Economics Week 1

Ch 1.1-1.6

GDP Per Capita

Total goods and services produced in a country, divided by the country’s population.

GDP

How we value our government’s goods and services.The total income earned within a country.

Disposable Income

Income available after paying taxes and receiving payments from the government. How much money a person has left to spend without going into debt.

Income inequality

Where the rich have significantly more than the poor.

Growth Rate

Change in GDP divided by original GDP.

The Industrial Revolution

The biggest leap in technological progress in modern history.

Technology

Process that uses a set of inputs to produce an output.

Technological Process

Fewer inputs needed for the same/more outputs.

Environmental effect of our economy

The world is getting increasingly warmer, overall a negative effect on our environment.

Capitalism

Class of economic systems that combine three different institutions.

What is the economy within?

Society, the biosphere and our physical environment.

Economic system

A way of organizing the economy that is distinctive in its various institutions.

Institution

The “rules of the game”

Private Property

People owning things

Markets

Where things are bought, sold, and exchanged, also brings people together.

Capital goods

Costly and non-labour inputs used in production (ie. buildings, machinery)

Firm

Entity that transforms inputs into goods and services for sale.

Labour Market

In this market, wages are offered to employees who then work for employers.

Demand side

The side of a market that is offering money for a good or service.

Supply side

The side of a market that is offering a good or service in exchange for money.