ECON010: Glossary

This page defines significant terms used in the lessons, and which lesson they first appeared in. As the list will be generated as each lesson is written (as opposed to a completed list before the class begins) it may take a few days for updates to process. I would like to keep it in alphabetical order, but until finished it may fall into disrepair. If you can’t find a term you think should be here, make sure to check the whole list as there may be newer entries at the bottom that are not properly sorted.

BadsItems people are willing to pay to have less of (or none) like pollution. Lesson 01

Capital — Resource consisting of created products used in the production of (other) goods and services. Includes factories, machines, tools, and parts. Lesson 01

Chart — A graphical tool to show how something changes in relation to another. Also called a Graph. Lesson 02

Ceteris Paribus (abbreviation in course “CP”) — “[All] other things being equal”.  Critical concept that permits examining how a transaction might change when one input is modified. It restricts all other elements from changing so that the effect on the results are only from the element examined.  Lesson 02

Dependent Variable — The element of a chart on the vertical axis that changes when the Independent Variable changes. Lesson 02

Durable GoodsItems with a expected life of one year or longer Lesson 01

EconomicsThe study of making choices when faced with limited resources. Lesson 01

Entrepreneurial AbilityResource of intangible skill allowing a person to recognize a profitable opportunity using resources to generate goods and services, the willingness to generate the same, and the willingness to take the risks incurred. Lesson 01

Graph — A graphical tool to show how something changes in relation to another. Also called a Chart. Lesson 02

GoodsTangible items that are scarce. Lesson 01

Income Source of “money” from the use of resources. Examples are rent, wages, interest, and profit. Lesson 01

Independent Variable — The element of a chart on the horizontal axis that is used to provide input that changes the Dependent Variable. Lesson 02

LaborResource consisting of the time, physical, and intellectual services of people. Includes ability, education, training, and talent. Lesson 01

LandResource consisting of natural resources (oil, water, oil) and physical property (Earth). Lesson 01

Macroeconomics — The study of resource allocation and choices of an economy as a whole. Lesson 02

MarginConcept of the last item obtained or the next one to obtain. Lesson 01

Maximum — The highest point on a line graph. A Local Maximum may not be the overall highest value, but IS the largest in a specific area. Think: top of a hill. Lesson 02

Microeconomics — The study of resource allocation and choices of an economy by an individual unit. Lesson 02

Minimum — The lowest point on a line graph. A Local Minimum may not be the overall lowest value, but IS the smallest  in a specific area. Think:bottom of a valley. Lesson 02

Model — A smaller or simpler representation of a system created to simplify analysis. Lesson 02

Non-Durable GoodsItems with an expected life less than one year Lesson 01

Normative EconomicsAnalysis using the point of view of what “should be.”  Lesson 02

Positive Economics — Analysis using the point of view of what “actually is.”  Lesson 02

RationalTaking actions to maximize satisfaction (or utility) for the choice maker.  Lesson 01

ResourcesTangible and intangible things exchanged to create goods and services. Consists of Land, Labor, Capital, and Entrepreneurial Ability. Lesson 01

ScarcityThe concept that there are not enough of a good or service to provide everyone that wants it for free. Lesson 01

ServicesWork performed that does not result in the production of a good. Lesson 01

Slope — The relationship of how much and which way the Dependent Variable changes with a change in the Dependent Variable. Lesson 02

Theory — “A simplified, logical story based on postitve analysis used to explain an event.” Lesson 02

Unlimited WantsThe sum total of all wants of all entities in a system. Is (essentially) infinite and unable to be fulfilled.  Lesson 01

UtilityAn arbitrary unit of measure used to quantify how much a choice satisfies the deciding entity. Lesson 01

Phred

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One thought on “ECON010: Glossary

  1. Pingback: ECON010 Lesson 02: More Definitions | Phred the Elder

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