Core microeconomics and macroeconomics concepts from the IB Economics syllabus. Front: the term or concept. Back: a plain-language definition.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is opportunity cost?
- The value of the next best alternative foregone when making an economic choice.
- Define supply.
- The quantity of goods or services producers are willing and able to offer at different price levels.
- Define demand.
- The quantity of goods or services consumers are willing and able to buy at different price levels.
- What is price elasticity of demand (PED)?
- The responsiveness of quantity demanded to a change in price, measured as percentage change in quantity demanded divided by percentage change in price.
- What is price elasticity of supply (PES)?
- The responsiveness of quantity supplied to a change in price, measured as percentage change in quantity supplied divided by percentage change in price.
- Define consumer surplus.
- The difference between the price consumers are willing to pay for a good and the price they actually pay.
- Define producer surplus.
- The difference between the price producers actually receive for a good and the minimum price at which they are willing to supply it.
- What is the price mechanism?
- The system of prices and price signals that coordinate decisions of consumers and producers in a market economy.
- Define perfect competition.
- A market structure with many firms selling identical products, free entry and exit, perfect information, and price-taking firms.
- Define monopoly.
- A market structure with one seller of a product with no close substitutes, significant barriers to entry, and market power.
- What is monopolistic competition?
- A market structure with many firms selling differentiated products, some market power, and relatively free entry and exit.
- Define oligopoly.
- A market structure with a few large firms dominating the market, significant barriers to entry, and interdependent pricing decisions.
- What is an externality?
- A cost or benefit generated by an economic activity that affects third parties not directly involved in the transaction.
- Define market failure.
- A situation where the free market fails to allocate resources efficiently, resulting in an inefficient outcome.
- What is a public good?
- A good that is non-excludable and non-rivalrous, meaning consumers cannot be excluded from its use and one person's consumption does not reduce availability for others.