Economics for CSEC Examinations - Basic Concepts and Market Forces

Comprehensive vocabulary flashcards covering the fundamental principles of economics for CSEC, including microeconomic concepts, market structures, macroeconomic goals, and Caribbean economic systems, and international trade.

Economics

The social science that studies how individuals and societies allocate scarce resources with alternative uses to achieve given ends or goals.

Scarcity

The basic economic problem where man's unlimited wants exceed his limited economic resources.

Choice

The range of options available to an economic agent when making a decision, necessitated by the presence of scarcity.

Opportunity Cost

The next best alternative forgone when a choice is made.

Factors of Production

Economic resources used to produce goods and services: Land (rent), Labour (wages), Capital (interest), and Entrepreneurship (profit).

Production Possibility Frontier (PPF)

A curve showing the maximum combinations of two goods an economy can produce with fixed resources and technology.

Traditional Economy

An economic system based on customs, habits, and self-sufficiency, often using direct production and barter.

Command Economy

A planned economic system where the state owns the factors of production and makes all allocation decisions.

Free Market Economy

An economic system where private individuals own and allocate resources based on the price mechanism and profit motive.

Mixed Economy

An economic system combining elements of both free market and command economies, with both private and public sectors.

Division of Labour

Splitting the production process into separate tasks where workers specialise in specific parts of the process to increase productivity.

Economies of Scale

Cost advantages and falling long-run average costs that accrue to a firm as it increases its scale of production.

Effective Demand

The desire for a product backed by the willingness and ability to pay for it.

Equilibrium

The state of balance in a market where the quantity demanded equals the quantity supplied ($Qd = Qs$).

Market Failure

The inability of the market mechanism to allocate resources efficiently to maximise social welfare, often caused by externalities or public goods.

Price Elasticity of Demand (PED)

A measure of the responsiveness of quantity demanded to a change in the price of the good. Formula: $\frac{\% ext{ change in } Qd}{\% ext{ change in price}}$

Ceteris Paribus

A Latin phrase meaning 'other things remaining constant,' used by economists to isolate the effect of one variable.

Disposable Income

The total personal income minus direct taxes; the amount available to households for spending and saving.

Gross Domestic Product (GDP)

The total money value of all final goods and services produced within a country's borders in a given year.

Inflation

A steady and continuous rise in the general price level of an economy, often measured by the Retail Price Index (RPI).

Recession

A period of declining national output lasting for several months, typically resulting in rising unemployment.

Trade Union

An association of workers formed to protect and promote the interests of its members regarding pay and working conditions.

Globalisation

The emergence of a single world market characterized by the free movement of goods, people, capital, and ideas across borders.

CARICOM Single Market and Economy (CSME)

An initiative to integrate the economies of Caribbean nations into a single economic system with free movement of factors and goods.