Economics Lecture Notes

A set of vocabulary flashcards based on economics lecture notes covering foundational concepts.

Economics

The study of how scarce resources are allocated to satisfy unlimited wants.

Scarcity

The imbalance between unlimited wants and finite resources.

Factors of Production

Land, labour, capital, and enterprise.

Opportunity Cost

The cost of the next best alternative foregone.

Market Equilibrium

The price at which quantity demanded equals quantity supplied.

Consumer Surplus

The difference between willingness to pay and the price paid.

Producer Surplus

The difference between price received and minimum supply price.

Allocative Efficiency

Producing the mix of goods most desired by consumers.

Positive Economics

Economics based on objective analysis and facts.

Normative Economics

Economics based on value judgements and opinions.

Ceteris Paribus

Holding all other factors constant.

Marginal Analysis

Comparing marginal costs with marginal benefits.

Excess Demand

Quantity demanded exceeds quantity supplied.

Excess Supply

Quantity supplied exceeds quantity demanded.

Externalities

Costs or benefits affecting third parties.

Public Goods

Goods that are non-rival and non-excludable.

Merit Goods

Goods that are under-consumed due to positive externalities.

Demerit Goods

Goods that are over-consumed due to negative externalities.

Market Failure

When the free market fails to allocate resources efficiently.

Government Intervention

Actions taken by the state to influence market outcomes.

Fiscal Policy

Government use of spending and taxation to influence the economy.

Monetary Policy

Control of the money supply and interest rates to influence the economy.

Globalization

Increasing economic integration of countries through trade, finance, and migration.

Trade Liberalization

Reducing barriers to trade.

Protectionism

Policies that restrict trade to protect domestic industries.

Trade Balance

The difference between the values of exports and imports.

Current Account

A record of trade and income flows between a country and the rest of the world.

Poverty

The inability to meet basic living standards.

Income Inequality

The unequal distribution of income among individuals or households.

Development

Improvements in living standards and welfare.