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Economics IGCSE > Revision Guide - Economic Glossary > Flashcards

Revision Guide - Economic Glossary Flashcards

1
Q

Aggregate demand

A

total demand in an economy: consumption, investment, government expenditure, and exports minus imports

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2
Q

Anti-competitive or restrictive trade practices

A

attempts by firms to restrict or prevent competition

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3
Q

Average costs

A

the cost per unit of output; it is equal to total cost divided by the number of units of output

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4
Q

Balance of payments

A

record of all of the transactions resulting from international trade

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5
Q

Barriers to entry

A

obstacles that migh discourage a firm from entering a market

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6
Q

Capital intensive

A

where production relies more heavily on machinery relative to labour

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7
Q

Cartel

A

a group of firms or countries join together to agree on pricing or output levels in an industry;

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8
Q

collusion

A

is where informal agreeements between firms restrict competition

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9
Q

Complementary goods

A

goods purchased together because they are consumed together

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10
Q

Consumer price index

A

used in United Kingdom and the Eurozone, it is a measure of the general price level excluding housing costs

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11
Q

Demand deficient (cyclical) unemployment

A

unemployment caused by falling demand in the economic cycle

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12
Q

Demand

A

the amount of a good bought at given prices over a period of time; a Demand Curve is a line on a graph which shows how much of a good will be bought at different prices; Derived demand is the demand that arises because there is demand for another good

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13
Q

Depression or slump

A

the bottom of an economic cycle, when GDP falls with significant increases in unemployment; Recession a less severe form of depression

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14
Q

Diseconomies of scale

A

rising average costs when output rises

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15
Q

Division of labour

A

the breaking down of the production process into small parts with each worker allocated a part of the process

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16
Q

Dumping

A

where an overseas firm sells large quantities of a product below cost in the domestic market

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17
Q

Economic policy instruments

A

economic variables such as interest rates, taxation rates and government expenditure that governments can adjust in managing the economy

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18
Q

Economies of scale

A

falling average costs due to expansion

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19
Q

Effective demand

A

the amount of a good people can afford to buy, and would buy, at any given price over a period of time

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20
Q

Efficiency

A

minimising costs and the use of resources

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21
Q

Entrepreneur

A

an individual who organises the other factors of producion and risks their own money in a business venture

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22
Q

Equilibrium price

A

the price where supply and demand are equal

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23
Q

Excess demand

A

where demand is greater than supply and there are shortages in the market

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24
Q

Excess supply

A

where supply is greater than demand and there are unsold goods in the market

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25
Q

Exchange rate

A

the price of one currency in terms of the currency of another country; a devaluation is the fall in the value of a currency; an appreciation is when the exchange rate rises

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26
Q

Exports

A

are goods and services sold overseas; imports are goods and services bought from overseas

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27
Q

Externalities

A

the spillover effects of consumption or production; they affect others and may be positive or negative

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28
Q

Factors of production

A

the resources used to produce goods and services. They include land, labour, capital and enterprise

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29
Q

Fixed capital

A

the stock of ‘man-made’ resources such as machines and tools used to hlep make goods and services

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30
Q

Fixed costs

A

costs that do not vary with the level of output

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31
Q

Foreign direct investment

A

business investment undertaken by a firm in another country, such as building a factory

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32
Q

Frictional unemployment

A

workers are unemployed briefly while they move from one job to another

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33
Q

Gross Domestic Product (GDP)

A

is an internationally recognised measure of a country’s national income

34
Q

Human capital

A

the value of the workforce or of an individual worker

35
Q

Income elasticity of demand

A

the responsiveness of demand to a change in income

36
Q

Inferior good

A

a good for which demand will fall if income rises or will increase if income falls

37
Q

Inflation

A

is a general and persistent rise in prices; deflation is period where the level of aggregate demand is falling

38
Q

Inverse relationship between price and quantity demanded

A

where price rises quantity demanded falls; when price falls the quantity demanded rises

39
Q

Labour intensive

A

where production relies more heavily on labour relative to machinery

40
Q

labour

A

the people used in the production of goods and servies

41
Q

Macroeconomics

A

the study of the whole economy; microeconomics is the study of individual parts of an economy

42
Q

Market failure

A

where markets lead to inefficiency

43
Q

Market system or price mechanism

A

the automatic determination of prices and the allocation of resources through markets operating in the economy

44
Q

Market-clearing price

A

the price in a market where the amount supplied exactly equals the amount demanded

45
Q

Minimum wage

A

a minimum amount per hour which most workers are entitled to be paid

46
Q

Mixed economy

A

an economy where goods and services are provided by both the priblic and private sectors

47
Q

Monetarists

A

economists who believe that there is a srong link between growth in the money supply and inflation

48
Q

Monetary policy

A

the use of interest rates and the money supply to control aggregate demand in the economy

49
Q

Monopoly

A

a situaion where there is one seller in a market; a natural monopoly is where it is less costly in an industry for one firm, rather than many, to produce a good or servide and supply the whole market

50
Q

Multinationals

A

are companies that have significant production or service operations in at least two countries

51
Q

National income

A

the value of income, outputor expenditure over a period of time

52
Q

Normal good

A

a good for which demand will rise if income rises or fall if income falls

53
Q

Oligopoly

A

is a market dominated by a few large firms

54
Q

Opportunity cost

A

where choosing between different alternatives it is the benefit lost from the next best alternative

55
Q

Price elastic demand

A

a change in the price results in a more than proporionate change in demand

56
Q

Price elasticity of demand

A

the responsiveness of demand to a change in price

57
Q

Price elasticity of supply

A

the responsiveness of supply to a change in price

58
Q

Price inelastic demand

A

a change in the price results in a proportionately smaller change in demand

59
Q

Primary industry

A

production involving extraction of materials from the earth including mining, forestry, fishing and agriculture

60
Q

Primary sector

A

the provision of goods and services by business that are owned by individuals or groups of individuals

61
Q

Privatisation

A

the transfer of public sector resources to the private sector

62
Q

Product differentiation

A

an attempt by a firm to make its product distinct from that of its competitor

63
Q

Production

A

a process which involves converting resources ino goods and services; a Production possibility curve(PPC) is a line which shows the different combinations of two goods an economy can produce when all available resources are used

64
Q

Productivity

A

the amount of output per unit of input

65
Q

Profit maximisation

A

making the largest amount of profit possible in a period of time

66
Q

Public goods

A

goods that are not likely to be provided by the private sector

67
Q

Public sector

A

government organisations that provide goods and services in the economy

68
Q

Secondary industry

A

production involving the conversion of raw materials ino finished and semi-finished goods

69
Q

Social benefits and costs

A

the benefits and costs of an economic activity to sociey as well as to the individual or firm

70
Q

Specialistaion

A

the production of a limited range of goods by individuals, firms, regions or countries

71
Q

Structural unemployment

A

caused by changes in the structure of an economy such as a decline in an industry

72
Q

Subsidy

A

a grant given to producers, usually to encourage the production of a certain good

73
Q

Substitute goods

A

goods bought as an alternative to another good that performs the same function

74
Q

Supply

A

is the amount sellers are prepared to sell at given prices over a period of time; a supply curve is a line on a graph that shows how much of a good sellers are willing to supply at different prices

75
Q

Tariffs or customs duies

A

a tax on imports to make hem more expensive to sell

76
Q

Tertiary industry

A

production of services in the economy

77
Q

Total costs

A

fixed cost and variable cost added together

78
Q

Total revenue

A

the amount of money generated from the sale of goods that is calculated by multiplying price by quantity

79
Q

Trading bloc

A

a group of counries situated in the same region that join together and enjoy trade free from tariffs, quotas and other trade barriers

80
Q

Variable costs

A

costs that rise or fall as output levels are increased or decreased, respectively

81
Q

Voluntary unemployment

A

resulting from people choosing not to work

Economics IGCSE (10 decks)

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