Introduction to Economics Notes __ Yr 11 Eco

Economy

A collection of consumers, businesses and the government that collaborates to produce, trade and consume goods and services.

Goods

Tangible items that you can touch.

Services

Intangible items, such as getting financial advice or having an event planned.

Opportunity Cost

The value of the next best alternative forgone when a choice is made.

Production Possibility Frontier (PPF)

A graph that shows the possible combinations of production based on available resources.

Injections

Additions of money into the economy, which can increase economic activity.

Leakages

Withdrawals of money from the economy, which can decrease economic activity.

Factors of Production

Resources or inputs used to make goods and services, including land, labor, capital, and entrepreneurship.

Capital Goods

Goods used to produce other goods.

Consumer Goods

Goods that are used for immediate consumption.

Market Economy

An economic system where production and pricing are driven by supply and demand.

Mixed Economy

An economic system combining private and public enterprise.

Gini Coefficient

A measure of income inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality).

Human Development Index (HDI)

A composite measure of a country's average achievements in health, education, and income.

Circular Flow of Income Model

A model that shows how money flows through the economy among consumers, businesses, and the government.

Economic Growth

An increase in the production of goods and services in an economy.

Market Failures

Situations where the allocation of goods and services by a free market is not efficient.

Business Cycle

The natural rise and fall of economic growth that occurs over time.

Unemployment Rate

A measure of the prevalence of unemployment in an economy.

Collective Wants

Goods and services that people want in groups or that many people use, such as roads or parks.

Individual Wants

Goods and services that people buy for themselves.

Resources

Inputs used in the production of goods and services, including land, labor, capital, and entrepreneurship.

Efficiency

The optimal use of resources to produce goods and services.