IB Economics

When a firm's average revenue is greater than its average costs.

The ability to produce the same quantity of a good or service using fewer resources per unit of time.

The inability to afford the basic goods and services required to meet essential needs, when measured in relation to a fixed poverty line that indicates the minimum income required to cover basic necessities.

An increase in an economy's real output (real GDP) that uses up spare capacity, shown as a movement from a point inside the PPC toward the curve.

Bureaucratic rules and regulations imposed by governments to restrict imports and protect domestic industries.

When one of the sides has more knowledge about the quality of the product sold than the other.

The total quantity of real output that all buyers in an economy (consumers, businesses, the government, and foreigners) are willing to purchase over a specific time period, at all possible price levels, ceteris paribus.

The total output produced in an economy at all possible price levels, over a specific time period, ceteris paribus.

Allocative efficiency refers to the situation where the market produces the socially desirable quantity of output.

State of the economy in which the combination and quantity of goods and services produced is aligned with the preferences of consumers and producers, maximising social surplus.

Appreciation is the increase in the value of a currency.

Refers to situation where buyers and sellers don't have the same access to information.

Factors without government interaction which automatically reduce the short-term business cycle fluctuations.

The average total proportion of income paid as tax.

A statement or record of a country's economic transactions with the all other countries over a specific time period (often a year).

Occurs on an account when total debits exceed total credits, so the country pays out more on its international transactions than it receives.

Occurs on an account when total credits exceed total debits, so the country receives more from its international transactions than it pays out.

Obstacles such as legal protection, control of an essential resource, or large cost advantages that make it hard for new firms to enter a market, allowing existing firms to keep their market power.

A relatively recent field of economics founded on the notion that human behaviour is significantly more complex than the traditional assumptions of rational consumer choice.

Refers to a signed certificate, which represents a loan given by the bond holder to the borrower in exchange for regular interest payments and the promise to repay the full amount at a set future date.

Fluctuations in the growth of real output, characterised by alternating phases of expansion (rising real output) and contraction (falling real output).

Human-made factors of production used to produce goods and services.

The capital account is the sum of the balance of capital transfers and transactions in non-produced, non financial assets.

The large-scale and rapid movement of financial assets or capital from a country to foreign markets, often due to economic instability, political uncertainty, or fear of currency depreciation.