Prosperity, Inequality and Planetary Limits

A set of flashcards covering key terms and definitions from the lecture on prosperity, inequality, and planetary limits.

GDP

Market value of all goods and services produced in a country in a given period; also a measure of total income earned within the country.

GDP per capita

GDP ÷ population. Used as a proxy for average living standards or average income per person.

Growth rate

Change in GDP divided by the original level of GDP, usually shown as a percentage.

Technology

A process that uses inputs to create output.

Production function

Shows how inputs are translated into output.

Average product of labour (APL)

Total output ÷ number of workers.

Subsistence income

The income level at which population remains constant over time.

Malthusian trap

A situation where productivity gains raise population, which then pushes income per person back down toward subsistence.

Capitalism

An economic system characterised by private property, firms, and markets.

Structural transformation

The long-run movement of labour away from agriculture into non-agricultural activities.

Biosphere

The natural environment within which the economy operates; it provides resources and absorbs waste only up to limits.

Diminishing APL

In the agricultural model, it falls as more workers are placed on fixed land.

Malthusian model

Population rises when income is above subsistence and falls when income is below subsistence.

Inequality

The unequal distribution of income or wealth across individuals or groups.

Hockey-stick growth

A metaphor illustrating that average living standards remained flat for long periods and then sharply increased.

Capitalism explanation

Competition between firms, specialization, and technological progress interact rather than operating in isolation.

Economics

The study of how people interact with each other and with the natural environment when producing and acquiring their livelihoods.

Production inputs

Factors like labor, land, and capital used to produce goods.

Internal distribution

How income is shared among various individuals and groups within a country.

Catch-up growth

The phenomenon where countries with lower incomes grow at faster rates than richer ones.

Environmental degradation

The deterioration of the environment through depletion of resources and destruction of ecosystems.

Technological progress

The continuous improvement of methods and tools used to increase production efficiency.

Income inequality

The extent to which income is distributed unevenly among a population.

Historical causation

Understanding the connections between historical events and economic outcomes.

Economic power

The ability to influence the economic actions of others, typically concentrated in firms and owners.

Private property

Legal designation of ownership of property, essential in capitalist economies.

Labor force

The total number of people employed or seeking employment in an economy.

Social welfare

The overall well-being of individuals and society as a whole.

Institutions

Established laws, practices, and organizations that shape economic behavior.

Permanent technological revolution

The ongoing and continuous innovation that drives improvements in productivity.

Subsidy

A form of financial aid or support extended by the government to economic sectors.

Biodiversity

The variety of life in the world or in a particular habitat or ecosystem.

Global income inequality

Differences in income levels across countries and regions worldwide.

Inequality measures

Statistical tools used to assess the distribution of income or wealth.