Economics: Concepts, Scarcity, Choice, and Historical Economic Events

Vocabulary practice flashcards covering fundamental economic concepts, choice, market laws, policy mechanisms, and historical economic events based on the lecture material.

Economics

A social science that studies how limited (finite) resources are allocated to satisfy unlimited (infinite) wants and needs.

Opportunity Cost

The best alternative foregone when a choice is made.

Scarcity

The gap between limited resources and unlimited wants.

Regulation

A law that must be followed, where violation results in a punishment (referred to as the 'stick' approach).

Incentive

Something that motivates an individual or firm to behave in a certain way (referred to as the 'carrot' approach).

Specialisation of Labour

The separation of a work process into a number of tasks, with each task carried out by a separate worker or group of workers.

Law of Demand

The economic principle stating an inverse (negative) relationship between price and quantity demanded, meaning as price rises, quantity demanded falls and vice versa.

Law of Supply

The economic principle stating a positive relationship between price and quantity supplied, meaning higher prices encourage suppliers to increase availability.

Market

A place where buyers and sellers come together, and where the interaction of demand and supply occurs to determine a price.

Cost–Benefit Analysis

An approach used by governments and firms to weigh up all costs (financial and external) and benefits of various options to make effective decisions.

External Costs

Negative side effects resulting from an economic project or decision that affect third parties, such as loss of wildlife habitats, noise, and air pollution.

External Benefits

Positive side effects resulting from an economic project or decision enjoyed by third parties or society, such as reduced traffic congestion and improved road safety.

Positive Economic Statements

Precise and fact-based economic statements that can be tested and proven with data.

Normative Economic Statements

Opinion-based economic statements reflecting individual value judgements that cannot be proven factually with data.

The Great Depression (1929–1938)

The most significant economic downturn of the 1900s in the Western World, triggered by the stock market crash on 24 October 1929.

John Maynard Keynes

The economist who established the principle that government money injections during a recession create employment, increase consumer spending, and grow the economy.

New Deal

A series of public works programmes implemented by US President Franklin D. Roosevelt to create employment and stimulate economic demand during the Great Depression.

Programme for Economic Expansion (1958)

A policy produced by the Irish Department of Finance, led by T.K. Whitaker, which opened Ireland's economy to international trade, expanded export markets, and increased Foreign Direct Investment (FDI).

Single Market

An economic territory (such as the EU) operating without internal borders or obstacles to the free movement of goods, services, capital, and people.

Customs Union

An agreement among a group of countries allowing free trade between member states while applying common external tariffs to non-member countries.

Celtic Tiger

The period of significant year-on-year economic growth in Ireland from the mid-1990s until 2007, driven by high FDI, strong exports, and a property boom.

Sub-prime Borrowers

High-risk borrowers provided with mortgages by US banks prior to 2008, whose subsequent defaults triggered the global financial crisis.

Irish Bailout Programme (2011)

An $\text{€}85\text{ billion}$ financial package entered by Ireland in January 2011 to recapitalise banks ($\text{€}35\text{ billion}$) and fund current budget deficits ($\text{€}50\text{ billion}$).

Troika

The combined team consisting of the International Monetary Fund (IMF), European Commission, and European Central Bank (ECB) that oversaw Ireland's bailout conditions.

Economic Shock

An unpredictable event that substantially impacts an economy, such as the lockdowns and travel restrictions caused by the Covid-19 pandemic.

Business Cycle

The recurring fluctuations in economic activity around a long-term growth trend over time, comprising four main phases: expansion, peak, contraction, and trough.