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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
**Exchange rate**
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
26
**Exports**
are goods and services sold overseas; **imports** are goods and services bought from overseas
27
**Externalities**
the **spillover effects of consumption or production**; they affect others and may be positive or negative
28
**Factors of production**
the resources used to produce goods and services. They include land, labour, capital and enterprise
29
**Fixed capital**
the stock of **'man-made' resources** such as **machines and tools used to hlep make goods and services**
30
**Fixed costs**
costs that do not vary with the **level of output**
31
**Foreign direct investment**
business investment undertaken by a firm in another country, such as building a factory
32
**Frictional unemployment**
workers are unemployed briefly while they move from one job to another
33
**Gross Domestic Product (****GDP)**
is an internationally recognised measure of a country's national income
34
**Human capital**
the value of the workforce or of an individual worker
35
**Income elasticity of demand**
the **responsiveness of demand to a change in income**
36
**Inferior good**
a good for which **demand will fall if income rises** or will increase if income falls
37
**Inflation**
is a general and persistent rise in prices; **deflation** is period where the level of aggregate demand is falling
38
**Inverse relationship between price and quantity demanded**
where **price rises quantity demanded falls**; when price falls the quantity demanded rises
39
**Labour intensive**
where **production relies more heavily on labour r**elative to machinery
40
**labour**
the people used in the production of goods and servies
41
**Macroeconomics**
the study of the whole economy; **microeconomics** is the study of individual parts of an economy
42
**Market failure**
where markets lead to inefficiency
43
**Market system or price mechanism**
the automatic determination of prices and the allocation of resources through markets operating in the economy
44
**Market-clearing price**
**the price in a market** where the **amount supplied exactly equals the amount demanded**
45
**Minimum wage**
**a minimum amount per hour** which most workers are entitled to be paid
46
**Mixed economy**
an economy where goods and services are provided by both the priblic and private sectors
47
**Monetarists**
economists who believe that there is a srong link between growth in the money supply and inflation
48
**Monetary policy**
the use of **interest rates and the money supply to control aggregate demand** in the economy
49
**Monopoly**
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
**Multinationals**
are companies that have significant production or service operations in at least two countries
51
**National income**
the value of income, outputor expenditure over a period of time
52
**Normal good**
a good for which demand will rise if income rises or fall if income falls
53
**Oligopoly**
is a market dominated by a few large firms
54
**Opportunity cost**
where choosing between different alternatives it is the benefit lost from the next best alternative
55
**Price elastic demand**
**a change in the price** results in a more than **proporionate change in demand**
56
**Price elasticity of demand**
the responsiveness of demand to a change in price
57
**Price elasticity of supply**
**the responsiveness of supply** to a change in **price**
58
**Price inelastic demand**
**a change in the price** results in a proportionately **smaller change in demand**
59
**Primary industry**
**production involving extraction of materials from the earth** including mining, forestry, fishing and agriculture
60
**Primary sector**
the provision of goods and services by business that are owned by individuals or groups of individuals
61
**Privatisation**
**the transfer of public sector resources** to the private sector
62
**Product differentiation**
an attempt by a firm to **make its product distinct** from that of its **competitor**
63
**Production**
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
**Productivity**
**the amount of output per unit of input**
65
**Profit maximisation**
making the largest amount of profit possible in a period of time
66
**Public goods**
goods that are not likely to be provided by the private sector
67
**Public sector**
**government organisations** that **provide goods and services** in the economy
68
**Secondary industry**
production involving the **conversion of raw materials ino finished and semi-finished goods**
69
**Social benefits and costs**
**the benefits and costs of an economic activity to sociey** as well as **to the individual or firm**
70
**Specialistaion**
the production of a **limited range of goods** by individuals, firms, regions or countries
71
**Structural unemployment**
caused by changes in the structure of an economy such as a decline in an industry
72
**Subsidy**
a grant given to producers, usually to encourage the production of a certain good
73
**Substitute goods**
goods bought as an alternative to another good that performs the same function
74
**Supply**
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
**Tariffs or customs duies**
a tax on imports to make hem more expensive to sell
76
**Tertiary industry**
production of services in the economy
77
**Total costs**
fixed cost and variable cost added together
78
**Total revenue**
the amount of money generated from the sale of goods that is calculated by multiplying price by quantity
79
**Trading bloc**
**a group of counries** situated in the **same region** that join together and **enjoy trade free from tariffs, quotas and other trade barriers**
80
**Variable costs**
**costs that rise or fall as output levels are increased or decreased,** respectively
81
**Voluntary unemployment**
resulting from people choosing not to work

Economics IGCSE (10 decks)

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