Try Magic Notes and save time.Try it free

Try Magic Notes and save timeCrush your year with the magic of personalized studying.Try it free

IB Economics Dictionary

Get a hint

Abnormal profit

Click the card to flip 👆

1 / 426

1 / 426

Terms in this set (426)

Abnormal profit

This arises when average revenue is greater than average cost (greater than the minimum return required by a firm to remain in a line of business).

Absolute advantage

A country has an absolute advantage in the production of a good if it can produce more of it with the same resources or, equivalently, if
it can produce the same amount using fewer resources compared to another country.

Absolute poverty

People living below the minimum income necessary to satisfy basic physical needs (food, clothing, and shelter); as of October 2015, the World Bank international poverty line is set at US $1.90 PPP per day.

Abuse of market power

When a firm acts with the intention to eliminate competitors or to prevent entry of new firms in a market.

Occurs when real output (real GDP) increases through time and is a result of greater or better use of existing resources. In the PPC model it can be illustrated by a movement from a point inside a PPC to another point in the northeast direction.