IB Economics HL 2023

IB Economics HL 2023 Ceteris paribus - ANS-all other things are being held equal positive economics - ANS-matters of economics that can be proven to be right or wrong by looking at the facts normative economics - ANS-matters of economics that are based upon opinion and so are incapable of being proven to be right or wrong scarcity - ANS-the limited availability of economic resources relative to societys unlimited demand for goods and services land - ANS-the physical factor of production. It consists of natural resources labour - ANS-the human factor of production. It is the physical and mental contribution of the existing work force to production capital - ANS-the factor of production that is made by humans and is used to produce goods and services. It occurs as a result of investment entrepreneurship - ANS-the factor of production involving organizing and risk-taking opportunity cost - ANS-is the next best alternative foregone when an economic decision is made free good - ANS-goods or services which are unlimited in supply and have no opportunity cost. the have unlimited supply at market price zero economic good - ANS-a good or services which is relatively scarce and so have a price. An opportunity cost is involved if it is consumed. utility - ANS-the satisfaction or pleasure that an individual derives from the consumption of a good or service production possibility curve - ANS-shows the maximum combination of outputs that can be production by an economy in a given time period actual output - ANS-the actual production of goods and services in an economy over a given time period actual growth - ANS-occurs when previously unemployed factors are put into production. It is represented by an movement from a point within a PPC to a new point nearer to the PPC Potential output - ANS-the possible production that would be possible in an economy if all available factors were being employed. Potential growth - ANS-occurs when the quantity/quality of factors of production within an economy is increased. It is presented with an outward shift of the PPC. Economic growth - ANS-the growth of real output in an economy over time. Usually measured in real GDP economic development - ANS-a broad concept which involves improvement in standard of living, reducing in poverty, improved health and education. sustainable development - ANS-development that meets the needs of the present without compromising the ability of future generations to meet their own needs free market economy - ANS-an economy where the means of production are privetly held by individuals and firms. Demand and supply determine how much to produce, how/how many to produce, an for whom to produce. planned economy - ANS-an economy where the means of production are owned by the state. The state determines how much to produce how much to produce, how/how many to produce, and for whom to produce. Transition economy - ANS-an economy in the process of moving from a centrally planned economic system towards a more market-oriented economic system. demand - ANS-the willingness and ability to purchase a quantity of a good or service at a certain price over a given time period law of demand - ANS-as a price of a good falls, quantity demanded increases velben goods - ANS-goods that are the exceptions to the law of demand, where at high prices, as price increases, then so does the demand giffen goods - ANS-goods that are exceptions to the law of demand where at very low prices, with consumers on low incomes and dependent upon the good for survival, as price rises, then so does demand supply - ANS-the willigness and ability of a producer to produce a good or service at a given price law of supply - ANS-as the price of a good rises the quantity supplied rises maximum price - ANS-a price imposed by the authority and set below the market price minimum price - ANS-a price imposed by the authority and set above the market price Continues...