G11 ECONOMICS IB Y1 U1 KEY TERMS angela

Change

shift in econ conditions, policies, and variables

Choice

The act of selecting among alternatives and making decisions on resource allocation cuz of scarcity

Economic Wellbeing

refers to level of prosperity, econ satisfaction, and a high standard of living.

equity

the idea of being fair or just

Efficiency

best possible use of scarce resources, to avoid waste

Interdependence

decision makers interact or depend on each other

Intervention

government or authority take actions that involve with working of markets

Sustainability

long term maintenance or viability of any activity or policy

Scarcity

The problem of not having enough resources to satisfy unlimited wants and needs.

Factors of Production

The inputs used to produce goods and services: land, labor, capital, and entrepreneurship.

Rationing

The controlled distribution of scarce resources, g or s.

Price rationing

A market mechanism where the allocation of scarce resources is determined by price.

Non-price rationing

Distribution methods based on reasons other than price, such as queuing, lotteries, or government allocation.

Market economy

in market economy, resources are owned by priv individuals. prices set by supply and demand

Command economy

resources are owned by government, make decisions based on command

Mixed economy

An economic system combining elements of both market and command economies, where both the government and private sector play significant roles.

Production possibilities curve

A graph shows all combinations of the maximum amount of 2 goods a country can produce

Positive economics

one way of thinking that tries to describe, explain, and predict econ events by use of hypotheses, theories, and models

Normative economics

one way of thinking of how things should or ought to be. based of beliefs and value judgements

Laissez Faire

An economic theory advocates minimal government intervention in the market.

Utilitarianism

A theory that suggests that actions are right if they create most happiness on the largest number of people

Utility

satisfaction received by consuming something

Say’s Law

An economic theory that states "supply creates its own demand" .

Keynesian theory

A theory suggests that government intervention is necessary to stabilize economic.

Behavioural economics

A field of economics that examines how psychological and emotional factors affect economic decisions.

Monetarism

theory of importance of controlling the money supply to regulate inflation and stabilize the economy.

consumer rationality

consumers make decisions to maximize their utility or satisfaction.

Economic good

A good or service that is scarce and has an opportunity cost.

Free good

A good that does not have an opportunity cost, often available without a price (e.g., air or sunlight).

Opportunity cost

The value of the next best alternative that is given up to obtain something else

Resource allocation

the process of distributing limited resources among competing uses .

Resource reallocation

The process of redistributing resources from one use to another.

Distribution of income

The way in which total income is shared among the different individuals or groups in an economy.

Redistribution of income

The transfer of income and wealth from certain individuals to others.

Three basic economic questions

The fundamental questions of

what/how much to produce?

how to produce?

for whom to produce?

Ceteris paribus

A Latin phrase meaning "all other things being equal," used in economics to isolate the other variables and make them constant/unchanged to test our hypotheses

Theory

an explanation of a set of connected events based on accurate hypotheses

Law

a principle that explains the consistent behaviors of economic variables or relationships .

Model

A simplified representation of reality used to analyze economic behaviors, relationships, or outcomes.

Econometrics

using statistical and mathematical methods to analyze econ events

Hypothesis

an educated guess

Equity

idea of being fair or just

Value judgments

Opinions based on personal beliefs, values, or preferences, rather than objective facts.