EC4101 Week 2 Lecture 1

Study Notes

Time-Series Data: Measures of the same variable over time, presented in tabular or graphical formats.
Cross-Section Data: Records of an economic variable across different individuals or groups at a specific point in time.
Panel Data: Combines both Time-Series and Cross-Section Data by observing the same individuals or groups over multiple time periods.

Biocapacity: The Earth's capacity to provide resources and absorb waste.
Ecological Footprint: Humanity's demand on nature, measured by the amount of biologically productive land and sea area required to provide the resources we use and absorb the waste we generate.
Ecological Deficit: The gap between the Ecological Footprint and Biocapacity.
Economic Cost: The sum of explicit, opportunity, and sunk costs.
Explicit Cost: Monetary cost of an activity.
Opportunity Cost: The value of the best alternative that is sacrificed when making a choice.
Sunk Costs: Costs that cannot be recovered.
Sunk Cost Fallacy: The belief that past spending justifies continuing an investment, even if it is not economically beneficial.

Globalisation: Increased integration of economies across the world through the movement of goods, services, capital, knowledge, and people.
FDI: Foreign Direct Investment, where wealth moves out of a country.
Income Inequality: More wealth in the world each year, but unequally distributed.
Immigration: Can negatively impact native workers.
The Digital Economy: Characterized by two-sided markets, externalities, automation, and the rise of large digital platforms.
Externality: Occurs when one person's actions impact the production or consumption of others.
Law of Diminishing Marginal Returns: As production increases, the marginal product of an input usually decreases.
Economic Growth: Increase in the capacity of an economy to produce goods and services over time, measured by real GDP growth.

Comparative Advantage: Having a lower opportunity cost for producing a good compared to another producer.
Absolute Advantage: Producing a good at a lower cost than any other producer.
Market: A system where household consumption, firm production, and worker employment decisions are reconciled through price adjustments.
Command Economy: A government planning office controls production, distribution, and allocation of resources. E.g. North Korea.
Free Markets: Markets where governments do not intervene.
Invisible Hand: The idea that individual self-interest in free markets can lead to efficient allocation of resources for society.
Mixed Economy: A system where both the government and private sector work together to solve economic problems. E.g. Ireland.
State Capitalism: Most production is done by state-owned companies, while resource allocation is market driven. E.g. China.