ECONOMICS

DEFINATIONS

Capital Accumulation
Capital accumulationrefers to profits that a company
uses to increase itscapital base.
Capital accumulationinvolves acquiring more assets
that can be used to create more wealth or that will
appreciate in value.

Environmental kuznets curve

Theenvironmental Kuznets curveis a hypothesized
relationship betweenenvironmentalquality and
economic development: various indicators of
environmentaldegradation tend to get worse as
modern economic growth occurs until average income
reaches a certain point over the course of development.

Sustainable Development
Process of meetinghuman developmentgoals while
sustainingthe ability of natural systems to continue to
provide thenatural resourcesandecosystem services
upon which theeconomyandsocietydepends.
Practice of maintaining processes of productivity
indefinitelynatural or human madeby replacing
resources used with resources of equal or greater value
without degrading or endangering natural biotic
systems.

Sustainable Consumption
Sustainable consumptionis the use of products and
services that have a minimal impact on the
environment so future generations can meet their
needs.
Sustainable development as well as sustainable
consumption rely on certain premises such as
1) Wise use of resources, and minimisation of waste and
pollution
2) Use of renewable resources within their capacity for
renewal
3) Fuller product life-cycles.

Marginal law of utility

Thelawof diminishingmarginal utilityis alawof
economics stating that as a person increases consumption
of a product while keeping consumption of other products
constant, there is a decline in themarginal utilitythat
person derives from consuming each additional unit of
that product.
Utility : the total satisfaction received from consuming a
good or service. The economic utility of a good or service
is important to understand because it will directly
influence the demand, and therefore price, of that good or
service.

Law of Marginal return

Thelaw of diminishing
returnsstates that as one input
variable is increased, there is a point at
which themarginalincrease in output
begins to decrease, holding all other
inputs constant. At the point where
thelawsets in, the effectiveness of
each additional unit of input decreases.

Economies of scale
economies of scaleare the cost advantages that
enterprises obtain due to size, output, or scale of
operation, with cost per unit of output generally
decreasing with increasing scale as fixed costs are
spread out over more units of output.
Economiesof scale arise because of the inverse
relationship between the quantity produced and per-unit
fixed costs; i.e. the greater the quantity of a good
produced, the lower the per-unitfixed costbecause these
costs are spread out over a larger number of goods.

Economic growth
Economic growth means an increase in real national
income / national output.
Economic growth measures an increase inReal GDP
(real output). GDP is a measure of the national income /
national output and national expenditure. It basically
measures the total volume of goods and services
produced in an economy.
or
an increase in the amount of goods and services
produced per head of the population over a period of
time.

Factors affecting economics growth

Levels of infrastructure e.g. transport and communication
Levels of corruption, e.g what percentage of tax rates are
actually collected and spent on public services.
Educational standards and labour productivity. Basic levels of
literacy and education can determine productivity of workforce.
Levels of inward investment. For example, China has invested
in many African countries to help export raw materials, that its
economy needs.
Labour mobility. Is labour able to move from relatively
unproductive agriculture to more productive manufacturing.

Economic Development
Development is concerned with how people are actually affected. It
looks at their actual living standards and the freedom they have to
enjoy a good standard of living.
Economic development means an improvement in quality of life and
living standards, e.g. measures of literacy, life-expectancy and health
care.
Measures of economic development, such as the
Human development index (HDI)
The HDI combines:
Life Expectancy Index. Average life expectancy compared to a global
expected life expectancy..
Education Index
mean years of schooling
expected years of schooling

Income Index (GNI at PPP)

Ecological footprint
ecological footprintmeasure how much nature it
takes to support people.
It is an ecological accounting system. It contrasts how
much biologically productive area people use for their
consumption to how much biologically productive area
is available.
or
the impact of a person or community on the
environment, expressed as the amount of land required
to sustain their use of natural resources.

Ecological footprint
Impact of human activities measured in terms of the
area of biologically productive land and water required
to produce the goods consumed and to assimilate the
wastes generated.
If a country does not have enough ecological resources
within its own territory, then there is a local ecological
deficit and it is called an ecological debtor country.
Otherwise, it has an ecological remainder and it is called
an ecological creditor country.
Turning resources into waste faster than waste can be
turned back into resources puts us in global ecological
overshoot, depleting the very resources on which

FMCG
Fast-moving consumer goods (FMCG) or consumer
packaged goods (CPG) are products that are sold
quickly and at relatively low cost. Examples include nondurable goods such as soft drinks, toiletries, over-thecounter drugs, processed foods and many other
consumables.
Trade Deficit : amount by which the cost of a country
import exceeds the value of its exports.
Transnational consumer class : consumer using product
that are either made outside or by firm owned by other
country.

UNCHE And WCED

The United Nations Conference on the Human
Environment, having met at Stockholm from 5 to 16
June 1972,having considered the need for a common
outlook and for common principles to inspire and guide
the peoples of the world in the preservation and
enhancement of the human environment.
WCED : World Commission on Environment and
Development(WCED), the mission ofBrundtland
Commissionis to unite countries to pursue
sustainable developmenttogether.

Thomas Malthus
Malthuscame to prominence for his 1798 essay on
population growth. In it, he arguedthat population
multiplies geometrically and food arithmetically;
therefore, whenever the food supply increases,
population will rapidly grow to eliminate the abundance.
mankind had a propensity to utilizeabundancefor
population growth rather than for maintaining a high
standard of living
Dematerialization: using less material while achieving
some task.

Ecological Debt
Ecological debtis the level of resource consumption
and waste discharge by a population in excess of locally
sustainable natural production and assimilative
capacity. The term has been used since 1992 by some
environmental organizations from the Global south.
Ecological deficit/ reserve : The difference between
the biocapacity andEcologicalFootprint of a region or
country. Anecological deficitoccurs when the
Footprint of a population exceeds the biocapacity of the
area available to that population.

Kyoto protocal
TheKyoto Protocolis an international treaty, which
extends the 1992 United Nations Framework Convention
on Climate Change (UNFCCC) that commits State Parties
to reduce greenhouse gases emissions, based on the
premise that (a) global warming exists and (b) manmade CO2emissions have caused it.
Under theKyoto Protocol, industrialized nations
agreed to cut their greenhouse gas emissions to a
certain percentage below 1990 levels. The year 1990
was chosen as a baseline because that was the year
when the UN first launched negotiations on climate
change.

Carbon Emission Trading

A carbon trade is an exchange of credits between
nations designed to reduce emissions of carbon dioxide.
The carbon trade allows countries that have higher
carbon emissions to purchase the right to release more
carbon dioxide into the atmosphere from countries that
have lower carbon emissions.
The carbon trade originated with the 1997
Kyoto Protocoland is intended to reduce overall carbon
dioxide emissions to 5% below 1990 levels between
2008 and 2012.

Carbon Emission Trading

A carbon credit is a financial instrument that allows the holder,
usually an energy company, to emit one ton of carbon dioxide.
Creditsare awarded to countries or groups that have reduced
their greenhouse gases below their emission quota. Carbon
credits can be legally traded in the international market at their
currentmarket price.
A carbon dioxide taxis a taxon businesses and industries that
produce carbon dioxide through their operations. The tax is
designed to reduce the output of greenhouse gases and carbon
dioxide, a colorless and odorless incombustible gas, into the
atmosphere. The tax is imposed with the goal of environmental
protection.

Carbon Emission Trading

A transaction that transfers carbon credits between two
parties under the Kyoto Protocol. The buyer pays the seller
cash in exchange for carbon credits, thereby allowing the
purchaser to emit more carbon dioxide into the
atmosphere. The standards for this agreements are
outlined b
This agreement usually involves two countries; however, it
may occur between a country and a large corporation.
Buyers expect their carbon emissions to be above the level
allocated to them by the Kyoto Protocol, while the seller
expects to produce less. Often, the seller has implemented
new technology or is developing a new project that is
expected to lower its greenhouse gas emissions

Economies of scale
Economies of scalearise because of the inverse
relationship between the quantity produced and per-unit
fixed costs; i.e. the greater the quantity of a good
produced, the lower the per-unit fixed cost because
these costs are shared over a larger number of goods.