经济学名词初步整理(English)

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是啊，为什么是英语呢？:-)

FUNDAMENTAL ECONOMIC CONCEPTS:

Microeconomics:

Microeconomics looks at how individuals and businesses make decisions about what to buy, sell, or produce. For example, it studies how a consumer decides between buying a smartphone or a laptop based on prices and personal preferences.

Macroeconomics:

Macroeconomics studies the overall economy, including topics like unemployment rates, inflation, and economic growth for an entire country. For example, it examines how government policies affect the overall employment levels in a country.

Economic Development:

Economic development focuses on improving living standards and opportunities for people. For example, it involves efforts to build new schools, hospitals, and infrastructure in a developing country to improve quality of life and attract more foreign direct investment.

Government’s Role:

Microeconomics:

Governments regulate markets, enforce competition laws, and provide public goods like education and healthcare. For example, regulations on monopolies ensure fair competition, and subsidies for education aim to boost human capital and productivity.

Macroeconomics:

Governments use fiscal and monetary policies to stabilise the economy, control inflation, and promote sustainable growth. For example, during economic downturns, governments may increase spending to stimulate demand and reduce unemployment.

Economic Development:

Governments create long-term strategies to promote growth, reduce poverty, and improve living standards. This involves investing in infrastructure, implementing industrial policies, and attracting foreign investment through incentives. For instance, tax breaks for multinational corporations can promote job creation and diversify the economy.

THE ECONOMIC PROBLEM

The Economic Problem:

The Economic Problem is that resources are limited or scarce, while human needs and wants are unlimited. Scarcity of resources necessitates choices to be made about how to allocate resources efficiently.

Choices:

Choices are decisions made by consumers, producers and government in response to the economic problem.

Opportunity Cost:

Opportunity Cost is the value of the next best alternative that must be foregone when a decision is made to allocate resources in a particular way. It reflects the trade-off involved in choosing one option over another.

Allocation of Resources:

Allocation of Resources refers to the distribution of scare resources among competing uses. This process involves determining how resources such as land, labour and capital are utilised to produce goods and services.

Production Possibilities Curve (PPC):

Production Possibilities Curve is a graphical representation of the different combinations of two goods that can be produced with the available resources and technology. It illustrates the concept of opportunity cost showing the trade-offs involved in producing one good over another.

DEMAND

Law of Demand:

Law of Demand suggests when prices increase, quantity demanded decreases; when prices decrease, quantity demanded increases.

Quantity Demanded:

Quantity Demanded is the amount of a good or service consumers are willing and able to buy at different prices during a given period of time.

Demand Curve:

Demand Curve is a graph that shows the inverse relationship between price and quantity demanded.

Demand Schedule:

Demand Schedule shows the quantity demanded at different prices and used to create a demand curve.

Price:

Price is the amount consumers pay when buying a good or service.

SUPPLY

Law of Supply:

Law of Supply suggests when prices increase, quantity supplied increases; when prices decrease, quantity supplied decreases.

Quantity Supplied:

Quantity Supplied is the amount of a good or service producers are willing and able to buy at different prices during a given period of time.

Supply Curve:

Supply Curve is a graph that shows the positive relationship between price and quantity supplied.

Supply Schedule:

Supply Schedule shows the quantity supplied at different prices and is used to create a supply curve.

Price:

Price is the amount producers charge when selling a good or service.

EQUILIBRIUM AND PRICE MECHANISM

Equilibrium:

Equilibrium occurs when the quantity demanded equals the quantity supplied, resulting in a stable market with no tendency for price and quantity to change.

Disequilibrium:

Disequilibrium occurs when the quantity demanded and quantity supplied are not equal, leading to either a surplus or shortage.

Shortage:

Shortage：occur when the quantity demanded of a good or service exceeds the quantity supplied at a given price. This results in upward pressure on prices, as consumers compete to purchase the limited available supply.

Surplus：

Surplus occurs when the quantity supplied of a good or service exceeds the quantity demanded at a given price. This leads to downward pressure on prices, as producers try to sell the excess stock by making it more attractive to buyers through price reductions.

The Price Mechanism:

The Price Mechanism is the process by which prices are determined in a free market through the interaction of demand and supply. The price mechanism answers the fundamental economic questions of what to produce, how to produce, how much to produce, and for whom to produce.

Resource Allocation:

Resource Allocation refers to the process by which available resources - such as labour, capital, land, and raw materials—are distributed and used to produce goods and services.

Derived Demand:

Derived Demand refers to the demand for a particular product or resource that is driven by the demand for another product. E.g., The demand for steel is derived from the demand for other products that use steel as an input.

PRICE ELASTICITY OF DEMAND (PED)

Elasticity of Demand:

Elasticity of Demand measures how much the quantity demanded of a good respond to a change in its price.

Elastic Demand:

1 < PED < ∞: Quantity demanded is relatively responsive to price changes.

Inelastic Demand:

0 < PED < 1: Quantity demanded is relatively unresponsive to price changes.

Perfectly Inelastic Demand:

PED = 0: Quantity demanded remains constant regardless of price changes.

Perfectly Elastic Demand:

PED = ∞: At the market price P, consumers will buy any quantity that is available. If price rises, quantity demanded drops to zero.

Unitary Elastic Demand:

PED = 1: Percentage change in quantity demanded equals percentage change in price changes.

PRICE ELASTICITY OF SUPPLY (PES)

Elasticity of Supply

Elasticity of Supply measures how much the quantity supplied of a good respond to a change in its price.

Elastic Supply:

PES > 1: Producers can increase output significantly when prices rise.

Inelastic Supply:

PES < 1: Producers cannot easily change output levels in response to price changes.

Perfectly Inelastic Supply:

PES = 0: Quantity supplied remains constant regardless of price changes.

Perfectly Elastic Supply:

PES = ∞: Any amount of a good will be supplied at the prevailing price, but nothing is supplied below this prevailing price.

Unitary Elastic Supply:

PES = 1: a change in the price of a good results in an equally proportional change in quantity supplied.

GOVERNMENT INTERVENTION

ACCC:

Australian Competition and Consumer Commission

Externalities:

Externalities also referred to as spillover costs or benefits, are the side effects of economic activities that are not reflected in the market price.

Positive consumption externalities:

Positive consumption externalities occur when the consumption of certain goods creates benefits for third parties not involved in the transaction.

Negative production externalities:

Negative production externalities occur when the production of a good or service imposes costs on third parties not involved in the transaction.

Negative consumption externalities:

Negative consumption externalities occur when the consumption of certain goods imposes costs on third parties not involved in the transaction.

Positive production externalities:

Positive production externalities occur when the production of a good or service results in benefits to third parties not involved in the transaction.

Merit goods:

Merit goods have positive externalities as people underestimate benefits.

Demerit goods:

Demerit goods have negative externalities as people underestimate costs.

Public Good:

A good that is non-excludable and non-rival.

Income:

Income represents the earnings of an individual derived from providing factors of production.

Wealth:

Wealth includes the values of assets individuals own.

Transfer Payments:

Transfer Payments These are direct disadvantaged and low-income individuals without the requirement to work.

Progressive Taxation:

A tax system payments made by the government to where high-income earners are taxed at a higher rate, proportionally to their income.

Price controls:

Refer to government policies or regulations that dictate the prices at which goods or services can be bought or sold in a market.

Price Ceiling:

Maximum price set by the government that are below the market equilibrium price.

Price Floors:

Minimum prices set by the government that are above the market equilibrium price.

Production quota:

A limit on the quantity of goods that producers are allowed to produce.

COSTS OF PRODUCTION

Variable and Fixed Factors of Production:

Variable factors are the inputs that change with the level of output. Whereas the fixed factors are the inputs that remain constant regardless of the level of output.

Short Run and Long Run:

Short run refers to the period where at least one factor of production is fixed. Long run refers to the period where all factors of production are variable.

Marginal Product (MP):

Marginal Product is the change in total product when one more unit of variable factor is used.

Marginal Cost (MC):

Marginal Cost is the additional cost incurred by producing one more unit of production.

Returns to Scale:

It refers to how the output of production process changes in response to a proportional change in all inputs. Returns to scale is classified into three types.

Increasing Returns to Scale:

When a proportional increase in all inputs leads to a more than proportional increase in output.

Constant Returns to Scale:

Constant Returns to Scale is when proportional increase in all inputs results in equivalent increase in output.

Decreasing Returns to Scale:

Decreasing Returns to Scale is when a proportional increase in all inputs leads to a less than proportional increase in output.

REVENUE & PROFIT MAXIMISATION

Total Revenue (TR):

The income earned from selling output. TR = P x Q

Average Revenue (AR):

The average income per unit of output sold. AR = TR / Q

Marginal Revenue (MR):

The additional revenue earned from selling one more unit of output. MR = ∆TR/∆Q

Profit Maximisation:

The point where a firm achieves the highest possible profit. MR = MC

Profit:

Profit is the money a business makes after subtracting all its costs from what it earns. Profit = TR – TC or Profit = (AR – AC) x Q

Break Even:

The level of output at which the firm is earning zero economic profit. BE = TR = TC

Supernormal Profit:

Is the profit that is more than what is needed to cover costs and risks. Also referred to as economic profit. SNP = AR > AC

Normal Profit:

Is the profit that is just sufficient to keep the enterprise and entrepreneur in the industry. Equal to the opportunity cost. NP = AR = AC

Loss:

Is when a firm’s costs are greater than the revenue it earns from sales, resulting in a negative financial outcome. Loss = AC > AR

Loss Minimisation:

Occurs when a firm continues production even though they are making losses, but able to cover variable costs in the short term. AR > AVC

Shutdown:

Occurs when the firm decides to temporarily cease production in the short term due to inability to cover variable costs. AR < AVC

PERFECT COMPETITION

Market Structures:

Refer to the different types of markets that exist based on the level of competition. The key factor that distinguishes market structures is the level of market power that firms have.

Perfect Competition:

Is a theoretical market structure used as the starting point to understand firm’s behaviour and how they operate.

Homogenous Products:

Refer to the identical products in quality and characteristics regardless of the producer.

Price Taker:

Refers to the firm in perfect competition, where a firm has no influence over the market price and must accept the prevailing market price for its product.

Performance:

of the firm is evaluated through various efficiencies. Allocative efficiency is when resources are used where they are most valued (achieved in perfect competition). Productive efficiency is when goods are produced at the lowest cost (achieved in perfect competition). Dynamic efficiency is when firms invest in R & D for innovation and long-term growth.

MONOPOLY

Monopoly:

Refers to the marketstructure where there is one producer,who can determine the market price byvarying its level of output.

Barriers to Entry:

Refer to the obstacles for new firms entering the market such as patents, high capital investment and government restrictions.

Price Maker:

Is the ability of the monopolist firm that can set the price in the industry.

Supernormal Profit:

Refers to profit exceeding the level which is minimum amount necessary to keep a firm in business.

High Concentration Ratio:

In a monopoly indicates that a single firm dominates the market, controlling a large proportion of the total market share.

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