IB Economics HL Vocab
Terms
- Ad Valorem Tax
- A tax that is a fixed percentage of the selling price of a commodity.
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Ceteris Paribus
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All other influencing factors are held constant.
refers to supply and demand
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Cross-elasticity of demand
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A measure of the responsiveness of the demand for one product to a change in the price of another product.
It is measured by a percentage change in quantity of good X demanded divided by percentage change in price of good y.
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Free Good
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A good in unlimited supply at zero price.
Air is a free good
- Normative Economics
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Based on value judgements (matters of opinion) about how an economy works.
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Opportunity Cost
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The cost of the decision to produce or to consume one product instead of producing or consuming another product.
It is not measured in money terms, but is the cost in terms of best alternative forgone.
- Positive Economics
- Based on statements of fact, which can be proved or disproved, about how an economy works
- Scarcity
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Exists when there are insufficient products and productive factors to satisfy all consumer needs and therefore an allocative mechanism is required.
It is the fundamental economic problem.
- Buffer stock
- Stocks of commodities, such as wheat, which are held and can be used in the event of shortages. Keeping a buffer stock may help to prevent low prices during a glut or high prices during times of shortage.
- Price Elastic
- a change in price leads to a proportionately larger change in quantity demanded.
- A
- A