1: The term income elasticity of demand

The term income elasticity of demand refers to the measure of the

responsiveness of the quantity demanded for a good or service to a
change in the income of the people demanding the good or service.

2: Define income elasticity

Income elasticity is a measure of the responsiveness of demand for a
good or service to a change in the income of the people demanding the
good or service.

3: Define term monopoly

A monopoly is a market structure in which a single firm dominates the

entire market for a particular good or service, and is able to control
prices and output without facing significant competition.

4: Define monopoly

A monopoly is a market structure in which a single firm dominates the

entire market for a particular good or service, and is able to control
prices and output without facing significant competition.

5: List & enlist the factors of production

The factors of production are:

● Land
● Labor
● Capital
● Entrepreneurship.

6: Define factors of production

The factors of production are the resources used in the production
process to create goods and services. They are land, labor, capital, and
entrepreneurship.

7: List the determinants of supply

The determinants of supply are the price of the good or service, the cost
of production, the price of related goods or services, technology,
government policies, and the number of suppliers in the market.

8: Unlist the determinants of supply

The determinants of supply are the price of the good or service, the cost
of production, the price of related goods or services, technology,
government policies, and the number of suppliers in the market.

9: Unemployment rate

The unemployment rate is the percentage of the total labor force that is
unemployed but actively seeking employment and willing to work.

10: The term marginal revenue

Marginal revenue refers to the additional revenue generated by

producing and selling one more unit of a product or service. It
represents the change in total revenue resulting from a one-unit
change in output quantity. In other words, marginal revenue is the
revenue gained from selling an additional unit of a product.

11: What is GDP & GNP

GDP stands for Gross Domestic Product and refers to the total value of
goods and services produced within a country's borders in a given
period of time.

GNP stands for Gross National Product and refers to the total value of
goods and services produced by a country's residents regardless of their
location, in a given period of time.

12: Define fiscal policy

Fiscal policy refers to the government's use of taxation and spending to

influence the economy. It is used to stabilize the economy by adjusting
spending levels and tax rates to influence aggregate demand.

13: Define monetary policy

Monetary policy refers to the actions taken by a central bank to manage

and regulate the supply of money and credit in an economy to achieve
specific economic objectives, such as controlling inflation, stabilizing
prices, and promoting economic growth.

14: Cross elasticity of demand

Cross elasticity of demand is a measure of the responsiveness of the

demand for a good to a change in the price of another good. It measures
the percentage change in the quantity demanded of one good in
response to a percentage change in the price of another good.

15: Cross elasticity of supply

Cross elasticity of supply measures the responsiveness of the

quantity supplied of a particular good to a change in the price of
another related good. In simple terms, it indicates how much the
supply of one product changes when the price of a different product
changes.
16: Law of demand & supply

Law of Demand: The law of demand states that, all else being equal, as
the price of a product or service increases, the quantity demanded by
consumers decreases, and as the price decreases, the quantity
demanded increases. In simpler terms, when the price of something
goes up, people tend to buy less of it, and when the price goes down,
people tend to buy more.
For example, if the price of a pizza increases, people may choose to
buy fewer pizzas because they find it less affordable. Conversely, if the
price of a smartphone decreases, more people may decide to purchase
one because it becomes more accessible.

Law of Supply: The law of supply states that, all else being equal, as
the price of a product or service increases, the quantity supplied by
producers increases, and as the price decreases, the quantity supplied
decreases. In other words, producers are generally willing to supply
more of a product at higher prices and less at lower prices.
For instance, if the price of coffee rises, coffee producers may be
motivated to increase their production and supply more coffee to the
market, anticipating higher profits. Conversely, if the price of coffee falls,
some producers may reduce their output or even exit the market since
the lower price may not cover their production costs.

17: Define inflation

Inflation refers to the rate at which the general level of prices for goods
and services is increasing, and, subsequently, purchasing power is
decreasing.

18: Enlist source of inflation

Inflation can be caused by a variety of factors, including an increase in

the supply of money, a decrease in the supply of goods, an increase in
demand for goods and services, and an increase in production costs.

19: Monopolistic competition

Monopolistic competition is a type of market structure in which many
firms sell products that are similar but not identical. This leads to a
situation where each firm has some degree of market power, which
allows them to set their prices and differentiate their products from those
of their competitors.

20: Law of increasing return to scale

The law of increasing returns to scale means that when a company

increases its inputs like labor, capital, and materials by a certain
percentage, the output or production will increase by an even greater
percentage. This results in lower costs for each unit produced and can
lead to economies of scale.

21: Balance of payment

The balance of payments is a record of all transactions between the

residents of one country and the residents of all other countries during a
given period of time. It includes transactions related to the trade of goods
and services, as well as financial flows such as investments, loans, and
remittances.

22: Production possibility curve

The Production Possibility Curve (PPC) is a graphical representation of

the maximum amount of two goods that an economy can produce when
all its resources are fully and efficiently employed. The curve shows the
tradeoff between producing one good over the other, assuming a fixed
level of technology and resources. In simpler terms, it shows the
different combinations of two goods that can be produced with limited
resources.

23: Exchange rate & Business Cycle

Exchange rate refers to the value of one currency in relation to another

currency. It is the price of one currency expressed in terms of another
currency. For example, the exchange rate between the US dollar and the
euro might be 1 USD = 0.85 EUR, meaning that one US dollar can be
exchanged for 0.85 euros. Exchange rates are determined by the market
forces of supply and demand, and they fluctuate constantly based on
various economic and political factors.

The business cycle refers to the recurring pattern of economic

expansion and contraction that occurs in an economy over time. It
represents the ups and downs, or the fluctuations, in economic activity.
The business cycle is characterized by alternating periods of expansion,
peak, contraction, and trough.

24: Law of diminishing marginal utility

The law of diminishing marginal utility states that as a person increases

consumption of a product, while keeping consumption of other products
constant, there is a decline in the marginal utility that person derives
from consuming each additional unit of that product.

25: Production possibilities frontier

The production possibilities frontier is a visual representation of the

maximum output that an economy can produce given its available
resources and technology. It shows the different combinations of two
goods that an economy can produce using all of its resources efficiently.

26: List & unlist the determinants of demand

Here are the determinants of demand:

List:
1. Consumer income
2. Price of related goods
3. Consumer tastes and preferences
4. Demographics
5. Consumer expectations

27: What are the measures of inflation

Measures of inflation are tools used to track and quantify changes in the
general price level of goods and services in an economy over time. They
provide information about the rate at which prices are increasing or
decreasing.
The two main measures of inflation are the Consumer Price Index (CPI)
and the Producer Price Index (PPI).

28: Characteristics of monopoly

A monopoly is a market structure where there is only one seller of a

product or service. This seller has complete control over the supply of
goods and services, which allows them to charge higher prices and earn
greater profits. There are no close substitutes for the product or service
offered by the monopolist, which means that consumers have no choice
but to buy from them. High barriers to entry make it difficult for new firms
to enter the market and compete with the monopolist, further entrenching
the monopolist's market power. Lack of competition also means that the
monopolist has little incentive to innovate or improve their products.

29: Flexible exchange rate

A flexible exchange rate is a type of exchange rate regime where a

currency's value is allowed to fluctuate freely against other currencies in
the foreign exchange market. The exchange rate is determined by
market forces of supply and demand without any intervention from the
government or central bank. This means that the exchange rate can rise
or fall depending on the demand for and supply of the currency in the
market. Flexible exchange rates are used by many countries as they
provide greater flexibility in responding to changes in the global
economy. However, they can also lead to greater volatility and
uncertainty in the foreign exchange market.

30: Price elasticity of demand

Price elasticity of demand is a measure of how much the demand for a
product or service changes when its price changes. If the demand
changes a lot when the price changes a little, the product or service is
said to be price elastic. If the demand changes only a little when the
price changes a lot, the product or service is said to be price inelastic.

31: Market Equilibrium

Market equilibrium is a state in which the supply and demand for a good
or service are balanced, resulting in an optimal price and quantity. At
equilibrium, the quantity of the good or service that buyers are willing to
purchase is equal to the quantity that sellers are willing to supply, and
there is no excess supply or excess demand. The equilibrium price is the
price at which the quantity demanded equals the quantity supplied, and it
represents the market-clearing price.

32: Marginal Cost

Marginal Cost is the additional cost incurred in producing one more unit
of a product or service. It helps firms determine the optimal level of
production, where marginal cost equals marginal revenue.

33: Monetary Policy

Monetary policy refers to the actions taken by a central bank to manage

the money supply and interest rates in an economy. The primary goal of
monetary policy is to promote price stability, which is achieved by
controlling inflation. Central banks use various tools, such as adjusting
interest rates, open market operations, and reserve requirements, to
influence the money supply and interest rates in the economy. By
influencing the cost of borrowing and the availability of credit, monetary
policy can also affect economic growth and employment.

34: Enlist phases of business cycle

The business cycle is a pattern of economic growth and contraction that

occurs over time. It has four phases: expansion, peak, contraction, and
trough. During the expansion phase, the economy is growing,
businesses are expanding, and unemployment is low. At the peak, the
economy has reached its maximum level of growth and begins to slow
down. During the contraction phase, economic growth slows down,
unemployment rises, and businesses begin to contract. At the trough,
the economy reaches its lowest point and begins to recover.

35: Conditions of firm equilibrium

A firm is said to be in equilibrium when it is maximizing its profits. This

occurs when the firm is producing at a level where marginal revenue
equals marginal cost. In other words, the firm is producing the quantity
that generates the highest profit. The condition for profit maximization is
that marginal revenue (MR) equals marginal cost (MC). If MR is greater
than MC, the firm should increase production to increase profits. If MR is
less than MC, the firm should decrease production to increase profits.

36: Elasticity of supply

Elasticity of supply refers to how much the quantity of a product supplied

changes in response to a change in its price. If the quantity supplied
changes significantly in response to a small change in price, the supply
is considered elastic. However, if the quantity supplied changes very little
in response to a change in price, the supply is considered inelastic. The
elasticity of supply is influenced by factors such as the availability of raw
materials, production technology, and the production time horizon.

37: Law of equi-marginal utility

The law of equi-marginal utility is a principle in economics that states

that a consumer will allocate their money income among different goods
in such a way that the marginal utility derived from the last unit of each
good purchased is equal. This means that a consumer will aim to
maximize their total satisfaction subject to their budget constraint. By
allocating their income in this way, the consumer can achieve the highest
level of satisfaction possible. The law of equi-marginal utility is also
known as the law of substitution, as it implies that the consumer will
substitute one good for another until the marginal utility per dollar spent
on each good is equal.

38: Marginal revenue

Marginal revenue is the additional revenue that a firm earns by selling

one additional unit of its product. It is the change in total revenue divided
by the change in the quantity of output sold. In simple terms, it is the
revenue a company receives from selling one more unit of its product. In
a perfectly competitive market, where price is constant, marginal
revenue is equal to the price of the product. However, in a market with
market power, such as a monopoly, marginal revenue is less than the
price of the product because the firm must lower its price to sell
additional units of output.

39: What is real GDP

Real GDP is a measure of the total economic output of a country that

takes into account changes in the price level over time. It is calculated by
adjusting the nominal GDP for inflation. Real GDP is a more accurate
measure of economic growth than nominal GDP because it allows
comparison of economic output over time and across countries. Real
GDP is used to track the performance of the economy and to make
policy decisions.

40: Opportunity Cost

Opportunity cost is a concept that refers to the value or benefit of the

next best alternative that is foregone when making a decision. In simpler
terms, it is what you give up or sacrifice when you choose one option
over another.
When you make a choice, you inevitably give up the opportunity to enjoy
the benefits or advantages of the alternative option you didn't choose.
The opportunity cost is the value of those benefits or advantages that
you miss out on.

OR
Because our resources are limited, we must decide how to allocate our
incomes or time.
For example, when you decide whether to study economics , buy a car,
or go to a college, you will give something up-there will be a forgone
opportunity.

41: Assumption of Monopolist Competition

Monopolistic competition is a market structure in which there are many

firms selling similar but not identical products. There are several key
assumptions of monopolistic competition, including:

1. Many firms: There are many firms in the market, each of which has a
relatively small market share.

2. Product differentiation: Each firm produces a slightly different product,

which is not a perfect substitute for the products of other firms.

3. Free entry and exit: Firms are free to enter or exit the market as they
wish, which means that there are no significant barriers to entry.

4. Non-price competition: Firms compete on factors other than price,

such as advertising, product quality, and customer service.

5. Imperfect information: Consumers do not have perfect information

about the products being sold, which means that firms can use
advertising to influence consumer behavior.

These assumptions help to explain how firms in monopolistic competition

compete with each other and how the market is likely to behave over
time.

42: Scope & importance of economics

Economics is the study of how societies allocate scarce resources to

meet their unlimited wants and needs. It is a social science that analyzes
how individuals, businesses, governments, and other organizations
make decisions about how to use resources to produce goods and
services.

The scope of economics is very broad and includes topics such as

microeconomics, macroeconomics, international economics, public
economics, labor economics, and environmental economics, among
others.

The importance of economics lies in its ability to help us understand and

analyze complex economic issues, such as inflation, unemployment,
economic growth, income inequality, and environmental degradation. By
studying economics, we can make informed decisions about our
personal finances, investments, and career choices. Economists also
play an important role in shaping public policy by providing advice and
analysis to governments and other organizations.

OR

Economics is a social science that helps us understand how societies,

businesses, and individuals allocate scarce resources to meet their
unlimited wants and needs. It is important because it helps us make
informed decisions about our personal finances, investments, and career
choices. It also helps us understand and analyze complex economic
issues, such as inflation, unemployment, and income inequality. By
studying economics, we can gain a better understanding of how the
economy works, which allows us to make more informed decisions and
to shape public policy.

43: Cost push inflation

Cost-push inflation refers to a situation where the overall price level of

goods and services rises due to an increase in production costs faced by
businesses. In simpler terms, when businesses experience higher costs,
they pass on those costs to consumers by increasing prices, leading to
inflation.
44: Increasing return to scale

Increasing returns to scale is a concept in economics that refers to the

situation where an increase in inputs leads to a more than proportional
increase in outputs. In other words, when a firm increases its inputs by a
certain percentage, its output increases by a larger percentage. This can
happen because of factors such as specialization, division of labor, and
economies of scale.

Increasing returns to scale can be beneficial for firms because it can

lead to lower costs, higher profits, and increased market share.
However, it can also lead to market domination by large firms, which can
be harmful to competition and innovation.

In the long run, increasing returns to scale can also lead to

agglomeration effects, where firms cluster together in certain locations to
take advantage of shared resources, such as skilled labor, infrastructure,
and knowledge spillovers. This can lead to the development of industry
clusters, such as Silicon Valley in California or the financial district in
New York City.

OR

Increasing returns to scale is a concept that describes a situation

where a company or organization experiences a greater increase in
output or productivity than the increase in inputs or resources used.
In simpler terms, when a business grows and expands its
operations, it can achieve a disproportionately larger increase in
output and efficiency.

45: Scarcity & Choice

Scarcity: Scarcity means that there are limited resources available to

fulfill unlimited wants and needs. It's like having only a few cookies when
everyone wants more. Resources such as time, money, land, and
materials are scarce because there isn't an endless supply of them. This
is why we need to make choices because we can't have everything we
want.
Choice: Choice is the act of picking or selecting one option over others.
Since resources are scarce, we must decide how to use them wisely.
When we make choices, we consider different alternatives and think
about the pros and cons of each. Choices involve making trade-offs,
which means giving up something in order to have something else. For
example, if you choose to buy a toy, you may need to give up buying a
different toy or saving money for something else.

OR

Scarcity is the economic concept that resources are limited, but human
wants and needs are unlimited. This means that people must make
choices about how to allocate their scarce resources, such as time,
money, and labor, to satisfy their needs and wants.

The concept of choice is closely related to scarcity, as people must make

choices about how to allocate their resources in order to maximize their
satisfaction or utility. For example, a person may choose to spend their
money on a new car instead of going on vacation, or they may choose to
work overtime to earn more money instead of spending time with their
family.

The choices that people make are influenced by a variety of factors,

including their preferences, income, and the prices of goods and
services. Economists study how people make choices and how these
choices affect the allocation of resources in the economy.

46: Factors shifting demand curve

Factors that can shift the demand curve in economics include changes in
income, prices of related goods, consumer preferences, population
demographics, and consumer expectations. When any of these factors
change, they can cause a shift in the demand curve, either to the right or
to the left, indicating an increase or decrease in demand at every price
level.
47: Inferior goods

Inferior goods are a type of economic good that people purchase less of
as their income increases. This is in contrast to normal goods, which
people purchase more of as their income increases.

Inferior goods are typically lower-quality goods that people buy because
they cannot afford better alternatives. As people's incomes increase,
they tend to switch to higher-quality goods that provide more satisfaction
or utility.

Examples of inferior goods include low-quality food products, such as

instant noodles or canned soup, as well as used cars or public
transportation. These goods are typically cheaper than their
higher-quality counterparts, but people buy them because they cannot
afford better options.

48: market equilibrium

Market equilibrium is the state where market supply and demand

balance each other and, as a result, prices become stable.

OR
Market equilibrium refers to a state of balance or stability in a market
where the quantity of a good or service demanded by buyers matches
the quantity supplied by sellers. In other words, it is the point at which
the intentions of buyers and sellers align, and there is no inherent
pressure for prices or quantities to change.

49: Law of Elasticity of demand

The law of elasticity of demand states that the demand for a product or
service varies with its price.

OR
The law of elasticity of demand is a principle in economics that explains
how responsive the quantity demanded of a product is to changes in its
price. In simpler terms, it measures how much the demand for a product
changes when its price changes.

50: Marginal product

Marginal product is the additional output produced by adding one more

unit of input to the production process, while holding all other inputs
constant.

OR

Marginal product refers to the additional output or production that is

generated by adding one more unit of input, while keeping all other
inputs constant. In simpler terms, it measures the increase in output
resulting from using an additional unit of a resource, such as labor or
capital, in the production process.

51: Balance of trade

Balance of trade is a measure of a country's international trade,

specifically the difference between the value of its imports and exports. If
a country exports more than it imports, it has a trade surplus, while if it
imports more than it exports, it has a trade deficit.

52: Demand pull inflation

Demand-pull inflation is a type of inflation that occurs when the demand

for goods and services in an economy increases faster than the
economy's ability to produce them.

53: Constant return to scale

Constant returns to scale is an economic concept that refers to the idea

that if all inputs into a production process are increased by the same
percentage, then output will also increase by that same percentage.
54: Factors shifting supply curve

Factors that can shift the supply curve include changes in production
costs, technological advancements, government policies, and natural
disasters. These factors can cause the supply curve to shift either to the
right or to the left, depending on whether they increase or decrease the
quantity of goods and services that suppliers are willing to produce at a
given price.

55: Economic profit

Economic profit is the profit earned by a business after considering all of

the costs of production, including both explicit and implicit costs. It is a
more accurate measure of a firm's profitability than accounting profit,
which only considers explicit costs.