PiXL Gateway: Progression – Economics Year 12-13 Economics 1 Contents: I. Economics Vocabulary II. The PiXL Unlock Template III. Summer Reading list IV. Links to TED Talks/Articles/Documentaries/Books/Journals V. Knowledge Organiser Template VI. Thinking Hard Revisit Template VII. A Model of the Thinking Hard Revisit document VIII. Cornell Notes Template IX. A Model of the Cornell Notes document 2 I. Economics Vocabulary ECONOMICS: Currently, within the Economics secton of the app, we have the following units: • Introducton to markets and market failure • The UK Economy • Business Behaviour and the Labour Market • A Global Perspectve Introducton to markets and market failure Keywords and Defnitons Word Defniton value Value judgements are subjectve statements of opinion, rather than factual ones. judgements ceteris paribus Ceteris paribus means ‘all other things remaining equal’. renewable Renewable resources are those which can be replaced by natural means as quickly as resources they are used. non-renewable Non-renewable resources are those which cannot be readily replaced as quickly as they resources are used up. Positve statements are statements which can be tested and rejected with reference to positve evidence. Normatve statements are subjectve statements which cannot be tested and rejected normatve with reference to evidence. Scarcity refers to a lack of something. It occurs in situatons where there is greater scarcity demand than supply. opportunity Opportunity cost is the cost of the next best alternatve foregone as a result of an cost economic decision. productve Productve potental is the maximum quantty of goods and services which can be potental produced by a set amount of resources. producton A producton possibility fronter is the maximum output combinatons for two goods, possibility assuming all resources are used efciently. fronter Productvity is the efciency with which capital and labour are combined in order to productvity create output. economic Economic growth is the long-term expansion of the productve potental of the economy, growth as measured by an increase in the value of real natonal output. capital goods Capital goods are products made to facilitate producton of consumer goods. consumer Consumer goods are products made to satsfy the needs and wants of end users. goods Specialisaton is concentratng productve eforts into a smaller number of tasks, actvites specialisaton or products. division of Division of labour is the breaking down of producton into smaller, discrete tasks. labour A free market is where level of output and price are dictated by forces of supply and free market demand. command A command economy is where a central agent makes economic decisions relatng to the economy organisaton of producton. 3 efciency Efciency is a state of resource usage where wastage is minimised. A curve, in economics, is a line representng the connecton between two or more points curve on a plane. functons Functons are the role of an agent in a process or relatonship between variables. Money is the medium of exchange which is commonly used for transactons and money purchases. Utlity, in economics, is the satsfacton or usefulness derived from consuming a partcular utlity good or service. Ratonality, in economics, is the assumpton that economic decisions will be taken to best ratonality satsfy wants and needs. marginal Marginal means a specifc change in a variable, ofen meaning ‘one more or fewer’. price Price is the amount of money needed to acquire a specifc volume of goods. optmal Optmal is the best result which can be obtained from any decision. market A market is a place where buyers and sellers interact to exchange goods and services. Demand is the amount consumers are willing and able to consume at any given price demand level. supply Supply is the amount producers are willing and able to provide at any given price level. consumers Consumers are people or organisatons which use economic services or commodites. producers Producers are partes which create or supply economic goods or services. ratoning Ratoning is a way of controlling the consumpton of scarce resources. incentve An incentve is a factors which motvates someone to behave in a certain way. signal A signal is a method of sending some informaton from one party to another. complementary Complementary goods are two goods which are bought or consumed together. substtute Substtute goods are two goods which are bought or consumed instead of one another. Elastcity, in economics, is the responsiveness of one factor to a change in price of a good elastcity or income. inferior goods Inferior goods are products which experience lower demand as consumers’ incomes rise. tax Tax is a compulsory contributon charged by the government. A subsidy is a payment made by government to encourage consumpton or producton of subsidy a specifc good or service. Surplus is a situaton where there is a greater amount of assets than the current surplus requirement for them. Externalites are the efects on a third party of transactons in which they are neither externalites producer nor consumer. welfare Welfare is the level of prosperity and quality of living standards. 4 An interventon, in economics, is an acton taken by a government or insttuton to impact interventon the economy in a certain way. Public goods are those goods usually under-provided in a free market because their non- public goods rivalrous and non-excludable nature means there is no direct incentve to pay. unintended Unintended consequences are outcomes which are not the ones foreseen and desired by consequences partes taking a course of acton. regulaton A regulaton is a government placing rules (and sanctons) on individuals and frms. permit A permit, in economics, is a right to buy or sell a specifc good or service. asymmetric Asymmetric informaton is a situaton where one party in a transacton has greater informaton knowledge than the other. The UK Economy Keywords and Defnitons Word Defniton macroeconomic Macroeconomic refers to the behaviour of the economy on a (inter)natonal scale. gross domestc Gross domestc product (GDP) is the value of all goods and services produced within a product (GDP) country over a period of tme. gross natonal Gross natonal income (GNI) refers to the incomes which fow to the owners of a income (GNI) country’s factors of producton (wherever those factors are located). The trade cycle shows fuctuatons in economic actvity over a period of tme (as trade cycle measured against antcipated or ‘trend’ rates of growth to highlight recession/boom etc). output gap An output gap is the diference between the actual and potental output of any economy. recession A recession is a sustained decline in economic actvity. Infaton, in economics, is a sustained increase in average price levels over a period of infaton tme. real In economics, the word real is the nominal (or actual) value adjusted for infaton. nominal Nominal is the value which has not been adjusted for infaton. disinfaton Disinfaton is a decrease in the rate of infaton. defaton Defaton, in economics, is a sustained fall in the general price level. consumer price The consumer price index (CPI) is a weighted average of the price of a representatve index (CPI) basket of consumer goods and services. retail price The retail price index (RPI) is a measure of infaton which, unlike CPI, includes housing index (RPI) and mortgage interest costs. In economics, unemployment is the measure of the number of people who are willing unemployment and able to work but cannot fnd a job. Living standards are a measure of the wealth, comfort, material goods and necessites living standards available to a populaton. natonal Natonal happiness is a wider measure of well-being than the traditonal measures of happiness income and wealth. 5 current account The current account of the balance of payments measures the infows and outlows of of balance of goods, services, investment incomes and transfer payments of a naton. payments exports Exports are goods produced in one country and sold to another foreign naton. imports Imports are goods which are purchased from another country. circular fow of The circular fow of income is a model showing the way money fows in exchange for income labour and goods between frms and households. An injecton, in economics, is an additon to the circular fow of income through injecton government spending, investment or exports. A withdrawal is a leakage from the circular fow of income as it is reduced via imports, withdrawal taxes and savings. Savings are the amount lef over from income, once a consumer has satsfed their savings spending in a period. The multplier efect is the concept that an injecton into an economy will create an multplier efect overall impact, larger than the size of the original injecton. propensity Propensity means a tendency or inclinaton to behave in a certain way. aggregate Aggregate demand (AD) is a measure of the total amount spent by all agents within an demand (AD) economy. consumpton Consumpton, in economics, is the purchase of goods and services for use by households. Investment, in economics, refers to frms spending money on goods which are not investment consumed but are retained to enable future producton. A consumer, in economics, is a person or frm which uses goods and services in an consumer economy. aggregate Aggregate supply (AS) is the total amount of goods and services that frms within an supply (AS) economy are willing and able to supply at any given price level. equilibrium Equilibrium is the state in which diferent forces are held in balance. Spare capacity is the level of unused resources within an economy whereby it operates spare capacity below its productve potental. demographic Demographic refers to factors relatng to a populaton such as age, race, gender etc. productvity Productvity is a measure of the rate at which inputs are turned into outputs.