Read definitions first, follow the mechanism, then use the diagram and judgement. The rapid recap gives the essential relationship; the reference indexes locate the fuller explanation.
At the margin: The effect of one additional unit, rather than the effect on the total.
Ceteris paribus: Other relevant influences are held constant while one relationship is examined.
Incentive: A change in expected costs or benefits that can influence a decision.
Allocation: How scarce resources are distributed between uses.
Real and nominal: Nominal values use current prices; real values adjust for price changes.
Private and social: Private effects fall on the decision-maker; social effects also include external effects on others.
Efficiency and equity: Efficiency concerns resource use; equity concerns fairness. An efficient outcome need not be judged fair.
Counterfactual: The outcome used for comparison: what would happen without the change, or under a feasible alternative.
How to use an economic claim
Identity: true by definition, such as TR = P × Q. It organises quantities but does not explain what caused them to change.
Model prediction: follows from stated assumptions. Identify the market structure, time horizon and what is held constant.
Contextual judgement: apply the mechanism to evidence, explain a condition that changes its strength, then reach a conclusion tied to the question.