Panhellenic Economics & Informatics key terms

The percentage change in quantity demanded divided by the percentage change in price. It shows how responsive buyers are to price movements; values above one in absolute value indicate elastic demand.

The value of the best alternative forgone when a choice is made. It includes both explicit money costs and implicit costs such as forgone income or time, and underlies the idea of comparative advantage.

The additional cost of producing one more unit of output, equal to the change in total cost divided by the change in quantity. Profit maximisation in competitive markets occurs where price equals marginal cost.

The difference between what consumers are willing to pay for a good and what they actually pay. Geometrically it is the area below the demand curve and above the market price.

The loss of total welfare, measured as lost consumer plus producer surplus, caused by market distortions such as taxes, monopolies or price controls that push quantity away from the efficient level.

Products that can replace each other in use, so that a rise in the price of one increases demand for the other. Their cross-price elasticity of demand is positive.

Products consumed together, such as printers and ink, so that a rise in the price of one reduces demand for the other. Their cross-price elasticity of demand is negative.

The ability of a producer to make a good at a lower opportunity cost than another producer. Specialising according to comparative advantage raises total output even when one party is absolutely more productive in everything.

A combination of strategies in which no player can gain by unilaterally changing strategy, given the others' choices. It is the central solution concept for analysing oligopoly behaviour and strategic interaction.

A strategy that yields a better payoff than any alternative regardless of what other players do. When every player has one, the resulting outcome is a Nash equilibrium reached without coordination.

A game in which each player has a dominant strategy leading to an outcome worse for both than mutual cooperation. It illustrates why rational individual choices can produce collectively inefficient results.

The market value of all final goods and services produced within a country's borders in a given period. It can be measured by expenditure, income or output approaches and excludes intermediate goods to avoid double counting.

A nominal value is measured at current prices, while a real value is adjusted for price changes using a base year or deflator. Real measures are needed to compare quantities across time.

A weighted average of the prices of a fixed basket of household goods and services, expressed relative to a base period. Its percentage change is a common measure of inflation.

A sustained rise in the general price level, reducing the purchasing power of money. It is typically measured by the annual percentage change in a consumer price index.

An empirical relationship showing an inverse short-run trade-off between inflation and unemployment. The long-run version is generally treated as vertical at the natural rate of unemployment.

The unemployment rate consistent with stable inflation, arising from frictions and structural factors rather than deficient demand. It is also called the non-accelerating-inflation rate of unemployment.

The ratio of the change in equilibrium output to an initial change in government spending or taxes. Its size depends on the marginal propensity to consume and on crowding-out effects.

The reduction in private investment caused by higher interest rates when expansionary fiscal policy is financed by borrowing. It weakens the effect of government spending on aggregate demand.

Features of the budget, such as progressive taxes and unemployment benefits, that dampen fluctuations in aggregate demand without any deliberate policy action. They reduce the amplitude of business cycles.

A result stating that the sum or mean of many independent, identically distributed random variables tends toward a normal distribution as sample size grows, regardless of the underlying distribution's shape.

The standard deviation of a statistic's sampling distribution, measuring how much an estimate would vary across repeated samples. It typically shrinks as the square root of sample size increases.

A range of values, computed from sample data, that is expected to contain the true population parameter in a stated proportion of repeated samples. Its width depends on variability and sample size.

The probability, assuming the null hypothesis is true, of observing a test statistic at least as extreme as the one calculated. Small values suggest the data are inconsistent with the null hypothesis.

A Type I error rejects a true null hypothesis, while a Type II error fails to reject a false one. Their probabilities trade off against each other for a fixed sample size.

An estimation method that chooses regression coefficients minimising the sum of squared residuals. Under Gauss-Markov assumptions the resulting estimator is the best linear unbiased estimator.

A condition in which the variance of regression errors differs across observations. It leaves coefficient estimates unbiased but makes standard errors unreliable unless robust methods are used.

The proportion of total variation in the dependent variable explained by a regression model. It ranges from zero to one and rises mechanically when more regressors are added.

A mathematical notation describing an upper bound on how an algorithm's running time or memory grows with input size, ignoring constant factors and lower-order terms.

A characterisation of how the number of elementary operations an algorithm performs scales with input size, usually expressed asymptotically. It allows comparison of algorithms independently of hardware.

A data structure storing key-value pairs in an array indexed by a hash function, giving average constant-time lookup, insertion and deletion. Collisions are resolved by chaining or open addressing.

Linear data structures distinguished by access order: a stack is last-in-first-out, while a queue is first-in-first-out. Both support constant-time insertion and removal at their respective ends.

A technique in which a function solves a problem by calling itself on smaller inputs, requiring a base case to terminate. Each call consumes stack memory, so deep recursion can overflow.

A design approach storing data in tables of rows and columns linked by keys, with normal forms reducing redundancy and update anomalies by eliminating partial and transitive dependencies.

A primary key uniquely identifies each row in a table, while a foreign key is a column referencing a primary key in another table. Together they enforce entity and referential integrity.

An operation combining rows from two or more tables based on a related column, typically an inner join matching only common values or an outer join preserving unmatched rows from one side.

A transaction is a unit of database work that must satisfy atomicity, consistency, isolation and durability, so that partial failures do not leave data in an inconsistent state.

A data structure, commonly a B-tree, that speeds up row retrieval on specified columns at the cost of extra storage and slower writes, because the index must be updated on modification.

An optimisation method that maximises or minimises a linear objective function subject to linear constraints. Solutions lie at vertices of the feasible region and are found by the simplex method.

The marginal change in the optimal objective value resulting from a one-unit relaxation of a constraint. It indicates which resource is most valuable to expand in a linear programme.

The principle that every linear programme has a companion dual problem whose optimal objective value equals the primal's. Dual variables correspond to shadow prices of the primal constraints.