Glossary

adverse selection, hidden attributes: A hidden-attributes or adverse-selection problem occurs when some characteristic of a product or service being exchanged is not known to the other parties. For example, someone purchasing health insurance knows their own health status, but the insurance company does not. The lack of information affects the price at which the uninformed party is willing to buy or sell, and this can lead to an ‘adverse selection’ of goods in the market: for example, only the least healthy people wanting to buy health insurance.
artificially scarce: A good is artificially scarce if it is non-rival (can be supplied to more users at no additional cost) but some users are excluded from using it, either directly or because the price is greater than their willingness to pay. See also: excludable public good.
asset: An asset is something that is owned, and has value.
asymmetric information, asymmetry of information: Information that is relevant to the parties in an economic interaction, but is known by some but not by others. See also: adverse selection, moral hazard.
average cost: The total cost of producing the firm’s output divided by the total number of units of output produced.
bargaining power: The extent of a person or firm’s advantage in securing a larger share of the economic rents made possible by an interaction.
barriers to entry, entry barriers: The term barriers to entry refers to anything making it difficult for new firms to enter a market, such as intellectual property rights or economies of scale in production.
bond: A financial asset where the government (or a company) borrows for a set period of time and promises to make regular fixed payments to the lender (and to return the money when the period is at an end).
cartel: A group of firms that collude (work together) to set output and/or prices in order to raise their joint profits.
central planning: In a centrally-planned economy, decisions about what to produce and how are taken by the government, rather than by firms responding to market prices.
collateral: An asset that a borrower pledges to a lender as a security for a loan. If the borrower is not able to make the loan payments as promised, the lender becomes the owner of the asset.
common-pool resource: A resource that is rival or partially rival (more people using it reduces the benefits to others) but non-excludable within a community of users. All members of the community are able (and in some cases have a legal right) to use it, but outsiders can be excluded.
competition policy, antitrust policy: Government policies and laws to limit market power and prevent cartels, or to otherwise regulate the process of competition, are collectively known as competition policy or antiitrust policy.
competitive equilibrium: A market is in competitive equilibrium if the quantity supplied is equal to the quantity demanded at the prevailing price, and all buyers and sellers are price-takers, so that no-one can benefit from attempting to trade at a different price.
complete contract: A contract is complete if it a) covers all of the aspects of the exchange in which any party to the exchange has an interest, and b) is enforceable (by the courts) at close to zero cost to the parties.
concave, concave function: A function, $f(x)$, is said to be concave if its second derivative is negative for all values of x.
congestible public goods: If a public good becomes partially rival as more people use it, it may be described as a congestible public good.
consumer surplus: Each consumer who buys a good receives a surplus equal to their willingness to pay minus the price. The term ‘consumer surplus’ normally refers to the sum of these surpluses across all consumers.
consumption smoothing: Actions taken by an individual, family, or other group in order to sustain their customary level of consumption. Actions include borrowing or reducing savings to offset negative shocks, such as unemployment or illness; and increasing saving or reducing debt in response to positive shocks, such as promotion or inheritance.
contract: A legal document or understanding that specifies a set of actions that parties to the contract must undertake.
convex, convex function: A function, $f(x)$, is said to be convex if its second derivative is positive for all values of x.
cooperative firm, worker-owned cooperative: A cooperative is a business organization whose members together own the assets of the organization; they share the income resulting from their activities and jointly determine how the organization will be run. A worker-owned cooperative is a firm that is mostly or entirely owned by its workers, who hire and fire the managers.
copyright: Ownership rights over the use and distribution of an original work.
cost function: The relationship between a firm’s total costs and its quantity of output. The cost function C(Q) tells you the total cost of producing Q units of output (including the opportunity cost of capital).
costs of entry: Startup costs that are incurred when a seller enters a market or an industry. These would usually include the cost of acquiring and equipping new premises, research and development, the necessary patents, and initial costs of finding staff.
credit market constrained: A description of individuals who are limited in how much they can borrow or can borrow only on unfavourable terms. See also: credit market excluded.
credit market excluded: A description of individuals who are unable to borrow on any terms. See also: credit market constrained.
deadweight loss: A measure of the total loss of surplus (that is, potential gains from trade) relative to the maximum available in the market.
decreasing returns to scale, diseconomies of scale, decreasing returns: When production exhibits decreasing returns to scale, increasing all of the inputs to a production process by the same proportion increases output by a lower proportion. The shape of a firm’s long-run average cost curve depends both on returns to scale in production and the effect of scale on the prices it pays for its inputs. 参见：规模报酬递增、规模报酬不变。
demand curve: A demand curve shows the number of units of a good that buyers would wish to buy at any given price. Also known as: demand function.
depreciation (of an asset): The loss in value of a form of wealth that occurs either through use (wear and tear) or the passage of time (obsolescence).
differentiated product: A product produced by a single firm that has some unique characteristics compared to similar products of other firms.
diminishing marginal utility: If the value to the individual of an additional unit of some good declines the more that is consumed, holding constant the amount of other goods, we say that the good has diminishing marginal utility.
discount rate: A measure of someone’s impatience: how much the person values an additional unit of consumption now relative to an additional unit of consumption later. It is equal to the slope of the indifference curve for consumption now and consumption later, minus one. Also known as: subjective discount rate.
disequilibrium rent: The economic rent that arises when a market is not in equilibrium, for example when there is excess demand or excess supply in a market for some good or service. In contrast, rents that arise in equilibrium are called equilibrium rents.
dominant strategy: A strategy is dominant if it yields the highest pay-off for the player, no matter what strategies the other players choose.
earnings: Wages, salaries, and other income from labour.
economies of scope: Cost savings that occur when two or more products are produced jointly by a single firm, rather being produced in separate firms.
employment contract: A system in which producers are paid for the time they work for their employers.
employment rent: The economic rent a worker receives when the net value of their job exceeds the net value of their next best alternative (that is, being unemployed). See also: economic rent.
endowment: A person’s endowments are the things they have that enable them to receive income. They include physical wealth (for example: land, housing, machinery); financial wealth (for example: savings, stocks/shares, bonds); intellectual property (for example: patents, copyrights); knowledge, skills, abilities, and experience that affect labour income; citizenship and rights to work. They can include characteristics such as nationality, gender, race, and social class, if these affect their income.
enforceable contract: A contract is enforceable if it is legally binding. For a contract to be enforceable, a court must be able to establish whether the both parties complied with its terms.
equilibrium price: This term normally refers to the price at which supply and demand for a good are equalized, so that the market is in equilibrium (also known as the market-clearing price). But it could refer to the level of the price in the equilibrium of other economic models. See also: market-clearing price.
equity: Shares (stocks) in a business are known collectively as equity. The total value of the equity held by the shareholders is equal to the net worth of the business, and an individual shareholder’s equity in the business is the total value of the shares they own. The term equity is also used more generally for a share of ownership of any asset, and for the net worth of any household, business, or project. There is a second entirely different use of the term, meaning fairness, as in ‘an equitable division of the pie’. See also: net worth
excess demand: A situation in which the quantity of a good demanded is greater than the quantity supplied at the current price. See also: excess supply.
excess supply: A situation in which the quantity of a good supplied is greater than the quantity demanded at the current price. See also: excess demand.
excludable, excludability: A good is excludable if (at zero or low cost) a potential user may be denied access to the good. See also: non-rival.
excludable public good, club good: A good that is non-rival (can be supplied to more users at no additional cost) but excludable (it is possible to prevent people from using it) may be called an excludable public good, or a club good.
exogenous shock: An exogenous shock (for example a demand shock or a supply shock) is a change in one or more of the exogenous variables in a model—that is, variables that are othewise held constant by the modeller.
external benefit, positive externality, external economy: A positive external effect: that is, a positive effect of an economic decision on other people, that is not taken into account by the decision-maker. It may be described as an external benefit, a positive externality, or an external economy. See also: external effect.
external cost, negative externality, external diseconomy: A negative external effect: that is, a negative effect of an economic decision on other people, that is not taken into account by the decision-maker. It may be described as an external cost, or a negative externality, or an external diseconomy. See also: external effect.
firm-specific asset: An asset is something that is owned, and has value. It is firm-specific if it is only of value within a particular firm. Firm-specific assets include any knowledge or skills that are only valuable while a person remains employed in a particular firm. See also: relationship-specific asset.
fixed costs: Costs of production that do not vary with the number of units produced.
fixed investment, gross fixed capital formation: In the national accounts, fixed investment, also known as gross fixed capital formation, refers to investment by firms and government in new capital goods (equipment and buildings), plus spending on new residential buildings. See also: investment.
Gini coefficient: A measure of inequality of a quantity such as income or wealth, varying from a value of zero (if there is no inequality) to one (if a single individual receives all of it). It is the average difference in, say, income between every pair of individuals in the population relative to the mean income, multiplied by one-half. Other than for small populations, a close approximation to the Gini coefficient can be calculated from a Lorenz curve diagram. See also: Lorenz curve.
government bond: A financial asset where the government borrows for a set period of time and promises to make regular fixed payments to the lender (and to return the money when the period is at an end).
human capital: The stock of knowledge, skills, behavioural attributes, and personal characteristics that determine the labour productivity or labour earnings of an individual. Investment in human capital, through education, training, and socialization can increase the stock. Human capital is part of an individual’s endowment. See also: endowment.
impatience: A preference for consuming something sooner rather than later. Impatience may by situational (because the person has little now and will have more later); or intrinsic, in which case they would prefer to consume more now rather than the same amounts now and later.
incomplete contract: A contract that does not specify, in a way that can be enforced by a court, every aspect of the exchange that affects the interests of parties to the exchange (or of others).
inequality aversion: A preference for more equal outcomes and a dislike of outcomes in which some individuals (even if they include oneself) receive more than others.
interest rate, rate of interest: The price of bringing buying power forward in time, by borrowing. Interest is the additional amount that the borrower promises to repay. The rate of interest is the amount of interest to be repaid per period, as a proportion of the loan. See also: nominal interest rate, real interest rate.
intertemporal choice model: A model representing decision making concerning borrowing, lending, and investing as ways of moving purchasing power forward (to the present) or backward (to the future) in time.
inventories: Inventories are goods held by a firm prior to sale or use, including raw materials, and partially-finished or finished goods intended for sale.
inventory investment: Increases in the inventories held by firms are a form of investment, since they are assets that will bring a return to the firm at a later date. Decreases in inventories correspond to negative inventory investment (a reduction in assets). See also: investment, inventories.
investment: Investment is expenditure undertaken in order to generate a return in future: for example, buying financial assets that will generate income in future, or a house that will provide accommodation, or capital goods to be used by a firm to produce output. In the national accounts, investment expenditure refers more specifically to fixed investment (gross fixed capital formation) together with inventory investment. See also: fixed investment, inventory investment.
involuntary unemployment: A person is involuntarily unemployed if they are seeking work, and willing to accept a job at the going wage for people of their level of skill and experience, but unable to secure employment.
isoprofit curve: A curve that joins together the combinations of prices and quantities of a good that provide equal profits to a firm.
joint surplus: The sum of the economic rents of all involved in an economic interaction.
labour discipline problem, labour discipline model: Employers face a labour discipline problem when they need to give employees an incentive to ensure that they work hard and well. In the labour discipline model, they do this by setting wages that include an economic rent (employment rent), which will be lost if the job is terminated. See also: employment rent.
labour force: The number of people in the population of working age who are, or wish to be, in work outside the household. They are either employed (including self-employed) or unemployed.
labour market power: A firm has labour market power (sometimes called monopsony power) if it can reduce the wage it needs to pay its workers by lowering the number of workers that it employs. See also: monopsony power.
labour productivity, productivity of labour: A measure of the effectiveness of the labour input in a production process. Typically it is total output divided by the number of units of labour (e.g. hours, or workers) used to produce it, or in other words the average product of labour.
Law of One Price: The Law of One Price states that in equilibrium, identical goods or services will be traded at the same price by all buyers and sellers.
long run: The term does not refer to a specific length of time, but instead to what is held constant and what can vary within a model. The short run refers to what happens while some variables (such as prices, wages, or capital stock) are held constant (taken to be exogenous). The long run refers to what happens when these variables are allowed to vary and be determined by the model (they become endogenous). A long-run cost curve, for example, refers to costs when the firm can fully adjust all of the inputs including its capital goods.
Lorenz curve: A graphical representation of the inequality of some quantity such as income or wealth. Taking income as an example, individuals in the population are arranged in ascending order of income. First we calculate the total income of the population. Then for each level of income, we plot the percentage of total income held by people at this income level or lower, against the percentage of people at this income level or lower. The area between the Lorenz curve and the 45-degree line, expressed as a fraction of the total area below the 45-degree line, is a measure of inequality. Other than for small populations, it is a close approximation to the Gini coefficient. See also: Gini coefficient.
marginal cost: The increase in total cost when one additional unit of output is produced. It corresponds to the slope of the total cost function at each point.
marginal external benefit, MEB: The marginal external benefit (MEB) is the beneft of an additional unit of a good for someone other than the decision-maker (or the sum of these benefits if several others are affected). The marginal social benefit is the sum of the MEB and the marginal private benefit to the decision-maker: MSB = MEB + MPB.
marginal external cost, MEC: The marginal external cost (MEC) is the cost of an additional unit of output that is incurred by someone other than the producer (or the sum of these costs if several others are affected). The marginal social cost is the sum of the MEC and the marginal private cost to the producer: MSC = MEC + MPC.
marginal private benefit, MPB: The benefit for a producer or consumer of producing or consuming an additional unit of a good. It is called the marginal private benefit, or MPB, to emphasise that it doesn’t include any external benefits conferred on others. See also: marginal external benefit, marginal social benefit.
marginal private cost, MPC: The cost for the producer of producing an additional unit of output. It is called the marginal private cost, or MPC (rather than simply the marginal cost) when we want to emphasise that it doesn’t include any external costs that production imposes on others. See also: marginal external cost, marginal social cost.
marginal product: The marginal product of an input to production (for example, the marginal product of labour) is the additional amount of output produced in response to a 1-unit increase in the input.
marginal revenue: The change in revenue obtained by increasing the quantity sold by one unit.
marginal social benefit, MSB: The marginal social benefit (MSB) is the benefit of the production or consumption of an additional unit of a good, including both the benefit for the producer or consumer (marginal private benefit) and the benefits conferred on others. MSB = MPB + MEB.
marginal social cost, MSC: The marginal social cost (MSC) is the cost of producing an additional unit of output, including both the cost for the producer (marginal private cost) and the costs imposed on others (the MEC). MSC = MPC + MEC.
market clearing: A market clears when the amount of the good supplied is equal to the amount demanded.
market-clearing price: The price at which the amount of the good demanded is equal to the amount supplied. See also: equilibrium price.
market failure: If the allocation resulting from market interactions is not Pareto efficient, we describe the situation as a market failure. The term may be used loosely to refer to any interaction resulting in a Pareto-inefficient allocation, whether or not a specific market is concerned.
market power: A firm has market power if it can sell its product at a range of feasible prices, so that it can benefit by acting as a price-setter (rather than a price-taker).
market share: A firm’s proportion of the market in which its product is sold. It may be measured as its share of the total revenue in the market, or of the total quantity sold in the market.
matching market: A market for interactions between two distinct groups, in which the members have different characteristics from other members of their own group, and would benefit from matching with particular members of the other group. For example, firms and workers in the labour market, men and women in what is sometimes called the marriage market. Also known as a two-sided market.
merit good: A good or service that should be available to everyone on moral grounds, irrespective of their ability to pay.
minimum wage: A minimum level of pay laid down by law or regulation, for workers in general or of some specified type. The intention of a minimum wage is to guarantee living standards for the low-paid. Many countries, including the UK and the US, enforce this with legislation.
missing market: When there is no market within which a potentially beneficial exchange or trade could occur, because of asymmetric or non-verifiable information, we say that the market for the good is missing.
monopoly: A firm that is the only seller of a product without close substitutes. Also refers to a market with only one seller. See also: natural monopoly.
monopsony power: A firm has labour market power (sometimes called monopsony power) if it can reduce the wage it needs to pay its workers by lowering the number of workers that it employs. It is sometimes called monopsony power because it applies, in particular, to a firm that is the only employer in a particular labour market.
moral hazard, hidden actions: If there is a conflict of interest between a principal and an agent over the agent taking some action that cannot be observed or cannot be verified by a court, then the principal faces a problem of hidden actions; also known as moral hazard.
natural monopoly: A production process in which the average cost curve is sufficiently downward-sloping, even in the long run, that a single firm can supply the whole market at lower average cost than two firms, making it impossible to sustain competition.
network economies of scale: A firm experiences network economies of scale when an increase in the number of users of an output of the firm implies an increase in the value of the output to each of them, because they are connected to each other.
net worth: The net worth (or equivalently, wealth) of an individual, household, or organization is the difference between the total value of its assets and the total value of its liabilities.
nominal interest rate: An interest rate is nominal if it is not corrected for inflation. The rates quoted by high-street banks on loans and savings accounts are nominal interest rates. See also: interest rate, real interest rate.
non-excludable, non-excludability: A good is non-excludable if it is impossible to prevent anyone from having access to it.
non-rival, non-rivalry: A good is non-rival if, when it is made available to one person, it can be made available to everyone else at no additional cost. Non-rivalry is the primary characteristic of a public good.
non-verifiable information, unverifiable information: Information is verifiable if it can be verified by a court and hence used to enforce a contract.
normal profits: Normal profits are the returns on investment that the firm must pay to the shareholders to induce them to hold shares. The normal profit rate is equal to the opportunity cost of capital and is included in the firm’s costs. Any additional profit (revenue greater than costs) is called economic profit. A firm making normal profits is making zero economic profit.
no-shirking condition: The condition that must be satisfied by the wage to ensure that the worker’s pay-off from exerting the level of effort required by the employer is greater than or equal to the pay-off from shirking. See also: no-shirking wage
no-shirking wage: The wage that is just sufficient to motivate a worker to provide effort at the level specified by their employer. See also: no-shirking condition
open-access resource: A resource that is rival or partially rival (more people using it reduces the benefits to others) but non-excludable (it is impossible to exclude anyone from using it).
opportunity cost of capital: The opportunity cost of capital is the amount of income an investor could have received, per unit of investment spending, by investing elsewhere.
Pareto efficiency curve: The set of all allocations that are Pareto efficient. The Pareto efficiency curve is sometimes called the ‘contract curve’, even though it is not necessary for any contract to be involved. See also: Pareto efficiency.
patent: A right of exclusive ownership of an idea or invention, which lasts for a specified length of time. During this time, it effectively allows the owner to be a monopolist or exclusive user.
perfect competition: Perfect competition is the type of interaction between buyers and sellers that takes place in the equilibrium of a market when (i) there are many buyers and sellers of identical goods, and (ii) supply equals demand and all participants act as price-takers.
perfectly competitive: A market may be described as perfectly competitive if (i) there are many buyers and many sellers of identical goods, all acting independently, who are aware of prices and always choose the best price they can get, and (ii) the market is in competitive equilibrium, with supply equal to demand and all buyers and sellers acting as price-takers.
piece rate: Under a piece rate contract, a worker is paid a fixed amount for each unit (‘piece’) of the product made.
Pigouvian subsidy: A government subsidy on activities that generate positive external effects, so as to correct an inefficient outcome. See also: external effect, Pigouvian tax
Pigouvian tax: A tax levied on activities that generate negative external effects so as to correct an inefficient market outcome. See also: external effect, Pigouvian subsidy.
power: The ability to do (and get) the things one wants in opposition to the intentions of others.
price discrimination: A selling strategy in which different prices are set for different buyers or groups of buyers based on the buyers’ differing willingness to pay.
price elasticity of demand: The percentage change in demand that would occur in response to a 1% increase in price. We express this as a positive number. Demand is elastic if this is greater than 1, and inelastic if less than 1.
price markup: The price minus the marginal cost divided by the price. In other words, the profit margin as a proportion of the price. If the firm sets the price to maximize its profits, the markup is inversely proportional to the elasticity of demand for the good at that price.
price-taker: A buyer or seller acts as a price-taker if they cannot benefit from attempting to trade at any other price than the prevailing market price. A price-taker has no power to influence the market price, but can buy or sell as many items as they wish at that price.
principal–agent relationship, principal–agent problem: A principal–agent relationship or problem exists when one party (the principal) would like another party (the agent) to act in some way, or have some attribute, that is in the interest of the principal, and that cannot be enforced or guaranteed in a binding contract. See also: incomplete contract.
private good: A good that is rival (when one person consumes a unit of the good, that unit is not available to others) and excludable (people can be prevented from consuming it).
procedural judgement of fairness: An evaluation of an outcome based on how the allocation came about, and not on the characteristics of the outcome itself (for example, how unequal it is). See also: substantive judgement of fairness.
producer surplus: The producer of a good receives a surplus on each unit, equal to the price minus the marginal cost of producing it. The term ‘producer surplus’ normally refers to the sum of these surpluses across all units sold.
profit, economic profit: A firm’s profit is its revenue minus its total costs. We often refer to profit as ‘economic profit’ to emphasise that costs include the opportunity cost of capital (which is not included in ‘accounting profit’).
profit margin: The difference between the price of a product and its marginal production cost.
property rights: Legal protection of ownership, including the right to exclude others and to benefit from or sell the thing owned. Property rights may cover broadly-defined goods such as clean water, safety, or education, if these are protected by the legal system.
public good: A good that, if available to anyone, can be made available to everyone at no additional cost. This characteristic is called non-rivalry. Some economists define public goods more strictly as goods that are both non-rival and non-excludable (non-excludable means that it is impossible to prevent anyone from consuming them).
quasi-linear, quasi-linear function: A utility function is said to be quasi-linear if it depends linearly on the amount of one good, and non-linearly on another. The marginal rate of substitution between the two goods then depends only on the non-linear variable.
real interest rate: An interest rate corrected for expected inflation (that is, the nominal interest rate minus the expected rate of inflation). It represents how many goods in the future one gets for the goods not consumed now. See also: nominal interest rate, interest rate, rate of interest.
relationship-specific asset: An asset is something that is owned, and has value. It is relationship-specific if it is only of value within an economic relationship (e.g. a contract for one firm to supply another). Relationship-specific assets include any knowledge or skills that are only valuable while a person remains employed in a particular firm. See also: firm-specific asset.
rent ceiling: The maximum legal price a landlord can charge for a rent.
research and development: Expenditures by a private or public entity to create new methods of production, products, or other economically relevant new knowledge.
reservation indifference curve: A curve that indicates combinations of goods that are as highly valued as one’s reservation option.
reservation price: The lowest price at which someone is willing to sell a good.
reservation wage: The reservation wage is the lowest wage a worker is willing to accept to take up a new job. It is the wage available in the worker’s next best job option (the reservation option). For workers whose next best option is unemployment, the reservation wage takes into account the wages they expect to receive when they find a new job as well as any income received while unemployed.
residual claimant: The person who receives the income left over from a firm or other project after the payment of all contractual costs (for example, the cost of hiring workers and paying taxes).
risk aversion, risk-averse: A risk-averse person has a preference for certainty (for example, getting $100 for sure) over a risky outcome of the same average value (such as a 50-50 chance of getting $200 or nothing).
rival, partially rival: A good is rival if, when one person consumes a unit of the good, no-one else can consume that unit. It is partially rival if more people using the good reduces the benefits available to other users. See also: non-rival.
saving: When consumption expenditure is less than net income, saving takes place and wealth rises. See also: wealth.
search unemployment: Since workers differ from each other, and so do jobs, unemployed workers and firms with vacancies spend time searching for an employment match that suits them both. Unemployment caused by the search and matching process is called search unemployment.
separation of ownership and control: The attribute of some firms by which managers are a separate group from the owners.
shares, stocks: Shares (also known as stocks) are financial assets that can be bought and sold, giving their owners (the shareholders) shared ownership of the assets of a firm, and therefore a right to receive a corresponding share of the firm’s profit.
short run: The term does not refer to a specific length of time, but instead to what happens while some things (such as prices, wages, capital stock, technology, or institutions) are assumed to be held constant (they are assumed to be fixed, or exogenous). For example, the firm’s stock of capital goods may be fixed in the short run, but in the longer run the firm could vary it (by selling some, or buying more).
substantive judgement of fairness: An evaluation of an outcome based on the characteristics of the allocation itself, not how it was determined. See also: procedural judgement of fairness.
substitutes: Two goods (or services) are described as substitutes when consumers would readily replace one with the other if the prices were similar. If the price of one of the goods increased, consumers would be more likely to choose the other (so demand for it would increase).
supply curve: A supply curve shows the number of units of output that would be supplied to the market at any given price. The firm’s supply curve shows the units supplied by an individual firm, and the market (or industry) supply curve shows the total number of units supplied by all sellers in the market (or firms in the industry). Also known as: supply function.
tax incidence: The effect of a tax on the surplus of buyers, sellers, or both.
total costs: The sum of all the costs a firm incurs to produce its total output.
total revenue, revenue: A firm’s total revenue is the number of units sold times the price per unit.
transaction costs: Costs that impede the bargaining process or the agreement of a contract. They include costs of acquiring information about the good to be traded, and costs of enforcing a contract.
unemployment benefit: A government transfer that is paid to an unemployed person while they are unemployed (or for part of the unemployment period). Also known as unemployment insurance.
variable costs: Costs of production that vary with the number of units produced.
verifiable information: Information is verifiable if it can be verified by a court and hence used to enforce a contract.
wealth: The stock of things owned, or value of that stock. Wealth may generate income, or contribute to the owner’s wellbeing in some other way. It includes the market value of a home, car, any land, buildings, machinery, or other capital goods that a person may own, and any financial assets such as shares or bonds. To calculate wealth, debts are subtracted—for example, the mortgage owed to the bank. Debts owed to the person are added.
willingness to accept (WTA): An indicator of how much a person values a good, measured by the minimum amount of money they would accept in exchange for a unit of the good (that is, their reservation price). See also: willingness to pay
willingness to pay (WTP): An indicator of how much a person values a good, measured by the maximum amount they would pay to acquire a unit of the good. See also: willingness to accept.
互惠主义（reciprocity）: 一种偏好，倾向于对友善和乐于助人者表现出善意和帮助，而对不友善或不乐于助人者不表现善意和帮助。
企业（firm）: 一种经济组织形式，由资本品的私人所有者雇佣并管理劳动力从事商品和服务的生产活动，并将其产品投放市场以获取利润。
企业家（entrepreneur）: 指创造或率先采用新技术、新组织形式以及抓住其他机会的个人。
保留选项（reservation option）: 当个人在特定情形中进行选择时，保留选项是指其可获得的次优替代方案。 亦称：备用选项。参见：保留价格.
偏好（preference）: 个人对必须作出的选择或决策的每个可能结果的相对价值的描述。
公共品博弈（public good game）: 在公共品博弈中，个体参与者可以采取对自己来说代价高昂的行动，但这一行动将为所有参与者（包括他们自己）带来收益。
公平（fairness）: 根据个人正义观评估配置的方式。
其他条件不变（ceteris paribus）: 为简化分析，经济学家通常会暂时搁置那些被认为对于研究问题不太重要的因素。这一术语的字面意思是“其他条件相同”。在经济模型中，这意味着经济分析是在“保持其他条件不变”的前提下进行的。
内生（endogenous）: 内生是指“由模型内部生成”。在经济模型中，如果一个变量的数值由模型的运行机制所决定（而非由建模者直接设定），那么这个变量就是内生变量。 参见：外生。
凡勃伦效应（Veblen effect）: 指个人通过消费豪华住宅、名牌服饰或高端车辆等彰显社会地位的商品，对他人产生的负面影响。 另请参见：炫耀性消费。
凸偏好（convex preferences）: 如果某人的无差异曲线呈凸形，也就是说，当你沿着图中的无差异曲线向右移动时曲线趋于平坦，那么我们称此人具有凸偏好。这种典型形状之所以会出现，是因为当一个人拥有较多数量的某种商品（相较于其他商品）时，他们会愿意舍弃更多数量的该商品以换取一单位的另一种商品。这也就表现为他们的边际替代率沿着曲线降低。
创新租金（innovation rent）: 创新者通过引入新技术、新型组织形式或新式营销策略获得的、超过资本机会成本的超额利润。
创造性毁灭（creative destruction）: 约瑟夫·熊彼特将旧技术和未能适应新技术的企业因缺乏市场竞争力而被淘汰的过程称为“创造性毁灭”。在他看来，亏损企业的失败也是具有创造性的，因为这一过程释放出的劳动力和资本品可以被重新组合利用。
利他主义（altruism）: 利他主义是一种社会偏好：一个愿意承担成本而让他人受益的人被称为利他主义者。
利益冲突（conflict of interest）: 在经济互动中，如果一方想获得更多收益必然导致另一方收益减少，这种情况称为利益冲突。
制度（institutions）: 一套规范人与人以及人与生物圈之间社会互动的法律和非正式规则，有时也被称为“游戏规则”。
劳动分工（division of labour）: 指生产者在生产过程中分工合作，专注于从事不同任务。
劳动力市场（labour market）: 劳动力市场是雇主向可能同意在其指导下工作的个人提供工资的市场。经济学家认为，在这个市场中，雇主属于需求方，雇员则属于供给方。
劳动平均产量递减（diminishing average product of labour）: 指生产过程中随着劳动投入增加，单位劳动产出（平均产量）逐渐下降的特性。
劳动的性别分工（gender division of labour）: 男性和女性在有偿工作与无偿工作时长分配上存在的差异。
十分位数，十分位组（decile, decile groups）: 十分位数将一组观测样本分为十个数量相等的组别。将所有观测样本根据某个特定变量（例如收入）进行排序，第一个十分位组包含位于底部10%的观测样本（例如收入处于最底部10%的观测样本），第二个十分位组是次低的10%观测样本，第十个或最高的十分位组则是特定变量取值最高的10%观测样本。十分位数是用于划分不同组别的特定变量的临界值，例如第一个十分位数分隔了第一个十分位组和第二个十分位组，以此类推。
协调博弈（coordination game）: 一种存在两个纳什均衡的博弈，其中一个纳什均衡帕累托占优于另一个纳什均衡。 也称为：保证博弈。
博弈（game）: 一个策略互动的模型，描述了参与者、可行策略、行动顺序、参与者掌握的信息以及支付。 参见：博弈论。
博弈论（game theory）: 一门研究策略互动的数学分支。策略互动指每个参与者都知道自己的收益取决于所有人选择的行动。 参见：博弈。
占优策略均衡（dominant strategy equilibrium）: 占优策略均衡是指所有参与者的策略均为占优策略的纳什均衡。
发展型国家（developmental state）: 一种政府通过公共投资、对特定行业的补贴、教育以及其他公共政策在推动经济发展过程中发挥主导作用的国家。
受约束选择问题（constrained choice problem）: 在这类问题中，决策者需要在特定约束条件下选择一个或多个变量的值以实现某一目标（如利润最大化或效用最大化）。其中，约束条件决定了决策者的可行集（如需求曲线或预算约束）。
可行边界（feasible frontier）: 由一系列点构成的曲线或直线，表示在某种商品数量给定的情形下，另一种商品可以获得的最大数量。 参见：可行集。
可行集（feasible set）: 在决策者所面临的经济、物理或其他约束条件下，所有可供选择的商品或结果的组合。 参见：可行边界。
合作（cooperation）: 参与旨在产生共同利益的项目。
同时博弈（simultaneous game）: 所有参与者同时选择策略的博弈，例如囚徒困境。 参见：序贯博弈。
商品（good）: 经济学家有时会在更广泛的语境下使用这个术语，用它指代个体在意并希望拥有更多数量的任何事物。除了在市场上交易的商品外，它还涵盖（诸如）“自由支配时间”或“清洁空气”。
囚徒困境（prisoners’ dilemma）: 囚徒困境是一种博弈，它有一个占优策略均衡，但也存在另一种能为所有参与者带来更高支付的替代结果。因此，纳什均衡并不是帕累托有效的。
因果、因果关系、因果性（causal, causality, causation）: 如果我们能够证明一个变量的变化引起了另一个变量的变化，那么我们可以认为这两个变量之间具有因果关系。相关性仅仅是评估两个事物是否同时变化，而因果性则阐释了变量间相互关联的机制，因而是一个更为严格的概念。 另请参阅：自然实验、相关性。
固定比例技术（fixed-proportions technology）: 一种要求各投入要素以固定比例组合的技术。如需提高产量，所有投入要素须以相同比例增加，以维持彼此间的固定比例关系。
国内生产总值（gross domestic product，GDP）: 衡量给定时期内经济中商品和服务的总产出水平。这一指标将同一国家范围内所有企业、非营利组织和政府机构所生产的所有产出加总至一个单一数值，并且确保没有重复计算。家庭生产的产品如果经由市场出售，则该部分产出也将被计入GDP。GDP可以按月份、季度或年度进行测度。
均衡（equilibrium）: 均衡指的是一种可以自我维持的状态或模型结果：一旦达到这种结果，除非受到外部力量的干扰，否则不会发生变化。这里的“外部力量”指的是由模型之外因素所决定的事物。
外生（exogenous）: 外生是指“由模型外部决定”。在经济模型中，如果一个变量的数值由建模者设定，而不是由模型自身的运行机制决定，那么这个变量就是外生变量。 参见：内生。
外部效应，外部性（external effect，externality）: 外部效应发生在某人的决策对他人带来利益或成本，而这些利益或成本未被决策者考虑在内时。外部效应也称为外部性。
存量（stock）: 指在某一时点上测量的数量，例如企业的资本存量或大气中的二氧化碳含量。其数值大小与时间单位无关。 参见：流量。
工业革命（Industrial Revolution）: 始于18世纪英国的一波技术进步和组织变革浪潮，它将一个以农业和手工业为主的经济体转变成了一个商业和工业经济体。
市场（market）: 市场使人们能够通过互惠的方式（不同于赠与）直接交换商品和服务，这种交换是自愿进行并互惠互利的（不同于盗窃和税收），并且通常不涉及个人情感（不同于朋友、家人之间的转让）。
帕累托占优，帕累托占优的（Pareto dominate, Pareto dominant）: 如果根据帕累托标准配置A比配置B更好，也就是说，至少有一个人在配置A下比在配置B下严格地更好，并且没有人变得更差，那么A帕累托占优于B。 参见：帕累托标准。
帕累托改进（Pareto improvement）: 一种能够不使任何人受损而使至少一个人受益的改变。 参见：帕累托占优，帕累托标准。
帕累托有效，帕累托效率（Pareto efficient， Pareto efficiency）: 如果不存在替代的可行配置在不使任何人境况变坏的情况下，使至少一个人变得更好，那么这种配置是帕累托有效的。
帕累托标准（Pareto criterion）: 帕累托标准是一种比较两种配置A和B的方式。它指出，如果至少有一个人在配置A下比在配置B下严格更好（换句话说，会严格偏好A而非B），并且没有人变得更差，那么A就是对B的帕累托改进。也称为A帕累托占优于B。
平均产量（average product）: 生产要素的平均产量指的是总产量与该生产要素总投入量的比值。例如，工人的平均产量（也称为劳动生产率）是总产量除以参与生产的工人人数。
序贯博弈（sequential game）: 参与者并非同时选择策略，并且后选择的参与者可以看到其他参与者已经选定的策略的博弈。例如，最后通牒博弈。 参见：同时博弈。
技术（technology）: 这是对一个生产过程的描述，该过程利用一系列原材料和其他投入（包括人力和机器的劳动）来进行生产。
技术进步（technological progress）: 一种减少生产既定数量产出所需投入资源（如劳动力、机器、土地、能源和时间）的技术变革。
挤出，被挤出（crowding out，crowded out）: 这个术语有两种截然不同的用法。第一种是指当经济激励取代了人们的道德或社会动机时观察到的负面效应。在研究个体行为时，激励可能会对社会偏好产生挤出效应。第二种用法是指政府支出的增加在减少私人支出方面的效应，例如在生产能力满负荷运行的经济中预期会出现的情况，或者当财政扩张与利率上升相关联时。
搭便车者，搭便车行为，搭便车（free rider，free riding，free ride）: 某人从他人对某合作项目的贡献中获益，而自己却不作出贡献的行为，被称为搭便车，而称此人为搭便车者。
支付（pay-off）: 在博弈中，某个参与者的支付是指该参与者从所有参与者的联合行动确定的结果中获得的收益。
收入，可支配收入（income, disposable income）: 一个家庭或个人的可支配收入是指他们在不借款或使用储蓄的情况下，在纳税和从政府获得转移支付（如失业保险和养老金）后所能支出（“支配”）的最大值。这也是一个家庭或个人在一定时期内保持财富不变的最大消费金额。可支配收入是以一个时间段（如一年）来衡量的。
收入效应（income effect）: 指个人收入增加对其商品需求量（即个人选择购买的数量）产生的影响，这种影响源于收入增加扩大了商品购买的可行集。当某种商品的价格发生变化时，这种变化会通过扩大或缩小可行集产生收入效应，同时还会引起替代效应。 参见：替代效应。
政治制度（political system）: 政治制度决定了政府的选举方式，以及这些政府如何制定和执行影响着全体或大多数人口的决策。
效用（utility）: 衡量个体对某一结果的价值判断的数值指标。当两个结果均可行时，具有较高效用而不是较低效用的结果会被优先选择。
效用函数（utility function）: 效用函数是对个人在一种或多种商品上偏好程度的数学表示。它为每一种可能的商品组合赋予一个数值，用以代表个人从该组合中获得的效用。
无差异曲线（indifference curve）: 一条将所有提供给个体相同效用水平的商品组合连接起来的曲线。
替代效应（substitution effect）: 指当商品价格发生变化时，由于该商品相对价格变化所导致的消费量变化。价格变化还会通过扩大或收缩可行集产生收入效应。 参见：收入效应。
最优反应（best response）: 在博弈论中，参与者的最优反应是指给定其他参与者已采用的策略，能够给该参与者带来最偏好结果的策略。
最低可接受报价（minimum acceptable offer）: 在最后通牒博弈中，提议者提出的不会被回应者拒绝的最低报价。在更一般的谈判情境下，它是会被接受的最不利的报价。
最后通牒博弈（ultimatum game）: 在这个博弈中，第一个参与者向第二个参与者提出一个蛋糕分配方案，第二个参与者可以选择接受，那么双方按照第一个参与者提出的方案分得蛋糕；或者拒绝，那么双方都得不到任何东西。
机会成本（opportunity cost）: 指在选择某一行动方案时，所放弃的次优选择可能带来的收益。例如：“我决定去度假而不是接受一份暑期工作。那份工作既乏味无趣又薪资低廉，因此度假的机会成本相对较低。”
比较优势（comparative advantage）: 当某人或某国生产某特定商品的相对成本（相对于生产另一种商品的成本）低于其他生产者时，则其在该商品的生产上具有比较优势。 参见：绝对优势。
民主（democracy）: 一种在理想情况下赋予所有公民平等政治权力的政治制度，以言论自由、集会自由和新闻自由等个人权利为特征；同时，它还包括公平选举制度，几乎所有成年人都有资格参与投票，如果政府在选举中失败就会下台。
流量（flow）: 指按单位时间测量的数量，例如每周收入或年度碳排放量。 参见：存量。
消费（consumption）: 指用于购买消费品的支出。消费品既包括使用期限较短的商品和服务，也包括使用期限较长的商品，后者被称为耐用消费品。
消费品（consumer good）: 任何可供消费者购买的商品，包括使用期限较短的商品以及使用期限较长的商品（被称为耐用消费品）。
演化经济学（evolutionary economics）: 一个研究经济变迁过程的分支学科，研究内容包括技术创新、新社会规范的传播和新制度的形成等内容。
激励（incentive）: 一种影响不同行动方案收益与成本的经济奖励或惩罚。
炫耀性消费（conspicuous consumption）: 指个人通过购买商品和服务来公开展示自己的社会和经济地位。
生产函数（production function）: 生产函数以图形或数学形式描述了生产过程中投入要素数量与产出数量之间的关系。
生产要素（factors of production）: 任何用于生产过程的投入品都被称为生产要素。生产要素包括劳动、机器和设备（通常称为资本）、土地、能源和原材料等多种类型。
生存水平（subsistence level）: 当生活水平低于该水平时（基于消费或收入进行衡量），人口数量将开始下降。
相关性（correlation）: 数据样本中观察到的两个变量之间的统计关联。如果一个变量的数值增加（如人们的收入）常常伴随着另一个变量的数值增加（如受教育年限），我们称这两个变量之间存在正相关关系。如果一个变量的数值增加（如空气污染）伴随着另一个变量的数值降低（如预期寿命），我们称这两个变量之间存在负相关关系。即使两个变量之间存在相关关系，这也并不意味着它们之间存在因果关系，例如空气污染可能不是我们观察到的预期寿命降低的原因。 参见：因果关系.
相对价格（relative price）: 一种商品或服务的价格相对于另一种商品或服务的价格（通常表示为两种价格的比率）。
看不见的手博弈（invisible hand game）: 看不见的手博弈指存在一个唯一的纳什均衡且该均衡帕累托有效的博弈。 参见：纳什均衡，帕累托有效。
社会互动（social interactions）: 在这种情况下，每个人所采取的行动不仅影响自身结果，也会影响他人的结果。
社会偏好（social preferences）: 如果一个人的效用不仅取决于自己的支付，还取决于其他人的状况，那么这个人具有社会偏好。
社会困境（social dilemma）: 在社会困境中，个人为了追求私人目标而独立采取行动导致的结果，劣于人们共同行动时的可行结果。
社会规范（social norm）: 当个人的行为可能影响他人时，大多数社会成员对于在特定情境下人们应该做什么的共识。
私有财产（private property）: 若某物的所有者有权排除他人使用、有权从中获益，并有权将之与他人交换，该物即为私有财产。
稀缺性（scarcity）: 如果一种物品具有价值，并且获取更多数量该物品需要付出机会成本，我们就称这种物品是稀缺的。
等成本线（isocost line）: 一条由不同投入要素组合形成的直线，在该直线上各投入要素组合对应的生产成本都是相同的。
策略（strategy）: 在意识到自己和他人的结果取决于自己和他人选择的策略时，一个人可能选择的行动（或行动计划）。
策略互动（strategic interaction）: 一种社会互动，其中参与者知道自己的行动如何影响他人以及他人的行动如何影响自己。
纳什均衡（Nash equilibrium）: 纳什均衡是指在一个经济结果中，任何一方都无法通过单方面改变自己的行动来获得一个自己更偏好的结果。用更正式的表达方式来说，在博弈论中，纳什均衡被定义为博弈中每个参与者的策略组成的一组策略，其中每个参与者的策略都是对其他所有参与者所选策略的最优反应。 参见：博弈论。
经济人（homo economicus）: 经济人用来描述一种完全追求个人自身利益作出决策的经济行为者。
经济体系（economic system）: 一种具有独特基本制度的经济活动组织方式。过去和现在的经济体系包括中央计划经济（例如20世纪的苏联）、封建经济（例如中世纪早期的欧洲大部分地区）、奴隶经济（例如19世纪废除奴隶制前美国南部和加勒比地区的种植园经济），以及资本主义（当今世界上大多数经济体）。
经济学（economics）: 经济学研究人们在生产和谋生过程中如何与他人及自然环境互动，探讨这些互动方式如何随时间演变，并分析其在不同社会中呈现出的差异性。
经济成本（economic cost）: 指采取某一行动的直接成本（包括货币成本和努力成本等）加上机会成本。
经济租金（economic rent）: 经济租金是个人从所选行动中获得的净收益（货币或其他形式）与次优替代方案（或保留选项）的净收益之间的差额。 参见：保留选项.
绝对优势（absolute advantage）: 在使用相同数量投入要素生产某一特定商品的过程中，若某人或某国能比其他生产者产出更多该商品，则其在该商品的生产上具有绝对优势。
自然实验（natural experiment）: 一种实证研究方法，它利用两个群体（或两个经济体）由外部因素产生的条件差异（比如不同的法律、政策或气候）来开展研究。通过比较这两组群体的结果，可以得到这些条件对我们所关心结果的影响效应。这种方法的有效性建立在群体间条件差异由随机事件所引起这一基础上。例如，如果群体间政策差异是由其他可能影响结果的因素所产生的，那么自然实验的方法也就不再适用。
规模报酬不变（constant returns to scale）: 当生产活动呈现规模报酬不变的特征时，将生产过程中的所有投入要素按相同比例增加，产出也会按相同比例增加。企业的长期平均成本曲线形状既取决于生产过程中的规模报酬特征，也取决于规模变化对其投入要素价格的影响。 参见：规模报酬递增，规模报酬递减.
规模报酬递增、规模经济、报酬递增（increasing returns to scale， economies of scale， increasing returns）: 当生产过程呈现规模报酬递增的特征时，若按相同比例增加所有投入，产出将以更高的比例增加。企业长期平均成本曲线的形状既取决于生产过程中的规模报酬特征，也取决于规模变化对其投入要素价格的影响。 参见：规模报酬递减、规模报酬不变。
购买力平价（purchasing power parity，PPP）: 购买力平价是一种价格指数，衡量了相较于给定年份某一参照国的物价水平（如2011年美国的物价水平），在其他国家和年份购买同一篮子商品和服务的成本差异。
贸易利得，从交换中获得的收益（gains from trade, gains from exchange）: 交易各方相较于未交易情形时获得的收益。
资本主义（capitalism）: 一种以企业为主要经济组织形式的经济体系。在此体系下，资本品的私人所有者雇佣劳动力生产商品和服务，并在市场中出售以获取利润。资本主义经济体系中的主要经济制度包括私有财产、市场和企业。
资本品，资本（capital goods, capital）: 资本品（有时简称为“资本”）是指在生产过程中使用的耐用且昂贵的非劳动投入（例如机械、设备、建筑物）。然而，一些对使用者而言成本为零的基本投入（例如空气、水、知识）并不被计入资本品之列。
边际变化（marginal change）: 当两个变量$x$和$y$相关时，边际变化的影响是指随着$x$的微小增加，$y$所产生的相应变化。如果$y$是$x$的连续函数，那么$y$的边际变化就是$y$相对于$x$的变化率，即该函数的导数。
边际效用（marginal utility）: 指增加一单位商品的消费所带来的额外效用。
边际替代率（marginal rate of substitution，MRS）: 指一个人在两种商品之间愿意作出的权衡取舍。在无差异曲线上的任意一点，边际替代率（MRS）等于该点斜率的绝对值。 参见：边际转换率。
边际转换率（marginal rate of transformation，MRT）: 指为了获取额外一单位某种商品所必须放弃的另一种商品的数量。在任意一点上，它等于可行边界斜率的绝对值。 参见：边际替代率。
配置（allocation）: 在经济互动中，一个配置是指商品或其他有价值的物品在所有参与者间的特定分布。
预算约束（budget constraint）: 预算约束是一个等式，表示在恰好用尽全部预算情况下，个人能够获得的所有商品和服务组合。
鹰鸽博弈（hawk-dove game）: 一种协调博弈，其中参与者希望协调以与对手采取相反的行动。在纳什均衡（鹰，鸽）和（鸽，鹰）中，鹰的支付更高；但双方都选择鹰对双方来说都是最差的结果。