Economics Glossary

Glossary
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Here is a much more complete Economics Glossary or Dictionary.

Opportunity Cost

The value of the item(good or service) you give up or forgo upon choosing another.

Service

An activity performed to satisfy human wants, usually come in intangible forms.

Market

An institution that facilitates exchange among buyers and sellers.

Efficient Market

Market in which profit opportunity is eliminated almost instantaneously.

Economics

The study of how individual and societies choose to use the scarce resources that nature and previous generations have passed to them.

Microeconomics

The study of behaviors of individual decision makers such as you in a particular market such as that for refrigerator, and their interrelationships.

Macroeconomics

Dedicates itself into the overall behavior and performance of an entire economy.

Rational self-interest

Given a certain condition, individuals try to minimize the expected cost for a benefit or maximize the expected benefit with a cost.

Sunk costs

Costs that cannot be avoided for any nonzero units of products and that do not change regardless of the quantity of production.

Marginal cost

The cost that is relevant to the quantity produced and that do not occur with a zero production.

Positive economics

An assertion about economic reality that can be supported or rejected by reference to the facts.

Normative economics

Economics reflecting opinions and values, judging whether the outcomes are good or bad.

Model

A formal statement of a theory.

Variable

A measure that can change from time to time or from observation to observation.

Efficient economy

One that produces what people want and does so at the lowest possible cost.

Efficient change

One that at least potentially makes some people better off without making others worse off.

Economic growth

An increase in the total output of an economy. That is usually when the society acquires new resources or when society learns to produce more with existing resources, its total output increases.

Economic stability

The condition in which national output is steady or growing, with low inflation and full employment of resources.

Comparative advantage

Specialization and free trade will benefit all trading parties, even when some are "absolutely" more efficient producers than others.

Economic problem

The problem that how exactly do large, complex societies answer the three basic questions presented in section 2.2., that what will be produced, how will it be produced, and in turn who will get the product.

Economic system

An economy that is further determined by the resource ownership(who owns the resources and how owners are paid) and the extent to which the government attempts to coordinate the economic activities in that society.

Private sector

The economic sector consisting of private individuals including households, independently owned firms that exist to make a profit and non-profit organizations.

Public sector

Government and its agencies at all levels.

International sector

the part of the economy that deals with imports and exports.