Glossary Terms:

Market Failures and Government Regulation: Is the Cure Worse than the Disease?

Glossary terms from:
http://www.econedlink.org/e40


Banking

The industry involved with conducting financial transactions. Also, conducting business with a bank, e.g., maintaining a checking or savings account or obtaining a loan.

Business

Any activity or organization that produces or exchanges goods or services for a profit.

Choice

Decision made or course of action taken when faced with a set of alternatives.

Competition

Attempts by two or more individuals or organizations to acquire the same goods, services, or productive and financial resources. Consumers compete with other consumers for goods and services. Producers compete with other producers for sales to consumers.

Consumers

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

Costs

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

Deceptive Practices

Misleading methods used by businesses to sell goods or services. Examples include misleading prices, bait-and-switch tactics and false advertising.

Distribution

The allocation or dividing up of the goods and services a society produces.

Economic Efficiency

A situation in which no one in a society can be made better off without making someone else worse off.

Economics

The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

Firms

Economic units that demand productive resources from households and supply goods and services to households and government agencies.

Goods

Tangible objects that satisfy economic wants.

Income

Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.

Interest

Money paid regularly, at a particular rate, for the use of borrowed money.

Job

A piece of work usually done on order at an agreed-upon rate. Also a paid position of regular employment.

Markets

Places, institutions or technological arrangements where or by means of which goods or services are exchanged. Also, the set of all sale and purchase transactions that affect the price of some good or service.

Product

A good or service that can be used to satisfy a want.

Productivity

The amount of output (goods and services) produced per unit of input (productive resources) used.

Regulation

Economic regulation is the prescription of price and output for a specific industry, often a natural monopoly. Social regulation is the prescription of health, safety, performance, environmental, output and job standards across several industries.

Resources

The basic kinds of resources used to produce goods and services: land or natural resources, human resources (including labor and entrepreneurship), and capital.

Return

Earnings from an investment, usually expressed as an annual percentage.

Risk

The chance of losing money.

Services

Activities performed by people, firms or government agencies to satisfy economic wants.

Spend

Use money now to buy goods and services.

Taxation

Taxation is the process in which a charge is imposed upon a taxpayer by a state or a legal equivalent of a state.

Taxes

Compulsory payments to governments by households and businesses.

Workers

People employed to do work, producing goods and services.