Grade 11 Economics Flashcards

Key Concepts in Economics

• Factors of Production: Essential resources include LAND, LABOUR, CAPITAL, and ENTERPRISE for producing goods and services.

• Market System: A network for trading involving buyers, sellers, and other participants for specific products or services.

• Command System: Economic structure where the government oversees and controls the factors of production and directs the distribution of goods and services.

• Traditional System: An economic framework influenced by customs and beliefs, dictating the types of goods and services produced in the economy.

Economic Questions and Theorists

• Basic Economic Questions: Core queries include what to produce, how to produce, how much to produce, and for whom to produce.

• Adam Smith: Associated with the concept of the "invisible hand" promoting the Free Market System.

• Karl Marx: Key figure for theories on the command system and his work, "Das Kapital."

Demand and Utility

• Demand: The quantity of a good or service consumers are willing to purchase at various price levels within a time frame.

• Law of Demand: Indicates that quantity demanded inversely relates to price, assuming ceteris paribus (other conditions remain constant).

• Demand Schedule: A representation of the relationship between price and quantity demanded for a specific product.

• Demand Curve: Graphical representation with price on the vertical axis and quantity demanded on the horizontal axis.

• Abnormal Demand: Significant demand fluctuations due to promotions, price drops, or substitutes.

• Utility: Measures consumer preferences for various goods and services; marginal utility refers to the added satisfaction from one more unit consumed.

Profit and Cost Concepts

• Accounting Profit: The total earnings of a company after expenses are deducted.

• Total Cost: Sum of all expenses for achieving a certain output level, calculated as Variable Cost + Fixed Cost.

• Fixed Cost: Expenditures that do not change with production levels during a relevant period.

• Variable Cost: Costs that fluctuate with production volume.

• Total Revenue: Represents total sales revenue for a firm based on output quantity.

• Profit: The remaining income of a business after accounting for all costs.

• Marginal Revenue: The additional revenue generated from selling one more unit.

• Marginal Cost: The cost incurred from producing one additional unit of a good.

Market Structures

• Perfect Competition: A market structure where no single participant can influence the price of a homogeneous product.

• Monopoly: A market scenario where a single seller dominates the entire market for a product.

• Natural Monopoly: Certain products with high fixed costs are more efficiently produced by a single producer than by multiple smaller firms.

Economic Measures and Phenomena

• Real GDP: Adjusted measure of economic output that accounts for price changes.

• Macroeconomics: Study of the economy as a whole, focusing on large-scale economic factors.

• GDP: Represents the monetary value of all finished goods and services produced within a country's borders during a specific time.

Regulations and Externalities

• Deregulation: The reduction or elimination of government regulations within an economic context.

• Patents: Exclusive rights granted to inventors for a limited period in exchange for detailed public disclosure of inventions.

• Third Party Costs: Negative externalities that impose costs on parties not directly involved in the economic transaction.

• Externalities: Costs or benefits that impact individuals not participating in the economic activity.

Economic Indicators

• Inflation: Sustained increase in the overall price levels of goods and services across an economy.

• Consumer Price Index (CPI): Indicator showing the rate of price changes experienced by consumers.

Monetary Concepts

• Bank of Canada: Country's central bank responsible for regulating the money supply and interest rates.

• Prime Rate: The lowest interest rate available to borrowers, reflecting the cost of money.

• Tight Money: Availability of funds at higher interest rates, indicating restrictive monetary policy.

• Easy Money: Refers to favorable conditions for acquiring loans or financing, typically associated with an increased money supply.

• Bank Rate: Interest rate charged by the central bank to commercial banks for loans.