The Basic Core of Economics Flashcards
Economics Mantra
People make choices with scarce resources, and they interact with other people when they make these choices
Opportunity Cost
the value of the next-best alternative that was not chosen because something else was chosen
Gains from trade
improvements in income, production or satisfaction owing to the exchange of goods and services
Specialisation
concentration of production effort on a single specific task
Division of Labour
the division of production into various parts in which different groups of workers specialise
Comparative Advantage
a situation in which a person or group can produce one good at a lower opportunity cost than another person or group
Production Possibilities curve (frontier)
a graph which illustrates the trade-offs that an economy faces when deciding what to produce
Normative economics
making recommendations
Positive economics
economic analysis of the event
Partisan
A strong support of a party, cause or person
Gini coefficent
A method of measuring inequality (1 = all income goes to one individual, 0 = income equally shared)
Kuznets Curve
Inequality rises in the early stages of industrialisation as people leave the land and become more productive in factories. Once industrialisation is complete and better-educated citizens demand redistribution from the government it declines again.
Cronyism
(nepotism) appointment of friends and family to positions of authority without considering their qualifications
Plutocracy
only the wealthy are allowed to rule
Egalitarian
believing that all people are equal and deserve equal rights and opportunities
