Definitions

Question 1

Demand

Answer 1

The willingness of consumers to buy a good or service over a period of time

Question 2

Supply

Answer 2

The quantity of a good or service that producers are willing and able to sell over a period of time.

Question 3

Competition

Answer 3

The rivalry between firms in the same market.

Question 4

Economies of scale

Answer 4

The reduction in per unit costs that a firm experiences as it grows larger.

Question 5

Diseconomies of scale

Answer 5

The increase in average costs that a firm experiences when it grows too large.

Question 6

Monopoly

Answer 6

A market dominated by a single large firm.

Question 7

Oligopoly

Answer 7

A market dominated by a few large firms.

Question 8

Business aims

Answer 8

The goals of a business, which may include maximizing profit, caring for customers, and engaging in charitable work.

Question 9

Collusion

Answer 9

An agreement between dominant firms in an industry to restrict competition.

Question 10

Barriers to entry

Answer 10

Factors that make it difficult or costly for new firms to enter a market.

Question 11

Externalities

Answer 11

The spillover effects of production or consumption, such as pollution from a factory impacting the health of an area.

Question 12

Non-price competition

Answer 12

Competition based on factors other than price, such as advertising, promotions, and customer service.

Question 13

Public sector

Answer 13

The portion of an economy that is owned and operated by the government, providing goods and services to the public.

Question 14

Private sector

Answer 14

The portion of an economy that is owned and operated by individuals or companies, seeking to maximize profits.

Question 15

Privatisation

Answer 15

The act of selling a business controlled by the government in the public sector to individuals in the private sector

Question 16

Mixed economy

Answer 16

An economic system that relies on both the public and private sectors to provide goods and services.

Question 17

Market Failure

Answer 17

An inefficient distribution of goods and services in a free market.

Question 18

The free rider problem

Answer 18

The exploitation of a common resource without contributing to its maintenance or upkeep.

Question 19

Total revenue

Answer 19

The total income earned from selling a good or service

Question 20

Profit

Answer 20

The excess of revenue over costs.

Question 21

Labour

Answer 21

The human element involved in the process of production.

Question 22

Division of labour

Answer 22

The breaking down of the production process into specialized tasks for individual workers.

Question 23

Labour market

Answer 23

The market where employers seek to hire the best employees and where employees seek the most satisfying jobs.

Question 24

Derived demand

Answer 24

Demand for one good or service that is influenced by the demand for another good or service.

Question 25

Price elasticity of demand

Answer 25

The responsiveness of demand to changes in price.

Question 26

Inelastic demand

Answer 26

A situation in which a change in price results in a smaller change in the quantity demanded.

Question 27

Price elasticity of supply

Answer 27

The responsiveness of supply to changes in price.

Question 28

Production possibility curve

Answer 28

A graph showing the combination of goods that can be produced with all available resources.

Question 29

Trade unions

Answer 29

Organizations that advocate for the rights and interests of workers, such as by negotiating with employers for higher wages and improved working conditions.

Question 30

Congestion

Answer 30

The overcrowding of a system, such as a road or public transportation, leading to delays and inefficiency.

Question 31

Subsidies

Answer 31

Financial assistance provided by the government to a firm in order to increase competition and encourage production.

Question 32

Innovation

Answer 32

The development of new or improved goods or services by a firm.

Question 33

Specialisation

Answer 33

Production of a limited range of goods by firms or individuals

Question 34

External benefits

Answer 34

When the 3rd party benefits from outside the original economic transaction

Question 35

Productivity

Answer 35

The rate at which goods are produced and output of goods in relation to time, work, price, money needed to produce

Question 36

Market Forces

Answer 36

The supply and demand in a market

Question 37

Unemployment

Answer 37

refers to the condition of those that are able to and willing to work but are unable to find a job

Question 38

Economic Growth

Answer 38

The increase in the level of output by a nation

Question 39

GDP

Answer 39

The total value of all goods and services produced and sold within a year

Question 40

Inflation

Answer 40

A continuing rise in prices over a period of time

Question 41

Disinflation

Answer 41

Inflation rate is positive but falling

Question 42

Deflation

Answer 42

Inflation rate is negative and prices decrease

Question 43

Income inequality

Answer 43

Refers to the differences in income that exist between different groups of earners in a society

Question 44

Progressive Tax

Answer 44

The proportion of income tax paid rises as the income of tax payer rises

Question 45

Regressive Tax

Answer 45

Where the proportion of income paid in tax rises as the income of the tax payer decreases

Question 46

Tailings

Answer 46

Waste material left over

Question 47

Tax allowances

Answer 47

Amount of money that firms are allowed to offset against tax by the government

Question 48

Fiscal Policy

Answer 48

Decisions about government spending, tax and levels of borrowing that affects aggregate demand in the economy

Question 49

Direct Taxes

Answer 49

Taxes levied on income earned by firms and individuals

Question 50

Indirect taxes

Answer 50

Tax levied on spending (such as VAT tax)

Question 51

Fiscal Deficit

Answer 51

Government spending > Government revenue

Question 52

Fiscal Surplus

Answer 52

Government Spending < Government revenue

Question 53

Expansionary Fiscal Policy

Answer 53

Fiscal measures stimulating aggregate demand in the economy

Question 54

Contractionary Fiscal Policy

Answer 54

Fiscal measures reducing aggregate demand in the economy

Question 55

Supply side policies

Answer 55

Government measures designed to increase aggregate supply in the economy

Question 56

Monetary policy

Answer 56

Use of interest rates & the money supply to control aggregate demand

Question 57

Mortgage

Answer 57

Legal arrangement of borrowing money from a financial institution in order to buy property. Money is paid back over a prolonged period of time

Question 58

Quantitative Easing

Answer 58

Buying of financial assets (like government bonds) from commercial banks resulting in a flow of money from central banks to commercial banks

Question 59

Balance of Payments

Answer 59

Record of all transactions relating to international trade between one country and the rest of the world over 1 year

Question 60

Current Account

Answer 60

Where all exports & Imports are recorded

Question 61

Current Balance

Answer 61

Difference between total exports and total imports

Question 62

Current Account Surplus

Answer 62

Value of exports exceeds value of imports

Question 63

Current Account Deficit

Answer 63

Value of Imports exceeds value of exports

Question 64

Balance of Trade

Answer 64

Difference between visible exports and visible imports

Question 65

Absolute Poverty

Answer 65

Where people don’t have enough resources to meet all their basic human needs

Question 66

Relative Poverty

Answer 66

Poverty that’s defined relative to existing living standards for the average individual