Economics
Glossary
Advertising: To announce or praise (a
product, service, etc.) in some public medium of communication
in order
to induce people to buy or use it.
Appreciation: An
increase in the value of an asset.
Assets: Items of ownership
convertible into cash; total resources of a person or
business.
Average cost: The amount spent on producing
each unit of output. The average cost is calculated by
dividing
the
total cost by the output.
Balance of trade: The
difference between the value of exports and imports.
Calculated as the value
of exports minus the
value of imports.
Balanced budget: The situation
where income matches expenditure.
Barriers: This generally
refers to factors inhibiting the free movement of resources
to trade, e.g. restrictive
laws
relating to the movement of goods, capital and
labor between countries or regions.
Barter: The
direct exchange of goods and services without the use
of money.
Capital: Human-made goods that are used
to produce other goods.
Chain of distribution: The link
between raw material suppliers, manufacturers, wholesalers
and retailers.
Chain of production: The different
stages of making, distributing and selling a good
or
service.
Competition: Efforts among companies
to win more business.
Competition-based pricing: When
prices are determined by what your competitors
are doing
or plan to
do.
Consumer: One who buys and/or uses
goods and services.
Consumer goods: Items used by households.
Consumer loyalty: Attachment
by consumers to particular goods and services.
Copyright: The sole legal right to sell a good, usually literary,
musical or
artistic work.
Cost of production: Total costs. Costs are made up of fixed costs
and variable
costs
including land,
labor and capital
resources.
Demand: The amount
of a good or service that buyers are
willing and able
to purchase at
various prices
in a given
time period.
Demographics: The study of trends in population.
Deregulation: The removal
of controls on a particular
market
aimed at
improving the economic
efficiency
of that market.
Division
of labor: The separation of the total
work required
to produce a good or
service
into individual
interrelated
tasks, so that each worker
can become more skilled
at a particular
job.
The
use of
a division of
labor results
in increased efficiency
and productivity.
Economic
growth: Typically, an increase in a country’s
output of goods and
services.
Embargo: A ban placed on the export or
import of
a certain
good or
on trade with a particular
country
or countries.
Entrepreneur: A person who organizes and manages
any
enterprise, especially
a business,
usually
with considerable
initiative
and risk.
Equity: The monetary value of a property
or business
beyond any
amounts owed
on it in mortgages,
claims,
liens, etc.,
or shares of stock
in a company.
Excess
demand: Consumers want
to buy more
than producers
are prepared
to
sell at
a certain
price.
Excess
supply: Producers are
prepared to
sell more than
consumers are
willing to
buy at a
certain price.
Exports: Goods, services and
capital assets
sold to other
countries.
Factor
costs: The value
of output
measured
in
terms of
the cost
of the
factors of production
used to
produce
it.
Factors
of production: The factors
of production
are
the resources
used to
produce
goods
and services.
(Memory
aid: C-E-L-L:
Capital,
Entrepreneur,
Land and
Labor)
-
Capital — Human-made
goods that are used to produce
other goods.
-
Entrepreneur — A
person who organizes and manages any enterprise,
especially
a business,
usually
with considerable
initiative and risk.
-
Land — All
natural resources
(minerals and
other raw
materials).
-
Labor — All
human resources;
workers.
Free
enterprise
system: People
can own
and
run their
own business.
Free
trade: Trade
or commerce
carried
on
without
such
restrictions
as import
duties,
export
bounties,
domestic
production
subsidies,
trade
quotas
or import
licenses.
Globalization: The trend
of money
and
businesses
to move
beyond
their
own markets
to other
markets
around
the globe.
Goods: Objects
that
are capable
of satisfying
human
wants.
Human
capital: The accumulated
skill,
knowledge
and expertise
of
workers.
Imports: Goods,
services
and
capital
assets
purchased
from
other
countries.
Income: Payments
received
by households,
businesses
and
governments
in a
given
time
period
that
may be
spent
or
saved.
Inflation: An
upward movement
in
the general
level
of
prices that
results
in
a reduction
in
the amount
of
goods and
services
that
can
be
purchased with
a given
amount
of money.
Interdependent: Each
country
needs
the other
countries
to meet
the needs
and
wants
of
its people.
Interest: A charge
for
a loan
that
is usually
a percentage
of the
amount
loaned,
or the
amount
paid
to
an individual
or business
for money
deposited
in a
bank.
Labor
Force: Those
who are
employed
or are
available
for work.
Land: All natural
resources
(minerals
and other
raw materials).
Manufacturing: Making
large
amounts
of
goods.
Market: Exchange
of goods,
services
and
resources
between
buyers
and sellers.
Market
economy: An economic
system
that
has the
following
characteristics:
private
ownership
of goods
and the
factors
of
production,
freedom
of
individuals
to make
economic
choices,
the
use of
prices
to allocate
resources
and a
limited
economic
role
for
government.
Mercantilism: The theory
and system
of political
economy
prevailing
in Europe
after
the decline
of feudalism,
based
on
national
policies
of
accumulating
bullion,
establishing
colonies
and a
merchant
marine,
and developing
industry
and mining
to attain
a
favorable
balance
of
trade.
Open
economy: An
economy that
engages
in
international trade.
Opportunity
cost: The second-best
choice
when
you
make
a decision;
what
you
could
have
gotten
if
you made
a different
choice.
Output: The goods
and
services
produced
as
a result
of economic
activity.
Ownership: The people
or institutions
that
legally
possess
an item.
Prices: The
amount of
money
for
which goods
and
services are
bought
and sold. Producer: The makers
of goods
using
factors
of production.
Production: The output
of goods
and services.
Profits: The total
revenue
received
by a
business
firm
minus
its total
cost
of production.
Property rights: The
conditions of ownership,
including
the rights
and restrictions
regarding
use,
ownership
and sale.
Revenue: The money
received
from
the sale
of
output.
Resources: Inputs
used
in the
production
of
goods
and
services.
Sales: The amount
of
goods
sold
in a
given
period
of time.
Satisfaction: Pleasure
derived
from
consuming
a good.
Savings: That
part
of disposable
income
not
spent
on
goods
and services.
Scarcity: The concept
of
many
individuals
desiring
something
of limited
availability.
Scarcity
implies
that
not all
of
society’s
goals
can be
attained
at the
same
time,
so trade-offs
of one
good
against
others
(opportunity
cost)
are made.
Specialization: Producing
only
a few
products
instead
of
many
different
products.
Stocks: Raw
materials,
work
in
progress
and
unsold
consumer
goods,
or
shares
in
a
company that
are
available
for
sale.
Stock
Exchange (Stock
Market): A
market for
the sale
and purchase
of second-hand
shares and
securities.
Supply: The amount
of an
item produced
for sale.
Tariffs: Taxes generally
on goods
imported or
exported.
Unit
cost: Total
cost divided
by output.
Variables: Economic items
that change
and take
different values.
Wages: A payment
for labor.
Wealth: A stock
of all
those assets
capable of
earning an
income. Wealth
can be
human or
material.
Work: The use
of mental
or physical
effort to
produce a
good or
service.
World
Bank: The
bank aims
to encourage
capital investment
for reconstruction
and development
in member
countries.
World
Trade Organization
(WTO): The
only international
organization dealing
with the
global rules
of trade
between nations.
Its main
function is
to ensure
that trade
flows as
smoothly, predictably
and freely as possible. |
