Dictionary - Accounting Profit

Definition A company's total revenue minus its total explicit costs. Example Assume a carpenter produces 1'000 chairs, which he then...

Dictionary - Adverse Selection

Definition A situation where asymmetric information (between buyers and sellers) causes unwanted results, because the unobserved attributes ...

Dictionary - Business Cycle

Definition Often irregular and mostly unpredictable fluctuations (i.e. expansions or recessions) in economic activity experienced in an econ...

Dictionary - Positive Consumption Externality

Definition The positive effects on unrelated third parties that originate during the consumption of a good or service. Example A possible ex...

Dictionary - Negative Consumption Externality

Definition The negative effects on unrelated third parties that originate during the consumption a good or service. Example An example of a ...

Dictionary - Deadweight Loss

Definition The decrease in overall social welfare in an economy that results from a market distortion. A deadweight loss occurs whenever the...

Dictionary - Economic Growth

Definition The increase in the amount of goods and services that are produced in an economy over a certain period of time. Economic growth c...

Dictionary - Fixed Costs

Definition Costs that are constant irrespective of the quantity of output produced. Fixed costs have to be paid even if production is zero. ...

Dictionary - Gross Domestic Product (GDP)

Definition The monetary value of all final goods and services produced within a country over a certain period of time (most commonly a year)...

Dictionary - Human Capital

Definition The skills, talent, and knowledge that the employees of a company possess, measured in terms of economic value to the employer. E...

Dictionary - Inflation

Definition The rate at which the overall price level in an economy increases. Inflation causes a decrease in the purchasing power of money. ...

Dictionary - J Curve

Definition A graphic representation of the initial increase in a country's trade deficit after a deprecation of its currency.  Example A...

Dictionary - K-Percent Rule

Definition A monetary theory (postulated by Milton Friedman) that states that in order to control inflation in the long run, central banks s...

Dictionary - Liquidity

Definition The degree to which an asset can be converted into the common medium of exchange of an economy without affecting its valuation. E...

Dictionary - Macroeconomics

Definition The study of the economy on an aggregate level. Macroeconomics looks at economy-wide phenomena and the economy as a whole. Exam...

Dictionary - Microeconomics

Definition The study of small economic units (households, firms, specific markets, etc.), their decision-making, and their interactions in t...

Dictionary - Monopoly

Definition A Monopoly is a market situation where a sinlgle firm (or individual) is the sole producer and seller of a product or service for...

Dictionary - Natural Monopoly

Definition A market situation where a single firm (or individual) is the sole producer and seller of a good or service for an entire market,...

Dictionary - Opportunity Cost

Definition The  value of the next best alternative that has been given up in order to get something . T he foregone benefits one could have ...

Dictionary - Negative Production Externality

Definition The negative effects of economic activities that originate during the production process  on unrelated third parties . Example Th...