Economics Terms

All definitions of terms that you need to know in the Economics IB HL syllabus. 

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Definition of Growth, Development and Sustainable

Growth: National income is the value of all the goods and services produced in an economy in a given time period, normally one year. 

Development: A measure of welfare and over all well being. 

Sustainable Development: If production can meet the needs of the present without comprimising the ability of future generations and the ability to meet their own needs. 

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Definition of Positive and Normative

Positive Economics: a statement that can be proven wrong or right by looking at the facts.

Normative Economics: a statement that can't be proven right or wrong but are open to opinion. 

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Definition: Scarcity and Factors of Production

Scarcity: all good ands services that have a price are relatively scarce, thus they are scarce relative to people's demand for them because consumer want is unlimited. 

Factors of Production

Land: all natural resources and other things found on the land, in the land and under the land that is owned by the firm. 

Labour: human workforce, its the mental and physical contribution of the existing workforce. 

Capital: factor of prodyction recieved from investment and human workforce, like education and healthcare.

Entrepeneurship: organising and risk-taking factor of production. Entrepeneurs and managers organise all other factors of production. 

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Definition: Choice and Utility + Opportunity Cost

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