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    Example and Directions
    Words (or words that have the same definition) The definition is case sensitive (Optional) Image to display with the definition [Not displayed in Glossary, only in pop-up on pages] (Optional) Caption for Image (Optional) External or Internal Link (Optional) Source for Definition
    (Eg. "Genetic, Hereditary, DNA ...") (Eg. "Relating to genes or heredity") The infamous double helix CC-BY-SA; Delmar Larsen
    Glossary Entries
    Word(s) Definition Image Caption Link Source
    Allocative efficiency Producing the right mix of output (i.e., producing what the consumer wants)       Module 4.2
    Average fixed cost Fixed cost divided by output.       Module 4.5
    Average total cost The total cost (i.e., sum of all the production costs) divided by the number of units produced.       Module 4.3
    Average variable cost Variable cost divided by output.       Module 4.5
    Barriers Obstacles on the way of potential new entrants entering the market and competing with the incumbents.       Module 6.5
    Concentration (market) Based on the distribution of market share in an industry, we differentiate between concentrated and fragmented industries. An industry with a few players with large market shares is considered a concentrated environment.       Module 7.3
    Conduct Behavior of the market participants (e.g., firms) in the market environment. Examples of conduct be anything from work dress code to the amount spent on research and development.       Module 5.2
    Consumer utility Consumer Utility: The satisfaction from the consumption of consumer goods or services.       Module 3.4
    Correlation A causal, complementary, parallel, or reciprocal relationship, correspondence between two comparable entities.       Module 3.2
    Deadweight loss A cost to society (e.g., loss of resources) created by market inefficiency, which occurs when supply and demand are out of equilibrium.       Module 2.7
    Diminishing marginal returns The marginal physical product of a variable input declines as more of it is employed with a given quantity of other (fixed) inputs.       Module 4.5
    Direct competitors Firms who produce very similar goods or services and compete directly for the same customers.       Module 7.2
    Dominant strategy A situation where one player has superior tactics over another player, regardless of how their opponent may play.       Module 8.1
    DRAM Dynamic random-access memory is a type of random-access memory that stores each bit of data in a separate capacitor within an integrated circuit.       Module 5.5
    Economies of scale The ability to lower average costs by producing more output.       Module 8.2
    Factors of production Resource inputs (such as labor, land, and physical capital) are used to produce goods and services.       Module 1.4
    Fixed cost Costs that do not change with the rate of output.       Module 4.5
    Free rider A person who benefits from something without expending effort or paying for it. In other words, free riders are those who utilize goods without paying for their use.       Module 8.7
    Futures contracts A standardized, transferable, exchange-traded contract that requires delivery of a commodity, bond, currency, or stock index, at a specified price, on a specified future date.       Module 8.1
    Great Recession of 2008 The economic downturn that begun in Dec 2007 and ended in August 2009* (the official end date has yet to be established) was second only to the Great Depression of the 1930s in terms of severity and duration. To set apart the 2008 recession from other recessions and the 1930’s depression, this recession has been given the unofficial name of the Great Recession.       Module 8.1
    Hacking Mainstream usage mostly refers to computer criminals. Hacking can include breaking into computers using programs written by others, with very little knowledge about the way they work.       Module 8.1
    Indirect competitors Firms who produce somewhat similar goods or services compete indirectly for some customers.       Module 7.2
    Just-in-time inventory An inventory system in which materials, parts, sub-assemblies, and support items are delivered just when needed and neither sooner nor later. Its objective is to eliminate product inventories from the supply chain.       Module 5.2
    Law of demand The quantity of a good demanded in each time period increases (decreases) as its price falls (rises), ceteris paribus.       Module 2.5
    Law of supply The quantity of a good supplied in each period increases (decreases) as its price rises (falls), ceteris paribus.       Module 2.6
    LCD Lesser Developed Country       Module 2.3
    Marginal cost The change in total cost when output is increased.       Module 4.3
    Market outcomes The results from the interaction of market participants. Unemployment rate, home sales, stock market levels are examples of market outcomes.       Module 8.1
    Market power The ability to alter the market price of a good or service.       Module 6.2
    Model A simplified version of real life used to analyze economic situations.       Module 2.3
    Nominal The value of anything expressed in current prices. Since inflation means that money can lose its value over time, nominal figures can distort when used to compare values in different periods. It is better to compare their real value by adjusting the nominal figures to remove the price distortions.       Module 1.4
    Normal good A good for which demand rises (falls) when income rises (falls).       Modules 2.4, 3.2
    Opportunity cost The most desired goods or services that are forgone to obtain something else.       Module 1.2
    Ordinal A method of analyzing utility, or satisfaction derived from the consumption of goods and services, based on a relative ranking of the goods and services consumed.       Module 3.4
    Patent A grant made by a government that confers upon the creator of an invention the sole right to make, use, and sell that invention for a set period.       Module 5.2
    Performance The measurement of a firm’s conduct. There are numerous firm performance measurements. Some of the more common measurements are profit, market share, stock price, return of investment, etc.       Module 5.2
    Phishing The criminally fraudulent process of attempting to acquire sensitive information such as usernames, passwords and credit card details by masquerading as a trustworthy entity in an electronic communication.       Module 8.1
    Productive efficiency Productive Efficiency: Producing the most output with the fewest inputs (e.g., labor, land, capital, etc.).       Module 4.2
    Profit (accounting) A firm’s total revenue subtracted from its explicit costs. Accounting profit does not account for the opportunity costs of the resources.       Module 5.3
    Profit (economic) The level of profit that is larger than the average level of profit (sometimes referred to as normal profit).       Module 5.3
    Real income The amount of goods and services you can buy today compared to the price of the same goods and services you could have purchased in another period.       Module 6.5
    Rival A good is said to be rivalrous or a rival if its consumption by one consumer prevents simultaneous consumption by other consumers, or if consumption by one party reduces the ability of another party to consume it.       Module 8.1
    SCP Model A dynamic model that explores the relationships among an industry's structure, conduct, and performance—and the effects of external shocks on all three.       Module 5.2
    Securitization The process of aggregating (i.e., grouping) similar instruments, such as loans or mortgages, into a negotiable security. Now, the originator of the loan (typically a bank) no longer bears the risk of default (the risk is now transferred to the purchaser of the securitized loan).       Module 8.1
    Slope A description of a line’s steepness, incline, or grade.       Module 4.5
    Social Demand Curve Represents the total benefits associated with the consumption of a good or service.       Module 8.5
    Spamming The abuse of electronic messaging systems (including most broadcast media, digital delivery systems) to send unsolicited bulk messages indiscriminately.       Module 8.1
    Supply Curve (private) Represents the resource costs incurred by the specific producer       Module 8.5
    Supply Curve (social) Represents the total costs of all the resources used in the production process.       Module 8.5
    Total cost The value of all the inputs and effort required to bring a good or service to market.       Module 4.3
    Variable cost Costs of production that change with output.       Module 4.4
    Variable cost Costs that do change with the rate of output.       Module 4.5
    Worker compensation All wages and benefits received by a worker. Benefits could include things like company sponsored health insurance.       Module 4.2
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