1.
"Ceteris paribus": "other things constant" is used when the effect of one change is being described, recognizing that if other things changed, they also could affect the result. Economists often describe the effects of one change, knowing that in the real world, other things might change and also exert an effect.
2.
Capital: Human-made resources (such as tools, equipment and structures) used to produce goods and services. They enhance our ability to produce in the future.
3.
Choice: The act of selecting among alternatives.
4.
Fallacy of composition: erroneous view that what is true for the individual will always be true for the group.
5.
Macroeconomics: The branch of economics that focuses on how human behavior affects outcomes in highly aggregated markets, such as the markets for labor or consumer products.
6.
Marginal: Term used to describe the effects of a change in the current situation. For example, a producer's marginal cost is the cost of producing an additional unit of a product, given the producer's current facility and production rate.
7.
Microeconomics: The branch of economics that focuses on how human behavior affects the conduct of affairs within narrowly defined units, such as individual households or business firms.
8.
Middleman: A person who buys and sells goods or services or arranges trades. A middleman reduces transaction costs.
9.
Normative economics: Judgements about what ought to be in economic matters. They are views that cannot be proven false because they are based on value judgments.
10.
Objective: a fact based on observable phenomena that is not influenced by differences in personal opinion.
11.
Positive economics: The scientific study of "what is" among economic relationships.
12.
Private-property rights: Property rights that are exclusively held by an owner and protected against invasion by others. Private property can be transferred, sold, or mortgaged at the owner's discretion.
13.
Property rights: The rights to use, control, and obtain the benefits from a good or service.
14.
Rationing: Allocating a limited supply of a good or resource among people who would like to have more of it. When price performs the rationing function, the good or resource is allocated to those willing to give up the most "other things" in order to get it.
15.
Resource: An input used to produce economic goods. Land, labor, skills, natural resources, and capital are examples. Throughout history, people have struggled to transform available, but limited, resources into things they would like to have-economic goods.
16.
Scarcity: Fundamental concept of economics that indicates that there is less of a good freely available from nature than people would like.
17.
Scientific thinking: Developing a theory from basic principles and testing it against events in the real world. Good theories are consistent with and help explain real world events. Theories that are inconsistent with the real world are invalid and must be rejected.
18.
Secondary effects: The indirect impact of an event or policy that may not be easily and immediately observable. In the area of policy, these effects are often both unintended and overlooked.
19.
Subjective: An opinion based on personal preferences and value judgments.
20.
Transaction costs: The time, effort, and other resources needed to search out, negotiate and complete an exchange.
21.
Utility: The subjective benefit or satisfaction a person expects from a choice or course of action.
