HL economics terms

positive economic profit, arising when total revenue is greater than total economic costs

the ability of a country to produce a good using fewer resources than another country

the inability of an individual or a family to afford a basic standard of goods and services, where this standard is absolute and unchanging over time.

the quantity of output actually produced by an economy.

taxes calculated as a fixed percentage of the price of the good or service

trade protection measures taking the form of administrative procedures that countries may use to prevent the free flow of imports into a country

the total quantity of goods and services that all buyers in an economy including consumers, firms, the government and foreigners want to buy over a particular time period, at different possible price levels, ceteris paribus

the curve that shows the relationship between total quantity of goods and services that all buyers in an economy want to buy over a particular time period (x axis) against the price level (y axis)

the total quantity of goods and services produce in an economy over a particular time period, at different price levels, ceteris paribus

P = MC

an argument that justifies trade protection policies: if a country's trading partner is suspected of practising dumping, then the country should have the right to impose trade protection measures to limit quantities of the dumped good

an increase in the value of a currency in the context of a floating exchange rate system

technologies that are well-suited to a country's particular economic, geographical, ecological and climate conditions.

a type of market failure where buyers and sellers do not have equal access to information, usually resulting in an underallocation of resources to the production of goods and services, as parties to a transaction with less access to information try to protect themselves against the consequences of the information asymmetry

factors that automatically, without any action by government authorities, work toward stabilising the economy by reducing the short term fluctuations of the business cycle.

costs per unit of output

fixed cost per unit of output

the total quantity of output of a firm per unit of variable input

revenue per unit of output sold

tax paid/total income x100%

total cost per unit of output

variable cost per unit of output

a record of all transactions between the residents of a country and the residents of all other countries, showing all payments received from other countries (credits) and all payments made to other countries (debits). Sum of all credits must equal to sum of all debits in the course of a year

part of the balance of payments, the value of exports of goods minus the value of imports of goods over a specific period of time (usually a year)

part of the balance of payments, the value of exports of services minus the value of imports of services over a specific period of time (usually a year)

the sum of inflows minus outflows of funds in the capital account of the balance of payments

the sum of inflows minus outflows of funds in the current account of the balance of payments

the sum of inflows of funds minus outflows in the financial account of the balance of payments

referring usually to the government's budget, it is the situation where government tax revenues are equal to government expenditures over a specific period of time (usually a year)

anything that can prevent a firm from entering an industry and beginning production, as a result limiting the degree of competition in the industry

any trade agreement involving two trading partners, usually two countries

the point of production of a firm where its total revenue is exactly equal to its total costs (economic costs) and it is therefore earning normal profit, no economic profit.

a price at which the firm breaks even, meaning that its total revenues are just equal to its total costs (economic costs)

referring usually to the government's budget, it is the situation where government tax revenues are less than government expenditures over a specific period of time (usually a year)

referring usually to the government's budget, it is the situation where government tax revenues are greater than government expenditures over a specific period of time (usually a year)

a measure of the degree of optimism among firms in an economy about the future performance of firms and the economy; it is measured on the basis of surveys of business managers

fluctuations in the grown of real output or real GDP consisting of alternating periods of expansion/contraction

a scheme in which a government authority sets a limit on the amount of pollutants that can be legally emitted by a firm, set by an amount of pollution permits (tradable permits) distributed to firms

one of the factors of production, which itself has been produced; also known as physical capital, including machinery, tools, equipment, buildings

in the balance of payments, refers to the inflows minus outflows of funds for capital transfers, the purchase or use of non-produced natural resources

with reference to government expenditures, these include public investments, or the production of physical capital (roads, airports, schools, hospitals)

free movement of financial capital in and out of a country, occurring through the elimination by the government of exchange controls

a part of the capital account of the balance of payments, including inflows minus outflows for debt forgiveness, non-life insurance claims and investments

a tax per unit of carbon emissions of fossil fuels, considered by many countries as a policy to deal with the problem of climate change

a formal agreement between firms in an industry to undertake coordinated actions to limit competition

a financial institution that is responsible for regulating the country's financial system and commercial banks and carrying out monetary policy

"other things being equal"

a model showing the flow of resources from consumers (households) to firms, and the flow of products from firms to consumers, as well as money flows consisting of consumer income arising from the sale of their resources and firms revenues arising from the sale of their products

technology that is not polluting, associated with environmental sustainability

an economy that has no international trade

an agreement among firms to fix prices, or divide the market between them, to limit competition and maximize profit

the type of oligopoly where firms agree to restrict output or fix prices, in order to limit competition, increase monopoly power and profits

a financial institution whose main functions are to hold deposits for their customers, make loans for their customers, to transfer funds by cheque from one bank to another and to buy government bonds

resources that are not owned by anyone, do not have a price, and are available for anyone to use without payment

a type of trading bloc in which countries that have formed a customs union proceed further to eliminate any remaining tariffs in trade between them

arises when a country has a lower relative cost, or opportunity cost, in the production of a good than another country

a market composed of many buyers and sellers acting independently, with no influence on the price of the product

in the case of two goods, refers to production of one or the other by a firm; in other words the two goods compete with each other for the same resources

occurs when there are many buyers and sellers acting independently, so that no one has the ability to influence the price at which the product is sold in the market

two or more goods that tend to be used together

a summary measure of more than one indicator, often used to measure economic development

a measure of how much an industry's production is concentrated among the industry's largest firms

loans that are offered as part of foreign aid, made on concessional terms

development assistance provided by bilateral or multilateral development organisations, which is extended to countries on condition that they satisfy certain requirements, usually requiring that they adopt particular policies

the situation where the output of a firm changes in the same proportion as all its inputs

a measure of the degree of optimism of the consumers about their future income and the future of the economy; measured on the basis of surveys consumers

a measure of the cost of living for the typical household, comparing the value of a basket of goods and services in one year with the value of the same basket in a base year

the difference between the highest prices consumers are willing to pay for a good and the price actually paid

spending by households on goods and services

fiscal policy usually pursued in an inflation, involving a decrease in government spending or an increase in taxes

monetary policy usually pursued in an inflation, involving an increase in interest rates, intended to lower investment and consumption spending

a rate of inflation based on a consumer price index that excludes goods with highly volatile prices

the degree to which corporations have debs

the practice of some corporations to avoid socially undesirable activitie as well as undertaking socially desirable activities

a type of inflation caused by a fall in aggregate supply, in turn resulting from increases in costs of production

the total opportunity costs for firms in order to acquire resources for use in production

in the balance of payments, payments received from other countries, entering the balance of payments accounts with a plus sign

a measure of the responsiveness of the demand for one good to a change in the price of another good

goods are substitutes

goods are complements

the possible impacts on real GDP of increased government spending financed by borrowing