Cameroon GCE A-Level Economics key terms

The condition in which available resources are insufficient to satisfy all human wants, forcing individuals and societies to make choices about what to produce and consume.

The value of the next best alternative forgone when a choice is made, measured by what must be given up to obtain a good or service.

A curve showing the maximum combinations of two goods an economy can produce when all resources are fully and efficiently employed, given current technology.

The resources used to produce goods and services: land, labour, capital and entrepreneurship, each earning a corresponding reward of rent, wages, interest and profit.

A measure of how responsive quantity demanded is to a change in price, calculated as the percentage change in quantity demanded divided by the percentage change in price.

A measure of how responsive quantity supplied is to a change in price, calculated as the percentage change in quantity supplied divided by the percentage change in price.

The responsiveness of quantity demanded to a change in consumer income, calculated as the percentage change in quantity demanded divided by the percentage change in income.

The situation where quantity demanded equals quantity supplied at a particular price, so there is no tendency for the price to change.

The price at which quantity demanded equals quantity supplied, clearing the market and leaving neither a shortage nor a surplus.

A situation where quantity demanded exceeds quantity supplied at a price below equilibrium, creating a shortage that tends to push the price upward.

A good whose demand rises when consumer income rises, so that it has a positive income elasticity of demand.

A good whose demand falls when consumer income rises, so that it has a negative income elasticity of demand.

The principle that as a consumer consumes more units of a good, the additional satisfaction gained from each extra unit falls, other things equal.

The additional satisfaction a consumer derives from consuming one more unit of a good or service in a given period.

A curve showing all combinations of two goods that give a consumer the same level of satisfaction, so the consumer is indifferent between them.

A line showing the combinations of two goods a consumer can afford to buy given income and prices, with its slope reflecting relative prices.

The rate at which a consumer is willing to give up one good to obtain one more unit of another while keeping total satisfaction constant, equal to the slope of an indifference curve.

The principle that as more of a variable input is added to fixed inputs, the marginal product of the variable input eventually falls.

A cost that does not vary with the level of output in the short run, such as rent on a factory or interest on a loan.

A cost that changes directly with the level of output, such as spending on raw materials and hourly labour.

The addition to total cost resulting from producing one more unit of output.

A market structure with many small firms selling an identical product, free entry and exit, and perfect information, so each firm is a price taker.

A market structure in which a single firm supplies the entire output of a good with no close substitutes and strong barriers prevent new entrants.

A market structure dominated by a few large firms whose decisions are interdependent, often leading to price rigidity and non-price competition.

A market structure with many firms selling differentiated products, free entry and exit, and some price-setting power for each firm.

Markets in which the services of land, labour, capital and entrepreneurship are bought and sold, determining rent, wages, interest and profit.

The reward to entrepreneurship, calculated as total revenue minus total cost, and serving as the signal that guides resource allocation between industries.

A cost or benefit arising from production or consumption that falls on third parties not involved in the transaction and is not reflected in market prices.

A situation in which the free market fails to allocate resources efficiently, producing too much or too little of a good compared with the social optimum.

A good that is non-rival and non-excludable, so that one person's use does not reduce availability to others and non-payers cannot be excluded.

The total market value of all final goods and services produced within a country's borders during a given period, usually a year.

A model showing how income, output and expenditure move between households and firms, with leakages such as saving and imports offset by injections such as investment and exports.

The total income earned by a country's residents from producing goods and services over a period, used to measure economic activity and living standards.

A sustained rise in the general price level of goods and services in an economy over time, reducing the purchasing power of money.

The use of interest rates, money supply and credit controls by a central bank to influence aggregate demand and control inflation.

The situation where people who are willing and able to work at the going wage cannot find jobs, measured as a proportion of the labour force.

The use of government taxation and public spending to influence aggregate demand, employment and the level of economic activity.

A record of all economic transactions between a country's residents and the rest of the world over a period, comprising the current and capital accounts.

The price of one currency expressed in terms of another, determined by demand and supply in foreign exchange markets or fixed by government policy.

The growing integration of national economies through trade in goods and services, cross-border investment, migration and the transfer of technology and information.