30 of the Economics glossary’s terms, each with the part of the syllabus where you first meet it.
Profit above normal profit, earned when total revenue exceeds total economic cost, or when average revenue is greater than average cost (AR > AC).
The ability of a country to produce more of a good than another country using the same quantity of resources, or the same output with fewer resources.
A situation in which income is below the level needed to meet basic needs for survival, such as food, clean water, shelter and clothing, measured against a fixed standard such as an international poverty line.
The principle that submitted work is the student's own, with every source acknowledged; plagiarism, collusion and undeclared use of tools such as AI are forms of misconduct.
The ability of a country's producers to sell goods and services abroad, which depends on transport costs, other countries' trade barriers, product standards, information and export infrastructure.
An increase in real output from using unemployed or inefficiently used resources, shown on a PPC as a movement from a point inside the curve towards the curve.
An indirect tax charged as a fixed percentage of the price of a good, so the tax per unit rises with the price and the supply curve pivots upwards.
Rules, standards, regulations and procedures, such as product, health and safety standards or customs paperwork, that make it harder or costlier to import goods.
The percentage of people aged 15 and over who can read and write a short, simple statement about their everyday life.
A form of asymmetric information arising before a transaction, in which the party with hidden information about quality or risk is the most willing to trade, so the other party attracts mainly bad risks or low-quality goods.
The total planned spending on an economy’s final goods and services at each possible average price level in a given period: consumption plus investment plus government spending plus net exports (C + I + G + (X − M)).
The total quantity of final goods and services that all firms in an economy plan to produce at each possible average price level in a given period.
A situation in which resources produce the mix and quantity of goods society values most; in a market it occurs where marginal benefit equals marginal cost and social surplus is maximised.
A bias in which people rely too heavily on the first piece of information they receive, such as an initial price, when making a judgment or decision.
Laws and regulators that promote competition by preventing firms from abusing market power, blocking mergers that reduce competition, and punishing price fixing and other collusion.
Using relevant economic theory to explain the events in an article and to trace their causes and consequences; criterion C rewards doing so effectively throughout a commentary.
A rise in the value of a currency in a floating exchange rate system, caused by market forces, so that one unit buys more of another currency.
Technology suited to local economic, social and environmental conditions, typically affordable, labour-intensive, easy to maintain with local skills and materials, and usable without complex energy or parts supplies.
The descriptors used to mark the portfolio: diagrams, terminology, application and analysis, key concept and evaluation for each commentary, plus rubric requirements for the whole portfolio.
The four groups of skills the IB assesses in Economics: knowledge and understanding (AO1), application and analysis (AO2), synthesis and evaluation (AO3), and the use of skills such as diagrams and calculations (AO4).
A situation in which one party to a transaction has more or better information than the other, leading to a misallocation of resources.
The situation in which a country does not trade with other countries and consumes only what it produces itself.
In the monetarist/new classical model, the process by which flexible wages and prices shift SRAS until the economy returns to the full employment level of output without government intervention.
Features of the tax and benefit system, such as progressive income taxes and unemployment benefits, that automatically dampen rises and falls in aggregate demand without any new government decision.
A bias in which people judge the likelihood or importance of an event by how easily examples come to mind, so recent, vivid or heavily reported events are overestimated.
Total cost per unit of output, found by dividing total cost by the quantity produced (AC = TC ÷ Q); also called average total cost.
A weighted average of the prices of all goods and services produced in an economy, measured by a price index; the variable on the vertical axis of an AD/AS diagram.
Total revenue per unit sold, found by dividing total revenue by the quantity sold (AR = TR ÷ Q); it equals the price, so the AR curve is the firm's demand curve.
Total tax paid as a percentage of total income: total tax divided by total income, multiplied by 100.
Total variable cost per unit of output, found by dividing total variable cost by the quantity produced (AVC = TVC ÷ Q).