MICROECONOMICS
What is the term for the additional revenue earned from selling one additional unit of a good?
Marginal revenue
What is the term for unemployment caused by a mismatch between workers' skills and available jobs?
Structural unemployment
What is the term for an asset's ability to be converted into cash quickly without significant loss of value?
Liquidity
What is a tax imposed on imported goods called?
Tariff
Who is widely regarded as the "father of modern economics"?
Adam Smith
What type of good has a positive income elasticity of demand greater than 1?
Luxury good
What curve illustrates the relationship between income inequality and the cumulative share of income received by the population?
Lorenz curve
What is the interest rate adjusted for inflation called?
Real interest rate
What is the deliberate reduction in the official value of a currency under a fixed exchange-rate system called?
Devaluation
Which economist is most closely associated with the concept of creative destruction?
Joseph Schumpeter
What is the name of the curve that shows combinations of two goods providing the same level of satisfaction to a consumer?
Indifference curve
What coefficient measures income or wealth inequality on a scale from 0 to 1?
Gini coefficient
What situation occurs when people prefer holding cash rather than bonds even when interest rates are extremely low?
Liquidity trap
What economic theory states that countries benefit by specialising according to their opportunity costs?
Comparative advantage
What curve shows the relationship between tax rates and total tax revenue?
Laffer curve
What type of good is one for which demand increases when its price increases, violating the usual law of demand?
Giffen good
What phenomenon occurs when increased government borrowing pushes up interest rates and reduces private investment?
Crowding out
What is the term for the risk that a borrower may take greater risks after obtaining a loan because someone else bears part of the consequences?
Moral hazard
What is the term for selling a product in a foreign market at a price below its normal value?
Dumping
What concept describes the idea that an individual's actions can impose costs on others without those costs being reflected in the market price?
Negative externality
What equilibrium concept describes a situation where no player can improve their outcome by unilaterally changing their strategy?
Nash equilibrium
What term describes the simultaneous occurrence of high inflation and high unemployment?
Stagflation
What problem occurs when one party in a transaction has more information than the other, potentially leading to poor-quality participants dominating the market?
Adverse selection
What condition states that a currency depreciation improves the trade balance only if the combined price elasticities of exports and imports exceed one?
Marshall–Lerner condition
What paradox states that if everyone attempts to save more during an economic downturn, aggregate demand and income may fall, potentially leaving total saving unchanged?
Paradox of thrift