IB terms Flashcards
(328 cards)
1
Q
What is absolute advantage?
A
This is where a country is able to produce more output than other countries using the same input of factors of production.
2
Q
Define absolute poverty.
A
Absolute poverty is measured in terms of the basic need for survival.
3
Q
What is actual growth?
A
This occurs when previously unemployed factors of production are brought in to use.
4
Q
What is adverse selection?
A
This occurs when a buyer and seller do not have the same information, causing a transaction to take place based upon uneven terms.
5
Q
Define aggregate demand.
A
The total spending in an economy consisting of consumption, investment, government expenditure and net exports.
6
Q
What does the aggregate demand curve show?
A
A curve showing the relationship between the average price level and real GDP.
7
Q
What is aggregate supply (AS)?
A
The total amount of domestic goods and services supplied by businesses and the government.
8
Q
Define allocative efficiency.
A
The level of output where marginal cost is equal to average revenue.
9
Q
What is allocative inefficiency?
A
Occurs where the marginal social cost of producing a good is not equal to the marginal social benefit.
10
Q
What does anchoring refer to in decision-making?
A
Anchors are mental reference points used to make decisions.
11
Q
What is anti-monopoly regulation?
A
Policies that are intended to regulate the market share of an individual company.
12
Q
Define appreciation in terms of currency.
A
An increase in the value of one currency in terms of another currency in a floating exchange rate system.
13
Q
What is appropriate technology?
A
Technology that caters to the particular economic, social, and environmental characteristics of its users.
14
Q
What is asymmetric information?
A
Where one party in an economic transaction has access to more or better information than the other party.
15
Q
Define automatic stabilizers.
A
Features of government fiscal policy that automatically counter-balance fluctuations in economic activity.
16
Q
What is the average tax rate?
A
The proportion of a person’s income that is paid in tax, usually expressed as a percentage.
17
Q
What does the balance of payments represent?
A
A record of the value of all the transactions between the residents of a country with the residents of all other countries.
18
Q
Define balance of trade in goods.
A
A measure of revenue received from the exports of tangible goods minus expenditure on imports of tangible goods.
19
Q
What is the balance of trade in services?
A
A measure of revenue received from the exports of services minus expenditure on imports of services.
20
Q
What is behavioral economics?
A
A branch of economic research that adds elements of psychology to traditional models.
21
Q
What does bounded rationality suggest?
A
Most consumers and businesses do not have enough information to make fully-informed choices.
22
Q
Define bounded self-control.
A
Consumers often do not stop consuming even when it is sensible to do so.
23
Q
What is bounded selfishness?
A
Concern for the well-being of others.
24
Q
What is a budget deficit?
A
A situation where planned government spending exceeds planned government revenue.
25
What is business confidence?
An economic indicator that measures the degree of optimism that business managers feel about the economy.
26
What does the business cycle illustrate?
Periodic/cyclical fluctuations in economic activity.
27
Define capital in economic terms.
The factor of production that comes from investment in physical capital and human capital.
28
What is a capital account?
A measure of the buying and selling of assets between countries.
29
What is capital flight?
Occurs when money and other assets flow out of a country to seek a 'safe haven' in another country.
30
What are capital transfers?
A measure of net monetary movements gained or lost through various actions.
31
What are carbon (emissions) taxes?
Taxes levied on the carbon contents of fuel.
32
Define central bank.
The government’s bank responsible for an economy’s monetary policy.
33
What does ceteris paribus mean?
A Latin expression meaning 'other things being equal'.
34
What is choice architecture?
The layout, sequencing, and range of choices that affect decisions.
35
What is a circular economy?
An economic system that aims to redefine growth focusing on society-wide benefits.
36
Define circular flow of income.
A simplified model of the economy that shows the flow of money through the economy.
37
What does the Coase theorem state?
Parties can bargain to reach an efficient outcome regardless of property rights.
38
What is collusive oligopoly?
Where a few firms act together to avoid competition.
39
Define common access resources.
Natural resources over which there is no established private ownership.
40
What is a common market?
A customs union with common policies on product regulation.
41
What is comparative advantage?
Where a country can produce a good at a lower opportunity cost than another country.
42
Define competitive supply.
Exists where products are produced by the same factors of production.
43
What are complements in economics?
Goods used in combination with each other.
44
What are concentration ratios?
Functions showing the percentage of market share held by the largest firms in an industry.
45
Define consumer confidence.
An economic indicator that measures the degree of optimism consumers feel about the economy.
46
What are consumer nudges?
Positive reinforcement used to influence consumer behavior.
47
What is the consumer price index (CPI)?
A measure of the average rate of inflation based on a basket of goods.
48
What is consumer surplus?
The additional benefit received by consumers paying less than they are willing to pay.
49
Define consumption (C).
Spending by households on consumer goods and services over a period of time.
50
What is contractionary monetary policy?
A policy designed to decrease aggregate demand.
51
What is corporate social responsibility?
An approach taken by firms to produce ethically towards community and environment.
52
Define cost-push inflation.
Inflation caused by an increase in the costs of production.
53
What is credit creation?
The ability of banks to expand deposits by lending multiples of the amount.
54
What is crowding out?
When government borrowing raises interest rates and reduces private investment.
55
Define current account.
A measure of the flow of funds from trade in goods and services, plus net investment income flows.
56
What is a current account deficit?
Where revenue from exports is less than expenditure on imports.
57
What is a current account surplus?
Where revenue from exports is greater than expenditure on imports.
58
Define current transfers.
Transfers recorded in the balance of payments without something in return.
59
What is a customs union?
An agreement where countries trade freely among themselves and adopt common external barriers.
60
What is cyclical (demand-deficient) unemployment?
Disequilibrium unemployment due to insufficient demand in the economy.
61
Define debt relief (cancellation).
The act of eliminating debt owed by a least developed country.
62
What are default choices?
When consumers are automatically enrolled in a system.
63
What is deflation?
A persistent fall in the average level of prices.
64
Define deflationary/recessionary gap.
When total spending is less than the full employment level of output.
65
What is demand?
The willingness and ability of consumers to purchase a quantity of a good.
66
What does the demand curve show?
The relationship between the price of a good and the quantity demanded.
67
Define demand management.
A policy emphasizing government intervention in managing aggregate demand.
68
What is demand-pull inflation?
Inflation caused by increasing aggregate demand.
69
What are demerit goods?
Goods considered harmful that would be over-provided by the market.
70
Define depreciation.
A fall in the value of one currency in terms of another currency.
71
What is deregulation?
A policy where the government reduces regulations governing firms.
72
What is devaluation?
A decrease in the value of a currency in a fixed exchange rate system.
73
Define development aid.
Aid consisting of grants, concessional loans, project aid, and programme aid.
74
What is disinflation?
A fall in the rate of inflation.
75
Define disposable income.
The remaining income available for an individual to spend or save.
76
What is dumping?
Selling a good in another country at a price below its unit cost of production.
77
What is economic development?
Improvement in standards of living, reduction in poverty, and increased freedom.
78
Define economic growth.
The growth of the real value of output in an economy over time.
79
What is economic well-being?
A multi-dimensional concept relating to the level of prosperity and quality of living standards.
80
What are economically least developed countries (ELDCs)?
Countries classified by the UN as low-income with severe structural impediments.
81
What is economics?
The science that studies human behavior as a relationship between ends and scarce resources.
82
Define economies of scale.
Unit cost advantages from increasing the scale of operations.
83
What does efficiency refer to?
The ratio of useful output to total input.
84
What is elasticity?
A measure of the responsiveness of something to a change in one of its determinants.
85
Define elasticity of demand for exports.
The responsiveness of the quantity demanded of exports to a change in price.
86
What is elasticity of demand for imports?
The responsiveness of the quantity demanded of imports to a change in price.
87
What does the Engel curve show?
The relationship between income and quantity demanded.
88
Define entrepreneurship.
The factor of production involving organizing and risk-taking.
89
What is equilibrium?
A state of rest, self-perpetuating in the absence of outside disturbance.
90
What is equity in economics?
The concept or idea of fairness.
91
Define excess demand.
Occurs when the price of a good is lower than the equilibrium price.
92
What is excess supply?
Occurs when the price of a good is higher than the equilibrium price.
93
What is an exchange rate?
The value of one currency expressed in terms of another.
94
Define expansionary monetary policy.
A policy designed to increase aggregate demand.
95
What are expenditure reducing policies?
Policies that attempt to reduce overall expenditure in the economy.
96
What are expenditure switching policies?
Policies that attempt to switch consumer expenditure from imports to domestically produced goods.
97
What is export promotion?
Strategies based on increased international trade to grow the economy.
98
What does export revenue represent?
Value of exports earned by producers.
99
Define exports.
Goods and services produced in one country and purchased by consumers in another.
100
What is external balance?
The value of exports minus the value of imports.
101
What are externalities?
External costs or benefits to a third party when a good or service is produced or consumed.
102
What are factors of production?
The four resources that allow an economy to produce its output: land, labour, capital, and entrepreneurship.
103
What is Fairtrade?
A scheme that certifies products from producers in least developed countries.
104
Define financial account.
A measure of the net change in foreign ownership of domestic financial assets.
105
What are firms in economics?
The productive units in the economy that turn factors of production into goods.
106
What is fiscal policy?
A demand-side policy using changes in government spending and taxation.
107
Define fixed exchange rate.
An exchange rate regime where the value of a currency is fixed or pegged.
108
What is the Fairtrade mark?
A registered mark encouraging consumers to buy products knowing producers have been paid a fair price and produced under approved conditions.
109
What does a financial account measure?
The net change in foreign ownership of domestic financial assets.
110
What do firms represent in the economy?
The productive units that turn the factors of production into goods and services.
111
Define fiscal policy.
A demand-side policy using changes in government spending and/or direct taxation to achieve economic objectives relating to inflation and unemployment.
112
What is a fixed exchange rate?
An exchange rate regime where the value of a currency is fixed or pegged to another currency or commodity.
113
What characterizes a floating exchange rate?
The value of a currency is determined solely by the demand for and supply of the currency on the foreign exchange market.
114
What is foreign aid?
The international transfer of capital, goods, or services from a country or international organization for the benefit of a recipient country.
115
Define foreign direct investment (FDI).
A long-term investment by a multinational corporation in a foreign country where the foreign investor owns more than 10% of the domestic company.
116
What is the foreign sector?
The segment of the circular flow of income that includes exports and imports.
117
What does framing refer to in economics?
The way choices are described and presented, affecting tastes and preferences.
118
What are free goods?
Goods that are not limited in supply and do not have an opportunity cost.
119
What is a free market economy?
An economy where the means of production are privately held and market forces determine production decisions.
120
Define the free rider problem.
When people benefit from resources, goods, or services without paying for them, leading to overconsumption.
121
What is free trade?
International trade without barriers such as tariffs, quotas, or subsidies.
122
What is a free trade agreement?
An agreement between countries to trade freely among themselves while retaining the ability to trade with others as they wish.
123
What is frictional unemployment?
Equilibrium unemployment that exists when people are in the process of searching for another job after leaving one.
124
What is the full employment level of output?
The output level produced by the economy when there is only natural unemployment.
125
Define the Gini coefficient.
A coefficient measuring the inequality of income distribution, with higher values indicating more inequality.
126
What constitutes government (national) debt?
The total outstanding borrowing of a government, including internal and external debt.
127
What is government spending (G)?
Spending by governments on goods and services.
128
Define gross domestic product (GDP).
The total money value of all final goods and services produced in an economy in a given time period.
129
What is gross national income (GNI)?
The total money value of all final goods and services produced in an economy, plus net property income from abroad.
130
What does growth in production possibilities indicate?
An outward shift of the PPC curve caused by an increase in the quantity or quality of factors of production.
131
What is the Happiness Index?
An index used to measure the collective happiness and well-being of a population.
132
What is the Happy Planet Index?
An index combining well-being, life expectancy, inequality of outcomes, and ecological footprint to measure efficient resource use for happy lives.
133
What do households represent in the economy?
Groups of individuals who are consumers of goods and services and providers of factors of production.
134
Define the Human Development Index (HDI).
A composite index measuring a long and healthy life, improved education, and a decent standard of living.
135
What is the Human Opportunity Index (HOI)?
An index measuring how individual circumstances affect a child's access to basic opportunities.
136
What is humanitarian aid?
Aid given to alleviate short-term suffering, including food and medical aid.
137
What is imperfect competition?
A market structure showing some, but not all, features of perfect competition.
138
What is imperfect information?
When some stakeholders in an economic transaction have more access to knowledge than others.
139
What does import expenditure refer to?
The value of spending on imports.
140
Define import substitution.
Strategies to encourage domestic production of goods instead of importing them.
141
What are imports?
Goods and services purchased by consumers that have been produced in another country.
142
What is the incentive effect?
Prices give producers the incentive to increase or decrease the quantity supplied based on price changes.
143
Define income in economic terms.
A flow of earnings from using factors of production to produce goods and services.
144
What is the income effect?
When a decrease in the price of a good increases consumers' real income, allowing them to purchase more.
145
What does income elasticity of demand (YED) measure?
The responsiveness of demand for a good or service to a change in income.
146
What are indirect taxes?
Taxes on expenditure added to the selling price of goods and services.
147
Define an infant industry.
A new industry that should be protected from foreign competition until it can achieve economies of scale.
148
What are inferior goods?
Goods where demand decreases as income increases.
149
What is inflation?
A sustained increase in the general level of prices and a fall in the value of money.
150
Define the inflation rate.
The percentage change of a price index over a certain time period.
151
What is an inflationary gap?
When total spending exceeds the full employment level of output, causing inflation.
152
What is the informal market?
The part of the economy that is neither taxed nor monitored by the government.
153
Define infrastructure.
The large-scale capital provided by government necessary for economic activity.
154
What are injections in economics?
Investment, government expenditure, and export revenues that add spending to the circular flow of income.
155
What is the interest rate?
The price of credit or borrowed money.
156
What does international trade involve?
The exchange of goods or services between two countries.
157
Define investment (I) in economics.
The addition of capital stock to the economy or expenditure by firms on capital.
158
What does the J-curve suggest?
In the short term, a fall in currency value may worsen the current account deficit before improving it in the long term.
159
What is joint supply?
Goods produced together, where the production of one involves the production of another.
160
What is the Keynesian multiplier?
The ratio of an induced change in national income to an original change in injections into the circular flow of income.
161
What is the Keynesian revolution?
An economic school of thought advocating government management of aggregate demand.
162
What does labor refer to in economics?
The physical and mental contribution of the workforce to production.
163
Define labor market flexibility.
The speed with which labor markets adapt to changes in production or the economy.
164
What is a labor union?
An organization of workers aiming to improve working conditions and payments through collective bargaining.
165
What is laissez faire?
The view that markets should operate with minimal government intervention.
166
What does land represent in economics?
The physical factor of production, consisting of natural resources.
167
What is the law of demand?
As the price of a good falls, the quantity demanded will normally increase.
168
Define the law of supply.
As the price of a good rises, the quantity supplied will normally rise.
169
What are leakages in the circular flow of income?
Savings, taxes, and import expenditure that remove spending from the circular flow.
170
What is long run aggregate supply (LRAS)?
Aggregate supply that depends on the resources in the economy, increased only by improvements in production factors.
171
What does the long-run Phillips curve indicate?
There is no long-term trade-off between inflation and unemployment, with a natural rate of unemployment.
172
What is the Lorenz curve?
A curve showing the distribution of income in an economy, indicating inequality.
173
Define macroeconomics.
The study of aggregate economic activity and how the economy as a whole works.
174
What is a managed exchange rate?
An exchange rate that floats but is subject to intervention by domestic authorities.
175
What are mandated choices?
Choices consumers are required to state their preference for.
176
What are manufactured goods?
Goods that have been processed by workers.
177
What are marginal costs?
The additional costs of producing one more unit of output.
178
Define marginal propensity to consume (MPC).
The proportion of each extra income amount spent on domestically produced goods.
179
What is marginal propensity to import (MPM)?
The proportion of each extra income amount spent on imported goods.
180
What does marginal propensity to save (MPS) represent?
The proportion of each extra income amount that is saved by households.
181
Define marginal propensity to tax (MPT).
The proportion of each extra income amount taken in tax.
182
What is marginal social benefit (MSB)?
The extra benefit to society of consuming an additional unit of output.
183
What does marginal social cost (MSC) represent?
The extra cost to society of producing an additional unit of output.
184
What is the marginal tax rate?
The proportion of a person's additional income paid in tax.
185
Define marginal utility.
The extra utility derived from consuming one more unit of a good or service.
186
What is a market?
A place where buyers and sellers come together to conduct economic transactions.
187
What is market demand?
The horizontal sum of individual demand curves for a product from all consumers in a market.
188
What is market equilibrium?
The point where quantity demanded equals quantity supplied, determining market price.
189
Define market failure.
The failure of markets to produce at the point where community surplus is maximized.
190
What is the market mechanism?
The system where demand and supply determine product prices.
191
What is market power?
The ability of a firm to raise and maintain prices above competitive levels.
192
What is market supply?
The horizontal sum of individual supply curves for a product from all producers in a market.
193
Define the Marshall-Lerner condition.
A depreciation of a currency improves the current account balance if the sum of export and import demand elasticity is greater than one.
194
What are merit goods?
Goods considered beneficial that would be under-provided by the market.
195
What is microeconomics?
The study of individual consumer and firm behavior and market price determination.
196
What is microfinance?
The provision of small loans to poor entrepreneurs lacking access to traditional banking.
197
What are minimum reserve requirements?
The minimum amount of reserves that commercial banks must maintain to back their loans.
198
Define a mixed economy.
An economy with elements of planning and the free market.
199
What is the monetarist/new classical revolution?
An economic school arguing that money supply changes significantly impact economic growth.
200
What is monetary policy?
A demand-side policy using changes in money supply or interest rates to achieve economic objectives.
201
What is a monetary union?
Where two or more countries share the same currency and have a common central bank.
202
Define money supply.
The total value of monetary assets available in an economy at a specific time.
203
What is monopolistic competition?
A market structure with many buyers and sellers producing differentiated products.
204
Define a monopoly.
A market structure with only one firm, which may or may not have barriers to entry.
205
What is moral hazard?
When a party provides misleading information and changes behavior after a transaction.
206
What is the Multidimensional Poverty Index (MPI)?
An international measure of acute poverty covering deprivations in education, health, and living standards.
207
What is national income?
The total value of the final output of new goods and services produced in a country in one year.
208
What is the natural rate of unemployment?
The rate of unemployment consistent with a stable rate of inflation.
209
Define necessity goods.
Goods where demand increases with income, but less than proportionally.
210
What are negative externalities of consumption?
Negative effects suffered by a third party when a good or service is consumed.
211
What are negative externalities of production?
Negative effects suffered by a third party when a good or service is produced.
212
What are net exports (X-M)?
Export revenues minus import expenditure.
213
Define nominal gross domestic product.
The total money value of all final goods and services produced in an economy at current values.
214
What are nominal interest rates?
Interest rates that have not been adjusted for inflation.
215
What is a non-collusive oligopoly?
An oligopoly where firms do not engage in price-fixing agreements.
216
What are the negative effects suffered by a third party when a good or service is produced?
Negative externalities
## Footnote
These are costs that affect individuals who did not choose to incur those costs.
217
How is net exports calculated?
Export revenues minus import expenditure
218
What is nominal gross domestic product?
The total money value of all final goods and services produced in an economy in a given time period, at current values
219
What are nominal interest rates?
Interest rates that have not been adjusted for inflation
220
Define non-collusive oligopoly.
An oligopoly where firms do not fix prices or output, leading to stable prices and non-price competition
221
What does non-excludable mean?
It is impossible to prevent someone from consuming a good or service
222
What is a non-government organization (NGO)?
An organization that exists to promote economic development and/or humanitarian ideals
223
What are non-produced, non-financial assets?
Net international sales and purchases of non-produced assets, such as land and intangible assets
224
Define normal goods.
Goods where demand increases as income increases
225
What is normative economics?
The study of areas in economics that are open to personal opinion and belief
226
What is nudge theory?
The use of nudges to improve life and wellbeing of people and society
227
What is the OECD Better Life Index?
An index to compare well-being across countries based on 11 essential topics
228
What is official borrowing?
International borrowing by a government to cover a current account deficit
229
What characterizes an oligopoly?
A market structure dominated by a few large firms
230
What are open market operations?
Buying or selling government securities to control money supply
231
Define opportunity cost.
The next best alternative foregone when making an economic decision
232
What describes perfect competition?
A market structure with many small firms producing identical products
233
What is perfect information?
All stakeholders have access to the same knowledge in an economic transaction
234
Define perfectly elastic demand.
An increase in price leads to a fall in quantity demanded to zero
235
What is the Phillips curve?
A curve showing the relationship between unemployment and inflation rates
236
What are Pigouvian taxes?
Indirect taxes imposed to eliminate external costs of negative externalities
237
What is a planned economy?
An economy where the means of production are collectively owned and state-controlled
238
What does the Porter hypothesis state?
Strict environmental regulations can lead to efficiency and innovation
239
What is portfolio investment?
Purchasing financial investments like shares and bonds for returns
240
What is positive discrimination?
Giving advantage to groups treated unfairly in the past
241
Define positive economics.
Areas of economics that can be proven correct or incorrect
242
What are positive externalities of consumption?
Beneficial effects enjoyed by a third party when a good is consumed
243
What is poverty?
The scarcity or lack of material possessions or money
244
What is a poverty trap?
A circular chain of events that starts and ends in poverty
245
What is a preferential trade agreement?
An agreement to give preferential access to certain products from trading partners
246
What is a price ceiling?
A maximum price imposed below the equilibrium price
247
Define price controls.
Prices imposed by an authority above or below the equilibrium market price
248
What is a price deflator?
A coefficient that removes the impact of inflation from economic statistics
249
What does price elasticity of demand (PED) measure?
Responsiveness of quantity demanded to a change in price
250
What is the significance of price expectations?
They influence consumer demand based on forecasts of future prices
251
What is a price floor?
A minimum price set above the market price
252
What is the price mechanism?
The system where demand and supply determine prices
253
Define primary commodities.
Raw materials produced in the primary sector
254
What is privatisation?
The government selling public assets to the private sector
255
What is producer surplus?
The benefit received by producers from selling at a higher price than expected
256
What does the production possibility curve (PPC) show?
Maximum combinations of goods/services produced in a given time period
257
Define productive capacity.
The maximum possible output of an economy
258
What is profit maximisation?
Producing where profits are greatest: where marginal revenue equals marginal cost
259
What are property rights?
Exclusive legal authority to own and use a resource
260
What is a proportional tax?
A taxation system where tax is levied at a constant rate as income rises
261
What are public goods?
Goods or services not provided by the market due to non-rivalry and non-excludability
262
What are public/private partnerships?
Contracts between public agencies and private firms
263
What is purchasing power parity (PPP)?
A theory stating exchange rates are in equilibrium when purchasing power is the same
264
What is quantitative easing?
An expansionary policy where a central bank buys government bonds to stimulate the economy
265
Define quantity demanded.
The willingness and ability to purchase a quantity of a good at a certain price
266
What is quantity supplied?
Willingness and ability to produce a quantity of a good at a given price
267
What are quasi-public goods?
Goods that partially satisfy non-rivalry and non-excludability conditions
268
What is a quota?
Import barriers that limit the quantity or value of imports
269
What is rationing?
An artificial control on the distribution of scarce resources
270
Define real GDP.
GDP adjusted for inflation
271
What is real GDP per person (per capita)?
Real GDP divided by the population
272
What does real interest rates mean?
Interest rates adjusted for inflation
273
What is relative poverty?
A comparative measure of poverty based on specified income levels
274
What are remittances?
Money transfers by foreign workers to individuals in their home country
275
What are reserve assets?
Foreign currencies and precious metals held by governments from international trade
276
What are restricted choices?
Consumer choices that are limited but still exist
277
What is revaluation?
An increase in the value of a currency in a fixed exchange rate system
278
Define rivalrous.
Goods/services where consumption by one prevents others from consuming
279
What are rules of thumb?
Mental shortcuts for decision-making
280
What is satisficing?
Covering opportunity costs without pursuing maximum profits
281
What is Say’s Law?
Production of goods creates its own demand
282
What is scarcity?
Limited availability of economic resources relative to unlimited demand
283
What is seasonal unemployment?
Unemployment due to seasonal job patterns
284
What is short-run aggregate supply (SRAS)?
Aggregate supply that varies with demand and shifts with production costs
285
What does the short-run Phillips curve show?
The trade-off between inflation and unemployment
286
Define signalling.
Sending signals to reveal relevant information in economic transactions
287
What is the signalling effect?
Prices signal producers to adjust supply and consumers to adjust demand
288
What is social conformity?
Influence of social norms on behavior and choices
289
What is a social enterprise?
A company aimed at achieving social impact rather than profit
290
What is a social safety net?
Services provided to prevent vulnerable households from falling into poverty
291
What are social sciences?
Studies of people's interactions within society
292
What is social/community surplus?
Combination of consumer surplus and producer surplus
293
What is socially optimum output?
Where marginal social cost equals marginal social benefit
294
What is a stakeholder?
Someone with an interest in an economic activity
295
Define standard of living.
Level of wealth, comfort, and material goods available to a socioeconomic class
296
What is structural unemployment?
Unemployment caused by a mismatch between skills and available jobs
297
What are subsidies?
Financial support paid by governments to firms
298
What is an international subsidy?
Money paid by the government to a firm per unit of output for competitive advantage
299
Define substitutes.
Goods that can be used in place of each other
300
What is the substitution effect?
Incentive to buy more of a product when its price falls relative to others
301
What is supply?
Willingness and ability to produce a quantity of a good or service
302
What does the supply curve show?
Relationship between price and quantity supplied
303
What are supply-side policies?
Policies designed to shift the long run aggregate supply curve rightward
304
Define sustainability.
Meeting present needs without compromising future generations
305
What is sustainable development?
Development that meets present needs without compromising future generations
306
What is a tariff?
A tax on imports to protect domestic industries
307
What are tastes in economics?
Subjective preferences of consumers
308
What is total revenue?
Aggregate revenue from the sale of a quantity of output
309
What are tradable permits?
Permits issued to pollute that can be traded among firms
310
What is trade liberalisation?
The process of reducing barriers to international trade
311
What is trade protection?
Economic policy to limit imports and encourage exports
312
What is the tragedy of the commons?
Overuse of common resources leading to depletion
313
What are the UN sustainable development goals (SDGs)?
17 global goals to end poverty, fight inequalities, and tackle climate change
314
Define unemployment.
Being eligible for work, actively looking, but without a job
315
What are unemployment benefits?
Payments to unemployed individuals actively seeking work
316
What is the unemployment rate?
The percentage of unemployed workers in the total workforce
317
What is unitary elastic demand?
A change in price leads to an equal proportional change in quantity demanded
318
What are unemployment benefits?
Payments, usually made by the government, to people who are unemployed (and actively seeking employment)
## Footnote
Unemployment benefits help support individuals during periods of joblessness.
319
How is the unemployment rate calculated?
The number of unemployed workers expressed as a percentage of the total workforce
## Footnote
This metric helps gauge the health of the labor market.
320
What is unitary elastic demand?
A change in the price of a good or service leads to an equal and opposite proportional change in the quantity demanded of the good or service (PED would be equal to one)
## Footnote
This indicates that total revenue remains constant when the price changes.
321
What is unitary elastic supply?
A change in the price of a good or service leads to an equal proportional change in the quantity supplied of the good or service (PES would be equal to one)
## Footnote
This reflects a balanced response of suppliers to price changes.
322
What is universal basic income?
A regular cash payment given to all on an individual basis, without means test or work requirement
## Footnote
This concept aims to provide financial security to all citizens.
323
What does utility measure?
A measure of the satisfaction derived from purchasing a good or service
## Footnote
Utility is a key concept in understanding consumer behavior.
324
What is wealth?
The total value of all assets owned by a person, firm, community, or country
## Footnote
Wealth can include cash, property, investments, and other assets.
325
What is a weighted price index?
An approach to calculating the change in the price level by giving a weight to each item according to its importance in the consumers’ budgets
## Footnote
This method provides a more accurate representation of price changes affecting consumers.
326
What is welfare loss?
A loss of economic efficiency that can occur when equilibrium for a good or service is not allocatively efficient
## Footnote
Welfare loss indicates that resources are not being used in the best possible way.
327
What is the World Bank?
An organization whose main aims are to provide aid and advice to economically least developed countries, as well as reducing poverty levels and encouraging and safeguarding international investment
## Footnote
The World Bank plays a crucial role in global economic development.
328
What is the World Trade Organization (WTO)?
An international body that sets the rules for global trading and resolves disputes between its member countries
## Footnote
The WTO also hosts negotiations concerning the reduction of trade barriers between its member nations.
