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Introduction To Applied Economics
Introduction To Applied Economics
Relative poverty-refers to the structure on how the ANALYSIS OF DEMAND AND SUPPLY
national income is being distributed among
households in an economy. The demand curve is a schedule that shows
-is measured by the Lorenz curve and the level of consumption at alternative prices at a
the Gini coefficient. given point in time. The demand curve of a commodity
summarizes the benefits derive by the consumers
Lorenz curve shows the share of the various household from the purchase of a good or service. On the other
groups on the total national income. hand, the supply curve shows the amount of output
producers are willing to sell at alternative prices at a
Gini coefficient on the other hand, is a measure of given point in time. The supply curve incorporates the
income inequality derived from the Lorenz curve. sacrifices and costs incurred by the seller in producing
a commodity.
Knowledge capital is formed through heavy
WHAT IS A DEMAND CURVE?
investments in higher education, science and
technology and research and development.
The first major actor in a market is the
consumer is the consumer whose primary objective is
Technology – is the manner of processing raw
to purchase a commodity because it can give him/her
materials or intermediate inputs into transformed
benefits. His/Her inclination to purchase is indicated
outputs through the use of factor inputs.
by the demand curve.
1. Price Ceiling
2. Price Floor
3. Application in the Labor Market (see
discussion and graphic illustration in the last
three pages)
4. Minimum Wage as Price Floor (see discussion
and graphic illustration in the last three pages)
5. Application in the Foreign Exchange Market
6. Labor Migration and the Overseas Filipino
Workers (OFW’s)
7. Determination of Rent
Market Structures
1. Perfect Competition
2. Monopoly
3. Oligopoly
4. Monopolistic Competition
Market Structures and Implications for
Entrepreneurs
1. Investment and Interest Rate
2. Rentals and the Cost of
Business Operations
3. Minimum Wage
4. Taxes (business permits, real
estate taxes, sales taxes, value
added taxes, income taxes and
taxes on traded goods and
services).