Definitions Essay, Research Paper

Utility: satisfaction derived from devouring a good. Net income: Net income = TR & # 8212 ; TC = Q ( AR-AC ) . Normal Net income: net income that the house could do by utilizing its resources in their following best usage ( chance cost ) Supernormal net income: net income above normal net income. Welfare maximization: Adaptive Expectations: where determinations are based upon past information. Rational Expectations: where determinations are based on current information and awaited hereafter events. Rational economic behaviour: Positive: scientific or nonsubjective survey of the allotment of resources Normative: survey and presentation of policy prescriptions affecting value opinions about the manner in which scarce resources are allocated. ( subjective attack to economic sciences ) Free Good: goods which are unlimited in supply and which hence have no chance cost. Economic Good: goods which are scarce because their usage has an chance cost. Scarcity: economic agents ( houses, authoritiess, & # 8230 ; ) can merely obtain a limited sum of resources at any minute in clip. Choice: economic picks involve the alternate utilizations of scarce resources Opportunity cost: economic cost of production, benefit lost from the following best alternate. Production possibility frontier: curve which shows the maximal possible degree of end product of one good given a degree of end product for all other goods in the economic system. Short Run: period of clip when at least one factor input can non be varied. Long Run: period of clip when all factor inputs can be varied, but the province of tech. remains changeless. Very Long Run: the period of clip when the province of engineering may alter. Factors of Production: Land: all natural resources Labor: workforce Capital: manufactured stock of tools, machines, mills, offices, roads and other resources used in the production of goods and services. Enterpreneurship: those who organize production, and take hazards. Market: occurs whenever purchasers and Sellerss are in contact with each other. Ceteris Paribus: & # 8216 ; all other things staying the same & # 8217 ; , the premise that all other variables within an economic theoretical account remain changeless whilst one alteration is being considered. Outwardnesss: Merit Good: good which is under-provided by the market mechanism. // has positive outwardnesss. Public Good: good where ingestion by one individual does non cut down the sum available for ingestion by another individual, ( non-excluding / non-rivalrous ) leads to the construct of the free rider. i.e. : defence, street lamps. Private Good: Goods which are excludable, emulous. Centrally Planned Economy: economic system where the authorities, through a planning procedure, allocates resources in society. Free Market Economy: economic system which resolves the basic economic job through the market mechanism. Normal Good: good where demand increases when income additions ( YED & gt ; 0 ) Inferior Good: good where demand falls when income additions ( YED & lt ; 0 ) Giffen Good: particular type of inferior good where demand increases when monetary value additions Veblen Good: ( snob goods ) goods bought in order to derive position, frequently sell better at high monetary values. Bad goods: a autumn in monetary value will deter people from purchasing ( sometimes ) b/c they are afraid of farther falls in monetary value. Substitution Consequence: if monetary value rises, demand will exchange to replace merchandises. Income Consequence: if monetary values rises, existent income will decrease, and demand will alter harmonizing to whether the good is normal or inferior. Law of Decreasing Tax returns: if increasing measures of a variable input are combined with a fixed input, finally the fringy merchandise and the mean merchandise of that variable input will worsen. Returns to scale: when the alteration of per centum end product is the same as the per centum alteration in input. Economies of Scale: a autumn in the long tally norm costs of production as end product rises. Internal: ensuing b/c of growing in the graduated table of production within a house. External: ensuing from a growing in the size of the industry in which a house operates. Types: Technical: mechanization, specialised equipment, increased dimensions. Fiscal: easier recognition, lower rate of involvement. Managerial: specialised sections. Selling: advertisement ( trade name name, sponsorship, & # 8230 ; ) , boxing. Risk-bearing: diversify. Monopolistic Competition: market construction where a big figure of little houses produces non-homogeneous merchandises and where there are no barriers to entry or go out. Oligopoly: market construction where there is a little figure of houses in the industry and where each house is mutualist with other houses. Monopoly: market construction where one house supplies all end product in the industry without confronting competition because of high barriers to entry to the industry. Natural Monopoly: where economic systems of graduated table are s

o big comparative to demand that the dominant manufacturer in the industry will ever bask lower costs of production than any other possible rival. Perfect Competition: market construction where there are many purchasers and Sellerss, where there is freedom of entry and issue to the market, perfect cognition, and where all houses produce a homogenous merchandise. Imperfect Competition: market construction where there are several houses in industry, each of which has some ability to command the monetary value they set for their merchandise. Horizontal Amalgamation: amalgamation between two houses in the same industry at the same phase of production. Vertical Amalgamation: amalgamation between two houses at different production phases in the same industry. Consumer Sovereignty: when resources are allocated harmonizing to the wants of consumers ( i.e. : in a absolutely free market ) Net income Maximization: MC = MR Maximum Revenue: MR = 0 Optimum Allotment: Productive Efficiency: production is at lowest cost ( MC = AC ) Allocative Efficiency: occurs when no 1 can be made better off by reassigning resources from one industry to another without doing person else worse off. ( Price = MC ) // this is the societal optimal Market failure: where resources are inefficiently allocated due to imperfectnesss in the working of the market mechanism. Outwardness: Negative: if net societal cost is greater than net private cost. Positive: if net societal benefit is greater than net private benefit. Internalizing: extinguishing the outwardness by conveying it back into the model of the market mechanism. ( i.e. : widening belongings rights ) Private cost and benefit: cost or benefit to an single economic unit such as a consumer or a house. Social cost and benefit: cost or benefit to society as a whole. Gross: Internet: Domestic Income: excludes the values of incomes generated by assets owned abroad and domestic assets owned by aliens. National Income: includes the above. Factor Cost: Market monetary values: Nominal: values unadjusted for the effects of rising prices / values at current monetary values Real: values adjusted for rising prices Macroeconomic Policy Objectives: Economic growing and development Full employment Price stableness External equilibrium GDP: step of national income before belongings income from abroad and depreciation have been accounted for. GDP ( factor cost ) : GDP ( market monetary values ) – Taxes ( indirect ) + Subsidies GNP: a step of national income including net belongings income from abroad but before depreciation. Multiplier: figure used to multiply a alteration in independent outgo, such as investing, to happen the concluding alteration in income / ratio of the concluding alteration in income to the initial alteration in independent outgo. Accelerator Theory ; theory that the degree of planned investing is related to past D

Yttrium. ( I=f ( D

Y ) ) Absolute advantage: when a state is able to bring forth a good more cheaply in absolute footings than another state. Comparative advantage: when a state is able to bring forth a good more cheaply comparative to other goods produced domestically than another state. Free Trade Areas: group of states between which there is free trade in goods and services but which allows member counties to put their ain degree of duties against non-member states. Customss brotherhoods: Common markets: group of states between which there is free trade in merchandises and factors of production, and which imposes a common external duty on imported goods from outside the market. Current History: pare of Balance of payments where payments for the purchase and sale of goods and services are recorded. Capital History: portion of the B.o.P. where flows of nest eggs, investing and currency are recorded. Long tally: Short tally: Current Balance: difference between entire exports and entire imports. Marshall-Lerner Condition: devaluation will ensue in an betterment on current history if the combined snaps of demand for exports and imports are greater than 1 ( more elastic & # 224 ;

better to devalue ) Footings of Trade: Economic Growth: Economic Development: Human Development Index ( HDI ) : compares states on the footing of existent GDP per capita at PPP, life anticipation, instruction ( literacy and school registration ) Human Suffering Index ( HSI ) : takes into history factors such as entree to clean H2O, equal nutrient, and instruction. Valuing Natural Resources: takes into history growing without the devastation of natural capita. Measure of Economic Welfare ( MEW ) : allows for leisure, non-marketed goods, public comfortss, every bit good as economic & # 8216 ; bads & # 8217 ; like pollution or & # 8216 ; regrettables & # 8217 ; like defence disbursement. Net Social Product ( NSP ) : adjusts for positive and negative outwardnesss to cipher societal benefits and societal costs, including pollution, divorce, offense and suicide rates.