Pioneered by Ragnar Frisch, Lawrence Klein and Simon Kuznets, econometrics is the application of statistical models to economic data to develop both new theories and test existing hypotheses - a division which demarcates its two main branches: theoretical and applied. Its aim is the quantitative analysis of economic phenomena; giving empirical content to economic relationships. Or in other words, analysing economic history and making forecasts.

Economies of scale are the savings that occur when an entity grows in size and can produce output more efficiently or at lower cost. Here, the word “entity” can refer to individuals, organisations or even entire nations.

An Edgeworth box (named after Irish philosopher and economist Francis Ysidro Edgeworth, 1881) is a two-dimensional representation of a simple, closed economy consisting of two individuals and two items (or resources) that are finite in supply. Any feasible allocation of the items between the individuals is included as a dot in the box; the individuals’ preferences over the items are represented through indifference curves.

Elasticity refers, in its most basic form, to how much an individual, a business, a producer or a consumer changes its demand, or amount of goods supplied, as a result of price and income fluctuation. It is a core economic concept and provides answers to some central questions, such as how much more or less a product will sell if the price is raised or lowered or how much these price changes will affect the sales of other products.