Glossary of economic terms
Page 176 Glossary of economic terms ceteris paribus a condition which is often established in economics that requires the elimination of the influence of any variable—except for the one under study—from the results obtained. comparative advantage (principle of) in accordance with this principle, a person specializes in the production of those goods and services that he or she can make or provide at a relatively lower cost. consumer goods products which reach domestic consumers and provide utility. demand function mathematical relationship between the demand for a commodity and its price, the prices of other goods and the consumer’s income and taste. efficiency a situation or practice which are considered efficient in economics when they achieve the greatest possible productivity or satisfaction through scarce resource utilization. elasticity measurement of the degree to which change in one variable affects another (for example, the degree to which an increase in price or in income affects the demand for a good). externalities costs that are external to a firm or a person, in the sense that they do not enter into the firm’s or person’s cost of production calculation (external diseconomies) or benefits that do not yield any revenue to the firm or person in question (external economies). free rider strategy whereby a person aims to enjoy the benefits that a given activity or investment provide without contributing to their financing. game theory branch of mathematics, with many applications in the field of economics, that studies strategies for behaviour in situations of...
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