Tony Cleaver Economics The Basics (Routledge 2004)

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.COLLATERAL Some recognised asset offered by the borrower tosecure a loan.COLLUSION The action, usually of a CARTEL, of conspiring againstconsumers to increase prices, revenues and profits.Such action isnormally illegal, unlike tacit collusion which refers to anunspoken, unwritten mutual understanding between oligopolistsnot to actively compete.COMMAND ECONOMY An economy where all decisions about what,how and for whom goods and services are to be produced arecommunicated to subordinates via command.COMMON AGRICULTURAL POLICY The European Union s costlysystem of supporting agriculture.COMPARATIVE ADVANTAGE Where a country may be inefficient inproducing a range of goods and services but has a relative costadvantage in specialising in the production of one, or a few,only.(Contrast with ABSOLUTE ADVANTAGE.)CONSUMER EQUILIBRIUM That pattern of purchases which maximisesa consumer s utility, given existing prices and incomes.CONSUMER SOVEREIGNTY How in an ideal market system, by thepattern of their purchases, consumers determine what, how andfor whom goods and services are to be produced.CONSUMPTION The sum of a nation s consumer spending on goodsand services.COST-BENEFIT ANALYSIS The comparison of all costs and benefits(including EXTERNALITIES) which determines whether or not agiven course of action should be recommended.COSTS OF PRODUCTION Costs internal to a firm incurred in thebusiness of production.Fixed costs do not change as outputchanges; unlike variable costs which do change.Fixed plus vari-able costs equal total costs.Total costs divided by the number ofunits produced equal average or unit costs.The increase in totalcosts brought about by the increase in production of one extraunit is defined as marginal cost.CRITICAL MINIMUM SIZE The smallest viable population of athreatened species.� 2004 Tony CleaverDEBT-EQUITY SWAPS The sale of shares in domestic industry to(typically foreign) investors in return for their agreement topay a given proportion of accompanying debt.DEFICIT Expenditure exceeding income.(Contrast SURPLUS.)DEFLATION 1.A period of falling prices and incomes.2.A processof adjusting records to remove the distorting effects of INFLA-TION over the period under study.DEMAND The quantity of a good or service consumers are willingto purchase at a given price.DEMAND-DEFICIENT UNEMPLOYMENT Resources that are unemployedbecause of a lack of AGGREGATE DEMAND.Sometimes known asKeynesian or cyclical unemployment.DEMAND MANAGEMENT The attempt by government to adjust acountry s level of AGGREGATE DEMAND by spending more whensuch demand is low and less when demand is high.DEPRECIATION 1.The reduction in the value of a capital asset due towear and tear in production.2.The fall in value of one currencyin exchange for others in international trade.(See DEVALUATION.)DERIVED DEMAND The DEMAND for any resource is derived from itsability to produce.DEVALUATION The reduction in the official value of a currency, aterm now indistinguishable from DEPRECIATION.DIMINISHING MARGINAL UTILITY The decreasing additional satisfac-tion one derives from consuming an extra item. The more youhave of something, the less you want more of it.DIMINISHING RETURNS, THE LAW OF This refers to how, when otherresources remain fixed, increasing the employment of just onefactor causes output to increase but in steadily diminishingamounts.(Contrast with returns to scale.)DISCOUNT RATE 1.The base INTEREST RATE offered by the CENTRALBANK.2.The rate used to calculate the present value of somefuture income.DISTRIBUTION EFFECTS The impact on the division of nationalincome between rich and poor.DIVIDENDS The return distributed out of PROFITS to a company sordinary shareholders not to be confused with interest, whichis paid to creditors whether a business makes a profit or not.ECOLOGICAL FOOTPRINT The environmental resources it takes tomaintain an individual in his/her current lifestyle.� 2004 Tony CleaverECONOMIC IMPERIALISM The economic influence exerted by richnations, or MULTINATIONAL CORPORATIONS, over poorer coun-tries consumption and/or production decisions.ECONOMIES AND DISECONOMIES OF SCALE See RETURNS TO SCALE [ Pobierz całość w formacie PDF ]

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