ECO 11 TERM 3

Unit 2 topic 2 QCE Economics

income

income

payments to households in the form of wages, rent, interest and profit

income distribution

allocation of returns from four factors of production, among the population of the country

income inequality

the degree to which income is unevenly distributed among people in the economy.

interest

the price paid for the use of capital

profit

A financial gain, esp. the difference between the amount earned and the amount spent in buying, operating, or producing something

rent

payments in return for the use of land or other natural resources used in the production process

wealth

total assets owned by an individual or income unit, and the nation at any time, includes physical assets such as real estate and consumer durables.

equivalence scales

include income levels needed by different types of family units to attain the same, or equivalent , standard of living

Gini coefficient

a numerical measure of the degree of inequality involved in any income distribution of a country, based on the areas under the Lorenz curve

Henderson poverty line

the minimum desirable level of household income, revised to accommodate changing economic conditions

Lorenz curve

a graphical representation of the inequality of a nation's distribution

poverty

the situation of people whose resources are so limited as to exclude them from the minimum acceptable way of life in the country in which they live.

poverty line

a level of income giving a minimal standard of living for a particular group of people in a society

mobility of labour

ease with which the labour force can be transferred from one occupation to another or from one geographic region to another

primary labour market

part of the labour market that has little likelihood of unemployment, defined career paths, high and rising wages, and skilled and well educated workers

relative poverty

the situation of people whose income and lifestyle have fallen below, by more than a certain degree, the average income and lifestyle enjoyed by the rest of society

secondary labour market

part of the labour market that has frequent unemployment, casual employment, low and declining real wages, no career path and unskilled workers with minimal education qualifications

underemployment

when workers in a labour force are employed at less than full

unemployment

the state of being out of work or not having paid employment

absolute poverty

the situation of people whose deprivation is extreme because they do not have access to the basic necessities of food, clothing and shelter

Egalitarian society

a society that believes in treating people equally through giving people equal rights and opportunities

merit good

a good or service that is not produced in sufficient quantities by markets because individuals do not value them highly enough to pay for them a private good with positive externalities

progressive taxation system

tax system in which the percentage of tax payable increases as income rises

redistribution of income and wealth

transfer of money and assets from one group in the economy to another

taxation

a method of financing government activities, which involves compulsory payments to the government by individuals, companies or other organisations, usually based on income earned nd goods

wages

payments to employees as a return for the provision of labour or human effort to the production process (usually calculated on the basis of actual production or hours worked)