economics mocks key terms

Participation Rate

The percentage of the working-age population actively engaged in the labour market, either employed or seeking work.

Data Centres

Facilities used to house computer systems and associated components, such as servers, to store, manage, and process data.

Monetary Policy

The regulation of money supply and interest rates by a central bank to control inflation, stabilise currency, and promote economic growth.

Fiscal Policy

Government policies on taxation and spending to influence economic activity.

Corporation Tax

A tax imposed on the profits of companies.

Marginal Utility

The additional satisfaction gained from consuming one more unit of a good or service.

Law of Demand

States that as the price of a good decreases, the quantity demanded increases, ceteris paribus.

Law of Supply

States that as the price of a good increases, the quantity supplied also increases, ceteris paribus.

Law of Diminishing Marginal Returns

When additional units of a factor of production are added, the incremental output eventually decreases.

Monopoly

A market structure with a single seller dominating the market with no close substitutes.

Oligopoly

A market structure dominated by a few large firms, often with significant market power.

Perfect Competition

A market structure with many buyers and sellers, identical products, and free entry and exit.

Imperfect/Monopolistic Competition

A market structure where many firms sell similar but differentiated products.

Marginal Revenue

The additional income generated from selling one more unit of a good or service.

Average Revenue

Total revenue divided by the quantity sold, equal to the price per unit in most cases.

Average Cost

Total cost divided by the quantity of output produced.

Long Run

A period during which all factors of production and costs are variable.

Short Run

A period during which at least one factor of production is fixed.

Price Discrimination

Charging different prices to different consumers for the same good or service based on willingness to pay.

Non-Price Competition

Strategies used by firms to attract customers without lowering prices, such as advertising or product differentiation.

Interdependent

When firms’ decisions are influenced by the actions of their competitors, typical in oligopolistic markets.

Industrial Action

Measures taken by employees, such as strikes, to enforce demands regarding working conditions or pay.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price.

Income Elasticity of Demand

A measure of how much the quantity demanded changes in response to a change in consumer income.

Comparative Advantage

The ability of a country to produce a good at a lower opportunity cost than another.

Absolute Advantage

The ability of a country to produce more of a good with the same resources than another.

Exports

Goods and services produced in one country and sold to another.

Imports

Goods and services bought by one country from another.

Foreign Direct Investment (FDI)

Investment by a company or individual in one country into business interests in another.

Urbanisation

The increase in the proportion of people living in urban areas compared to rural areas.

Balanced Regional Development

Ensuring economic growth is distributed fairly across all regions of a country.

Economy at Full Capacity

When all resources in an economy are fully utilised, and output is at its maximum potential.

Opportunity Cost

The value of the next best alternative foregone when making a choice.

Balance of Payments

A record of all economic transactions between residents of a country and the rest of the world.

Inflation

The rate at which the general level of prices for goods and services rises, eroding purchasing power.