Recommended
More Related Content
Similar to Applied Economics Concepts for college students.pptx
Similar to Applied Economics Concepts for college students.pptx (20)
Recently uploaded
Recently uploaded (20)
Applied Economics Concepts for college students.pptx
- 1. Applied Economics Economic Concepts and Models
- 2. Supply and Demand This fundamental concept describes the relationship between the availability (supply) and desire (demand) for a good or service. When supply and demand are in equilibrium, prices tend to stabilize. If demand exceeds supply, prices rise; if supply exceeds demand, prices fall.
- 3. Opportunity Cost Opportunity cost represents the value of the next best alternative foregone when a choice is made. It helps in decision-making by considering the trade-offs involved in allocating resources.
- 4. Gross Domestic Product (GDP) GDP measures the total value of all goods and services produced within a country's borders in a given time period. It is a key indicator of a country's economic health and is often used to compare the economic performance of different nations.
- 5. INFLATION Inflation is the rate at which the general price level of goods and services rises, leading to a decrease in the purchasing power of a currency. Moderate inflation is typically considered healthy for an economy, while hyperinflation can be damaging.
- 6. Monetary Policy Monetary policy is the management of a country's money supply and interest rates by its central bank (e.g., the Federal Reserve in the U.S.). It is used to control inflation, stimulate or slow down economic growth, and stabilize the financial system.
- 7. Fiscal Policy Fiscal policy refers to government actions related to taxation and spending to influence the economy. Expansionary fiscal policy involves increasing government spending and/or reducing taxes to stimulate economic growth, while contractionary fiscal policy aims to slow down an overheated economy through reduced spending or increased taxes.
- 8. Elasticity Elasticity measures how sensitive the quantity demanded or supplied of a good is to changes in its price or other factors. For example, if demand is inelastic, a change in price has a small impact on the quantity demanded.
- 9. Market Structure This refers to the characteristics and organization of a market, such as the number of firms, degree of competition, and barriers to entry. Common market structures include perfect competition, monopolistic competition, oligopoly, and monopoly.
- 10. Utility Utility is a measure of the satisfaction or benefit that individuals derive from consuming a good or service. Economists often use utility to explain consumer choices and preferences.
- 11. Trade-off A trade-off occurs when individuals or societies must sacrifice one thing to gain something else. It's a fundamental concept in economics because resources are limited, and choices must be made.
- 12. Labor Force The labor force includes all individuals who are either employed or actively seeking employment. It's a crucial component in analyzing employment and unemployment rates.
- 13. Capital Capital represents the tools, machinery, equipment, and financial resources used in the production of goods and services. It's a factor of production and is essential for economic growth.
- 14. Externalities Externalities are the unintended side effects of economic activities on third parties who are not directly involved in the transaction. Positive externalities, like education benefiting society, and negative externalities, like pollution harming the environment, are common examples.
- 15. Monetary Unit A monetary unit is the standard unit of currency used in an economy. It provides a common measure of value for goods and services and facilitates economic transactions.
- 16. Trade Balance The trade balance measures the difference between a country's exports (goods and services sold to other countries) and imports (goods and services purchased from other countries). A surplus occurs when exports exceed imports, while a deficit occurs when imports exceed exports.
Editor's Notes
- Think of supply and demand like a seesaw for stuff you buy, like pizza. Imagine you have a pizza stand, and you make delicious pizzas. Lots of people in your town really want your pizza (that's the demand), but you only have a limited number of pizzas to sell (that's the supply). Now, let's say you have just the right number of pizzas to satisfy everyone who wants one. Your supply and demand are balanced like a seesaw that's perfectly level. So, you don't need to charge crazy high prices because you have enough pizza for everyone, and the prices stay normal. But one day, your pizza becomes super popular, and suddenly, way more people want your pizza than you can make. That's like having too many people on one side of the seesaw, and it tips way down. To make it fair, you raise the price because there's not enough pizza for everyone, and you want to decide who gets it. So, the price goes up when the demand is higher than the supply. On the other hand, sometimes you make a lot of pizza, but not many people want it. Now, it's like having too many people on the other side of the seesaw, and it tips way down on the other side. To get people interested in your pizza, you lower the price because you have too much pizza sitting around and want to sell it. So, the price goes down when the supply is higher than the demand. So, supply and demand are like a seesaw for prices. When they're balanced, prices stay steady. When one side is heavier (either supply or demand), prices go up or down accordingly. It's like a pizza party for your wallet! ๐๐ฐ
- Opportunity cost is like the stuff you miss out on when you make a choice. Let's say you have some money and two fun things you can do with it. Imagine you have $20, and you can either buy a ticket to a cool movie or go to an amusement park. You really want to do both, but you can only pick one. Now, if you decide to go to the movies, the opportunity cost is what you're giving up - in this case, the amusement park fun. You could have had a blast on roller coasters and eating cotton candy, but you chose the movies instead. On the other hand, if you decide to go to the amusement park, your opportunity cost is the movie you won't get to see. You might miss out on an awesome adventure on the big screen. So, opportunity cost helps you think about what you're giving up when you make a choice. It's like saying, "Okay, I'm going to the movies, but I know I won't get to ride roller coasters today." It helps you make decisions by reminding you about the trade-offs you're making when you allocate your resources, like time or money. Think of it this way: Opportunity cost is like the price you pay in fun or benefits for choosing one thing over another. It's the "what could have been" in your decision-making adventure! ๐๐ข๐ฌ
- GDP, or Gross Domestic Product, is like a big scoreboard for a country's economy. It tells us how much stuff, like goods (like phones, cars, and clothes) and services (like haircuts, education, and healthcare), a country makes and provides in a certain time, usually a year. It's important because it helps us figure out how well a country's economy is doing. When GDP goes up, it usually means the country is doing well economically. When it goes down, it might mean there are some economic problems. People also use GDP to compare how well different countries are doing economically. It's like comparing scores in a video game โ you can see which country is doing better or worse in terms of their economic activity. So, in simple terms, GDP is like a way to measure and compare how much stuff a country makes and does, and it's a handy tool to see how healthy a country's economy is.
- Think of inflation as the sneaky ninja that makes your money less powerful over time. Imagine you have a magical money pouch, and inside it, you have enough coins to buy a big box of your favorite video games. Now, when inflation happens, it's like that ninja sneaks into your pouch and steals a few coins. So, even though you have the same number of coins, they can't buy as many games as before. A little bit of inflation, like a friendly prank, is okay for the economy. It keeps things interesting. But if that ninja goes crazy and starts stealing lots of coins really fast, it's like a wild party that gets out of control. Suddenly, your money can't buy anything, and you're stuck with a pouch full of worthless coins. So, remember, a little ninja action (moderate inflation) is healthy for the economy, but when it turns into a crazy ninja party (hyperinflation), that's when things get seriously funny in a not-so-good way!
- Think of monetary policy like the remote control for the country's piggy bank. Imagine the central bank has this magical remote. When the economy is getting too hot and people are spending money like crazy (imagine them as spend-happy squirrels), the central bank can press a button on the remote to make it harder for them to get more money. It's like turning down the squirrel's nut-dispensing machine. But if the economy is feeling sluggish, like a sloth on a rainy day, the central bank can press another button to make it easier for people to get money. This helps wake up the economy and get it moving faster. Oh, and if the financial system starts wobbling like a Jenga tower, they can use their remote to add extra support beams to keep everything from crashing down. So, in short, monetary policy is like the remote control that the central bank uses to keep the economy from going nuts, make it move faster when needed, and prevent the financial system from turning into a game of economic Jenga.
- Fiscal policy ay parang yung malaking remote control ng gobyerno sa pera ng bansa. Imahe natin ang gobyerno bilang isang bantayog ng superhero, at may special remote control siya na pang-ayos ng pera ng bansa. Kapag kailangan ng ekonomiya ng dagdag-eksena, inaactivate ng gobyerno yung "Gastos Nang Malaki" button. Parang pag-pindot sa button na 'to, nagkakaroon ng malupet na pyesta at lahat ay nag-ga-gala. Bumibili ng kung anu-ano, kumikita mga negosyo, parang fiesta buong bansa! Pero kapag feeling nila sobrang gulo na, at sobrang mahal na ang mga bilihin, pinipindot nila yung "Tipid Mode" button. Parang lullaby sa ekonomiya, kaya lahat ay inaantok na at nag-iisip muna bago gumastos. Kaya ang fiscal policy ay parang remote control ng gobyerno para sa pera ng bansa - pwede nila gamitin para mag-organize ng party o mag-umpisal ng lullaby, depende sa kailangan ng ekonomiya!
- Si Mang Juan ay isang tindero ng itlog sa palengke. Siya ay palaging masaya dahil laging may bibili ng kanyang itlog. Ngunit isang araw, biglang tumaas ang presyo ng itlog dahil umakyat ang gastos sa pag-aalaga ng mga manok. Sa kabila ng pagtaas ng presyo, ang mga suki ni Mang Juan ay hindi pa rin nag-aalangan na bumili ng itlog sa kanya. Kahit na naging mas mahal na ang itlog, hindi pa rin sila nawawalan ng gana na magluto ng masarap na adobo o sinangag na sinangag. Dito, napagtanto ni Mang Juan na ang demand para sa kanyang mga itlog ay "inelastic." Kahit na tumaas ang presyo, hindi ito masyadong nakaaapekto sa dami ng itlog na binibili ng mga tao. Sa simpleng paraan, ito ay parang sabi ng mga suki ni Mang Juan, "Huwag mo kaming bawian ng itlog, kahit magkano pa 'yan!" Kaya't inelastic ang demand para sa itlog ni Mang Juan, at palaging masaya ang kanyang negosyo!
- Ito ay parang usapan tungkol sa kung gaano kagulo o kakaunti ang kalaban sa isang larong patintero. Kapag marami kayong naglalaro at lahat kayo ay magkasama sa isang maluwag na lugar, parang "perfect competition" yan. Lahat kayo may pantay-pantay na tsansa na manalo at may magagandang tsinelas. Pero kung isa lang ang kalaban mo, at sobrang galing magpatintero, parang "monopoly" yan. Siya lang ang may kontrol at mahirap makalampas sa kanya. Pag may iba-ibang kalaban pero konti lang, pwede itong "oligopoly." Parang apat lang kayong magkakasama sa larong patintero, so medyo mahirap labanan ang isa't isa. Sa madaling salita, market structure ay usapan tungkol sa kung gaano kalakas o kaliit ang kalaban sa isang larong patintero, kung paano nag-aagawan sa customers, at kung gaano ito kagulo. Malalaman mo ito kung madaming naglalaro o iisa lang ang kalaban mo sa patintero!
- Ang utility ay parang "kiligin factor" sa pag-ibig o sa buhay. Ito'y sukatan kung gaano ka-ni-feel ng tao pag ginagamit niya ang isang bagay o serbisyo. Halimbawa, pag kumain ka ng paborito mong ice cream flavor, nakuha mo yung "kiligin" feeling, yan ang utility! Pero pag yung ice cream ay hindi masyadong masarap, mababa ang utility. Ang mga economist, sila yung mga "love guru" ng ekonomiya, gamit ang utility para maipaliwanag kung bakit tayo gumagawa ng mga choices sa buhay, lalo na sa mga bagay na binibili natin. Kasi, gusto natin laging kiligin at masaya! Kaya't sa simpleng salita, ang utility ay parang "kiligin factor" na tumutukoy sa kasiyahan o benepisyo na natatanggap natin mula sa mga bagay o serbisyong ating ini-enjoy.
- A, eto ang trade-off, parang yung bespren mong laging kasama sa lahat ng chikahan. Kapag kasama mo siya, sobrang saya, pero minsan, kailangan mo rin isakripisyo yung solo time mo para sa ibang bagay. Sa economics, trade-off ay parang bespren mo na yung oras mo, pera, at resources ay limitado. Kaya't minsan, kailangan mong isakripisyo o i-give up ang isang bagay para makamit yung iba. Halimbawa, kung bibili ka ng paborito mong kape sa cafรฉ, kailangan mong isakripisyo ang pera mo para dun. Ibig sabihin, hindi mo na magagamit yung pera na 'yun sa ibang bagay, tulad ng masarap na ice cream. So, trade-off ay parang bespren mong kasama sa buhay na nagpapamahagi ng oras at resources mo. Kailangan mo i-decide kung anong bagay ang mas importante at worth it isakripisyo para sa ibang bagay na gusto mo.
- A, alam mo ba yung labor force? Parang mga tao sa pila ng favorite milk tea shop. Yung mga kasama sa pila, either umo-order na o naghahanap pa lang ng milk tea. Sa economics, labor force ay parang pila ng tao sa milk tea shop na ready na magtrabaho o naghahanap pa lang ng trabaho. Sila yung mga tao na kasama sa stats ng employment at unemployment rates. Yung mga umo-order na ng milk tea, employed sila, kasi may trabaho na. Pero yung mga nasa pila pa lang, actively seeking employment, kasi hanap pa sila ng trabaho. Kaya importante ang labor force sa pag-aanalyze ng employment at unemployment rates, parang pagtingin mo sa pila ng milk tea, alam mo kung gaano karaming gutom sa trabaho!
- A, kapital naman, yan yung mga kagamitan at pera na ginagamit sa paggawa ng mga bagay-bagay. Parang superhero tools at budget para sa ekonomiya! Kumbaga, sa isang bakery, yung capital ay parang oven, mixer, at budget para sa harina at kape. Kung wala yun, paano makakagawa ng masarap na tinapay at kape? Kaya importante ang capital sa ekonomiya kasi ito yung nagpapabilis at nagpapaganda ng mga produkto at serbisyo. Para yang magic wand ng ekonomiya na nagpapalakas at nagpapalawak ng kita!
- A, alam mo ba yung mga eksternalitiya? Parang yung di inaasahan na pasabog sa fireworks display sa birthday party! Sa economics, eksternalitiya ay parang mga di inaasahan na epekto ng mga gawain sa ekonomiya sa mga taong hindi directly involved sa gawain na yun. Kung positive eksternalitiya, parang yung pag-aaral mo. Kapag nag-aaral ka, hindi lang ikaw ang nakikinabang kundi buong society din dahil mas maraming edukado, mas maunlad ang bansa. Pero may negative eksternalitiya rin, parang yung usok ng mga sasakyan. Kapag nagmumaneho ka at nagpopollute ang sasakyan mo, hindi lang ikaw ang apektado kundi pati ang environment at ibang tao sa paligid mo. Kaya importante ang pag-aaral ng eksternalitiya sa ekonomiya, para alam natin ang mga di inaasahang epekto ng ating mga gawain at para magawan ng paraan na hindi masyadong makakasama sa iba. Parang pagpapaputok sa fireworks, gusto natin maging masaya ang lahat, hindi lang yung may birthday
- Oh, alam mo ba yung monetary unit? Ito yung superstar na currency na ginagamit sa ekonomiya. Parang ruler na ginagamit para sukatin ang halaga ng mga bagay at serbisyo. Kumbaga, sa mundo ng pera, ito yung pangunahing bituin ng show. Kung wala itong monetary unit, parang magulo ang ekonomiya, kasi hindi natin alam kung magkano ang halaga ng mga bagay. Halimbawa, kung peso ang monetary unit sa Pilipinas, alam natin ang halaga ng isang kilo ng bigas, isang kilong bawang, o kahit isang ticket sa sine. Ito yung nagpapadali ng mga transaksyon at nagbibigay ng common language sa ekonomiya. Kaya mahalaga ang monetary unit, ito yung superstar na nagdadala ng kasunod-sunod na kaganapan sa buhay ng pera!
- Ito yung kwento tungkol sa trade balance: Parang isang malupit na laban sa basketball, pero ang kalaban mo ay iba't ibang bansa. Kapag sinasabi natin na may "surplus" sa trade balance, ibig sabihin mas marami tayong na-export na produkto at serbisyo kaysa sa mga produkto at serbisyong inaangkat natin mula sa ibang bansa. Parang sa basketball, tayo yung mas maraming points kaysa kalaban, so panalo tayo! Ngunit kapag may "deficit" sa trade balance, ito'y nangyayari kapag mas marami tayong inaangkat na produkto at serbisyo kaysa sa mga na-e-export natin. Ibig sabihin, parang sa basketball, kalaban natin ay mas maraming points kaysa sa atin, so talo tayo sa laro. Sa madaling sabi, ang trade balance ay parang scorecard ng bansa sa larong pang-ekonomiya. Kung mas marami tayong na-e-export, maganda ang score natin. Pero kung mas marami tayong inaangkat, medyo kulang tayo sa puntos.