goods or services at a lower opportunity cost.

Absolute Advantage

Capacity to produce more output compared to another entity.

What To Produce

Determined by consumer preferences.

How To Produce

Determined by producers seeking profit.

For Whom To Produce

Determined by consumer purchasing power.

Economic Goods

Goods and services used extensively in economic discussions.

Land

Factor of production including soil and natural resources.

Labor

Factor of production involving physical and human effort.

Capital

Factor of production consisting of man-made resources.

Entrepreneurship

Factor deciding how resources are used, represented by individuals starting new businesses.

Entrepreneurship

also known as enterprise

Circular Flow Diagram

Economic model illustrating the flow of factors of production.

Production Possibility Frontier

Application of resource allocation and production factors concept.

Rent

Payment from land usage.

Salary

Payment for labor services.

Interest

Payment from capital usage.

Profit

Payment from entrepreneurship activities.

Qualitative Approach

Focuses on directional relationships of economic variables.

Quantitative Approach

Involves mathematical and statistical analysis of economic data.

Economic Variables

Key in explaining economic theories or models.

Variables

used to signify elements in an economic model

Functions

explains relationship between two or more variables

Economic Equation

a mathematical expression of an economic thought or concept

Graph

provides a visual representation of the relationship between two or more economic variables.

Economic Theories

Statements on the relationship of economic variables.

Marginal Utility Theory

People buy goods providing the highest satisfaction.

Economic Models

Representations of economic and social phenomena analyzed through research.

Ceteris Paribus Assumption

All else being the same in economic analysis.

Time Series

the data are collected for particular elements for several time periods

Cross Sectional

data includes different variables for a single time period

Normative Economics

• evaluates economic decisions, policies, or outcomes as good or bad.

• subjective opinions

Positive Economics

- evaluates economic scenarios and policies based on qualitative and quantitative analysis

• factual and objective

Microeconomics

Examines individual or company-level economics.

Macroeconomics

Studies behavior of the whole economy.

Utility

Value or satisfaction from consuming goods and services.

Marginal Utility

is the additional utility or satisfaction from consumption of additional goods or services, keeping other things constant 

Law of Diminishing Marginal Utility

Utility decreases as quantity increases.

Law of Diminishing Marginal Utility

marginal utility of goods and services decreases as quantity increases, ceteris paribus

Indifference Curve

a chart showing combination of two goods in various quantities

Indifference Map

a graphical representation of two or more indifference curves

Budget Line

set of combinations of two goods that can be purchased within a given income and prices

Equilibrium Position

where indifference curve and budget line intersect

Disposable Income

the income after taxes

Discretionary Income

the income left from disposable income after all other necessary expenses have been deducted

GDP

the value of all goods and services produced in a country.

GNP

the value of products and services produced by a country's citizens.

Output Approach

it looks at the output and evaluates what goods and services are factored in.

Expenditure Approach

it considers the value or expenditure associated with the purchase of goods and services

Economic Systems

the different ways of managing a nation’s   available resources to answer the three economic questions

Free Market Economy

system characterized by competition and high level of private ownership

• Prices are set by market mechanisms

• Resources are allocated freely

• Individual and entities have economic freedom

Centralized Economy

also known as “command economy”

• Characterized by heavy involvement of the government

• The government plans, directs, and decides how resources will be allocated

Mixed Economy

an economic system that combines the features of free market and centralized market systems

Traditional Economy

is characterized by customs and habits.

Barter

is a mechanism where goods are exchanged for another good

Economic Growth

Measured through GDP, showing the upward and downward trends in the economy.

Business Cycle

Fluctuations in GDP around its long-term natural rate.

Recession

Period of economic downturn with high unemployment and slow business.

Expansion

Period of economic growth with low unemployment and increased consumer spending.

Depression

Prolonged period of recession.

Full Employment

Business cycle movements leading to unemployment.

Price Stability

Stable prices in the economy to avoid inflation or deflation.

Economic Performance

the philippine economy has been experiencing growth since 1999

Outlook for the Philippine Economy

this remains positive

Global Challenges

the continuous integration of economies across the world means that the Philippines is vulnerable to major international issues.

Domestic Issues

in addition to international issues, the Philippines has to deal with internal socioeconomic challenges as well. 

Territorial Dispute With China

an on going maritime dispute over the West Philippine Sea, which started in 2012

Achieving Ceasefire in Mindanao

the struggle of the Philippines to end the long-time standoff with the rebels in the southern portion of the country

Consumer Market

most visible to consumers as we partake in these activities

Producer Market

enable raw material and intermediate product producers to sell their products to final product producers to final product producers who are now the market buyers

Resource Market

enables resource owners to sell the basic services of labor, land, and capital to producers of goods and services

Resource Constraint

compels firms, governments, and household consumers to find the best trade off with the least opportunity cost.

Demand

amount of goods and services consumers are willing to purchase given a certain price

Law of Demand

"with all other factors being constant or equal, the price and quantity demand of any product or service will be inversely related to each other. In other words, with increasing price, the quantity demanded will decrease and vice versa"

Demand Curve

a graphical representation of the relationship between the price of a certain commodity and the quantity demanded.

Demand Schedule

a table of price and quantity values

Demand Curve Slope

the result of such inverse relationship between the price and quantity demanded 

Price Elasticity of Demand

a measurement of change in the consumption of a product in relation to a change in its price

Shift of Demand Curve

quantity demanded is dictated by a change in price.

Substitute Goods

goods that meet the same requirements or fulfill the same needs as another good

Complementary Goods

are generally consumed or used together.

Supply

Refers to the willingness of the sellers to produce and sell a good at various possible prices

Law of Supply

all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer increase, and vice versa

Supply Curve

a graphic representation of the correlation between the cost of a good or service and the quantity supplied for a given period

Supply Curve Slope

The producer lowers the price until the quantity demanded equals the quantity he has to supply

Price Elasticity of Supply

A measure used in economics to show the responsiveness, or elasticity, of the quantity supplied of a good or service to a change in its price.

Shift of Supply Curve

when price of the commodity remains constant, but there is a change in supply due to some other factors, causing the curve to shift to a particular side

Number of Sellers

as quantity of sellers/ producers increase, the overall supply increases

Price Resources

as prices for raw materials increase, the production cost of the firm also increases, causing the supply to decrease

Taxes and Subsidies

are incentives firms to either produce more or less of the good

Technology

has a major impact of efficiency of production and cost of production

Expectations

Producers are incentivized to produce more products that are demanded by consumers. This cause quantity produced to increase or decrease

Related Products

complementary and substitute goods have direct correlations with the quantity supplied to producers

Market Equilibrium

is an economic state when the demand and supply curves intersect and suppliers produce the exact amount of goods and services consumers are willing and able to consume

Competitive Market

a surplus or a shortage may occur when there are movements or changes within the supply and demand schedule

Surplus

Supply exceeds demand.

• may be experienced when price of good is above equilibrium price  and when government sets a price floor above equilibrium price