GTLE Economics key terms

The value of the next best alternative given up when a choice is made. It includes both explicit money costs and the implicit value of forgone options, and underpins all scarcity-based reasoning.

The condition in which resources are limited relative to unlimited wants. It forces choice and gives rise to opportunity cost, making it the foundational problem of economics.

Decision-making that compares the additional benefit of one more unit against its additional cost. Rational agents act when marginal benefit exceeds marginal cost, which explains many optimizing behaviors.

A curve showing the maximum combinations of two goods an economy can produce with given resources and technology. Points inside are inefficient, points outside are unattainable, and its slope reflects opportunity cost.

The ability to produce a good at a lower opportunity cost than another producer. It explains why specialization and trade raise total output even when one party is absolutely better at everything.

The ability to produce more output with the same resources, or the same output with fewer resources, than another producer. It differs from comparative advantage, which drives gains from trade.

The relationship in which quantity demanded falls as price rises and quantity supplied rises as price rises. Their interaction determines equilibrium price and quantity in a competitive market.

The price and quantity at which quantity demanded equals quantity supplied, leaving no tendency to change. Shifts in either curve move equilibrium; surpluses and shortages push price toward it.

A measure of how responsive one variable is to changes in another, most often quantity to price. Price-elastic demand means large quantity changes; inelastic demand means small ones, affecting revenue and tax incidence.

A legally imposed maximum price, set below equilibrium to protect consumers. It creates shortages, non-price rationing, and possible black markets, so its effects must be weighed against its intent.

A legally imposed minimum price, such as a minimum wage, set above equilibrium. It creates surpluses or unemployment and is a common source of policy debate about unintended consequences.

A cost or benefit from a transaction that falls on third parties not involved in it. Negative externalities cause overproduction and positive ones underproduction, justifying taxes, subsidies, or regulation.

A situation where free markets allocate resources inefficiently, as with externalities, public goods, monopoly power, or asymmetric information. It is a standard rationale for government intervention.

A good that is non-rival and non-excludable, such as national defense. Because people can free-ride, private markets tend to underprovide it, so public funding is often justified.

The loss of total welfare when quantity traded differs from the efficient level, often from taxes, price controls, or monopoly. It is shown as the area of lost surplus on a supply and demand diagram.

The division of a tax's burden between buyers and sellers. It depends on relative elasticities, not on who formally pays, and illustrates how markets shift policy costs.

A market with a single seller facing no close substitutes, often protected by barriers to entry. The firm restricts output and raises price, creating deadweight loss and a case for regulation.

A market dominated by a few large firms whose decisions are interdependent. Strategic behavior, collusion risk, and game-theoretic reasoning distinguish it from perfect competition and monopoly.

The study of strategic interaction where each player's outcome depends on others' choices. Tools such as the prisoner's dilemma explain collusion, pricing wars, and why cooperation can be hard to sustain.

The inputs used to produce goods and services: land, labor, capital, and entrepreneurship. Their returns are rent, wages, interest, and profit, linking factor markets to income distribution.

The principle that adding more of one variable input to fixed inputs eventually yields smaller additional output. It underlies rising marginal costs and the upward-sloping supply curve.

A sustained rise in the general price level, eroding purchasing power. It is measured by consumer price indices and addressed through monetary and fiscal policy, with costs for savers and fixed-income groups.

The share of the labor force without work but actively seeking it. Types include frictional, structural, and cyclical, each with different policy responses and social consequences.

Government use of spending and taxation to influence aggregate demand and stabilize the economy. Expansionary policy raises spending or cuts taxes; contractionary policy does the reverse, with effects on debt.

Central bank action to influence money supply and interest rates, usually targeting inflation and employment. Tools include policy rates, reserve requirements, and open market operations.

The total market value of final goods and services produced within a country in a period. It measures output but omits unpaid work, inequality, and environmental costs, so it is an imperfect welfare indicator.

A sustained increase in real output per capita over time. It depends on capital accumulation, human capital, technology, and institutions, and is central to long-run living-standard improvement.

Designing intended learning outcomes, teaching activities, and assessment tasks so they reinforce the same verbs and cognitive demands. It ensures assessments actually measure what the curriculum claims to teach.

Ongoing assessment used to inform teaching and learning rather than to grade. Feedback loops help students close gaps before summative judgments, and its evidence should shape subsequent instruction.

Assessment at the end of a unit or course that judges achievement against standards. Results are reported and often used for progression, so validity and reliability matter greatly.

The verb in an assessment question that signals the required cognitive operation, such as explain, evaluate, or calculate. Students must respond at that level to earn full marks.

A scoring guide listing criteria and performance levels, making judgments transparent and consistent. It supports reliability across markers and gives students a clear picture of expected quality.

A quality-assurance process in which markers compare and adjust judgments to ensure consistency against shared standards. It protects fairness when multiple assessors judge the same work.

The extent to which an assessment measures what it claims to measure. A valid economics task tests economic reasoning, not merely recall or reading speed, and matches the intended learning outcomes.

The consistency of assessment results across occasions, markers, and tasks. A reliable assessment yields similar scores for similar performance, which is necessary but not sufficient for validity.

Information given to learners about their performance that helps them improve. Effective feedback is specific, timely, and focused on the task and next steps rather than on personal traits.

Adapting content, process, or product to meet varied learner needs while keeping common goals. In economics it might mean scaffolded data interpretation or extension tasks on evaluation skills.

Temporary structured support, such as worked examples or sentence starters, that is gradually withdrawn as learners gain competence. It makes complex economic reasoning accessible without lowering expectations.

A situation where a professional's personal interest could improperly influence their duties, such as tutoring their own students for pay. It must be disclosed and managed to protect fairness and trust.

The duty to protect learner information from unauthorized disclosure. It applies to records, assessment data, and conversations, with limited exceptions required by law or safeguarding concerns.

Legal rules governing the collection, storage, use, and sharing of personal data. Educators must hold only necessary information, keep it secure, and respect access and correction rights.

The legal right of creators to control reproduction and use of their work. Teachers may use limited exceptions for instruction but must not copy or redistribute protected materials without permission.

A change to assessment or teaching arrangements that removes barriers for learners with disabilities without compromising the standard being assessed. It supports equal opportunity and is often legally required.

Consistently acting honestly, fairly, and in learners' best interests, even under pressure. It includes accurate reporting of results, avoiding misrepresentation, and upholding public trust in the profession.