25 of the Economics glossary’s terms, each with the part of the syllabus where you first meet it.
A factor of production consisting of the physical and mental effort that people put into producing goods and services; its factor income is wages.
All people of working age who are either employed or unemployed, that is, without a job but willing, able and actively looking for work.
The labour force (the employed plus the unemployed) as a percentage of the working-age population.
The ease with which wages, hours and the number of workers adjust to changes in economic conditions, including how easily firms can hire and dismiss workers.
An organisation of workers that bargains collectively with employers over wages, working conditions and other terms of employment on behalf of its members.
The view that governments should intervene as little as possible in markets and leave economic decisions to individuals and firms; French for “let do” or “leave alone”.
A factor of production covering all natural resources, including the land surface, minerals, forests, fish stocks, water and the climate; its factor income is rent.
Legally recognised and secure rights of individuals, families or communities to occupy, use, transfer and benefit from land, often shown by a registered title or certificate.
A country with no coastline, whose foreign trade must pass by land through at least one neighbouring transit country to reach a seaport.
The principle that, ceteris paribus, as the price of a good rises the quantity demanded falls, and as the price falls the quantity demanded rises: an inverse relationship.
The principle that, in the short run, as more units of a variable factor are added to a fixed factor, the extra output from each additional unit of the variable factor eventually falls.
The principle that, as a consumer consumes more units of a good in a given period, the additional satisfaction gained from each extra unit eventually falls.
The principle that, ceteris paribus, as the price of a good rises the quantity supplied rises, and as the price falls the quantity supplied falls: a positive relationship.
Income taken out of the circular flow of income rather than spent on domestic goods and services: saving, taxes and spending on imports.
A government requirement that producers or professionals meet set standards and hold a permit before they may sell a product or practise, which gives buyers an assurance of minimum quality.
The average number of years a newborn baby would live if the patterns of mortality at the time of its birth stayed the same throughout its life.
The 45-degree line on a Lorenz diagram along which each percentage of the population receives the same percentage of income, showing a perfectly equal distribution.
The period of time in which all factors of production can be varied, so firms can change their scale of production and firms can enter or leave a market.
In the monetarist/new classical model, the total output an economy produces when all wages and prices have fully adjusted; a vertical line at the full employment level of output (potential output).
A curve showing the cumulative percentage of total income or wealth received by each cumulative percentage of the population, ranked from the poorest to the richest.
The situation in which total revenue is less than total economic cost, so the firm earns less than normal profit; shown by average revenue below average cost (AR < AC).
The tendency for people to feel a loss more strongly than a gain of the same size, so they act to avoid losses more than to achieve equal gains.
The reduction in a country’s ability to make its own economic decisions, such as setting tariffs, standards or monetary policy, when it accepts the shared rules of a trading bloc or monetary union.
A normal good with income elastic demand, so that YED is greater than 1 and spending on it rises faster than income.