Part One Flashcards
Question
Answer
A Priori
(Latin) At the outset; that which exists prior to examination
Absolute Advantage
Whatever one does better than others. (See comparative advantage)
Advertising
The science of arresting human intelligence long enough to get money form it
Affectation
A social disease requiring its victims to wear holing-in-the-jeans. (See conspicuous consumption)
Alienation Theory
A thesis that explains why some citizens feel they are in, but not part of a society; e.g., the iron law of wages (Karl Marx), or the Vietnamese War. (See reconciliation theory)
Anti-cyclical
Any market behavior that drives the price toward the trend line or moving average. Buying or selling that stabilizes the market price by minimizing the vagaries of the cycle. (See pro-cycle)
Antitrust Trilogy
The Sherman, Clayton, and Robinson-Patman Acts
Arbitrage
A simultaneous transaction in two or more markets, buying in the cheap (low price) market and selling in the dear (high price) market
Archaist
Someone who studies or praises the past, or whose intellectual perspectives and values are shaped by reverence for the past. (See futurist)
Area of Decreasing Marginal Cost
Any quantity of production before the minimum point on the marginal cost function; i.e., before the inflection point on the total cost function. The area of increasing returns.
Area of Decreasing Returns
Any quantity of production beyond the point of diminishing returns. The area of increasing marginal cost.
Area of Increasing Marginal Cost
Any quantity of production beyond the point on the marginal cost function; i.e., beyond the inflection point on the total cost function. The area of decreasing returns.
Area of Increasing Returns
Any quantity of production before the point of diminishing returns. The area of decreasing marginal cost.
Arithmetic Progression
A series of numbers increasing at a decreasing rate; i.e., 1,2,3,4. (See geometric profession and rate of increase)
Arrow’s Impossibilities Theorem
That which is mathematically impossible may, in the marketplace, occur. Kenneth Arrow’s observation that no method of calculating consumer data can accurately predict market behavior 100% of the time; i.e., aggregating individual preference does not necessarily forecast group preference
Artificial Barrier To Trade
A non-economic barrier to a market such as a union or contract, an intellectual property law, or crime.
Asymptote
A function which continuously approaches a line or axis without meeting it at any finite distance; e.g., an indifference curve or average fixed cost function. Technically, a tangent at infinity.
Asymptotic
What happens if you get scared half-to-death - twice
Auction With Reserve
The seller reserves the right to influence the price by setting a minimum price, using a shill, or withdrawing the item prior to the falling of the gavel
Average Cost (AC)
Total costs (TC) divided by the number of units produced (q)
Average Fixed Cost Function
An asymptote found by dividing fixed cost by the number of units produced
Bank
A place where money automatically increases in value when you need to borrow it
Banker
Someone who will loan you an umbrella when the sun is shining and want it back when it starts to rain
Bankruptcy
A court ruling which provides permanent relief (Chapter 7); or temporary relief to a municipality or county (Chapter 9), a firm (Chapter 11), or an individual (Chapter 13). Such relief may be granted if insolvency exists or is anticipated (See insolvency)
Benelux
An acronym for the common market that pre-dated (and is now included in) the European Community formed by the nations of Belgium, Netherlands, and Luxembourg
Best-Seller
A book that is bought by as many people that attend a single USC football game.
Black Hole
Where God divided by zero. (See Note on Algebraic Terms and Operations, No 9)
Black Market
An illegal transaction: i.e., the sale of a prohibited good or service
Blue Chip Stock
A major corporation with a reputation for financial stability and an excellent history of dividend payments. (See glamour stock)
Bookcase
A piece of furniture used m America to display bowling trophies and Elvis collectibles.
Break-Even Point
Where total revenue (TR) equals total cost (TC).
Broker
What a broker makes people
Bullionist
An English mercantilist. The word is derived from the British use of small gold bars called bullion. (See mercantilism and Colbertist)
Business Cycle
Variations above and below the trend line of an economy or the price of the stock, with periods measured from trough to trough. Economists have identified major cycles of 50 years (Nikolai Knodratieff), 20 years (Karl Marx), and four years (Roy Harrod and Evsey Domar). (See cycles)
Capacity Point
The optimal level of production, when all factors of production are being employed at their highest and best use. The minimum point on the average cost curve.
Capital
In economics, a good (e.g., machine, truck, warehouse etc.) used by the business sector to produce another good. (See factor of production)
Capitalism
A legal system that safeguards private property and permits free enterprise without government interference.
Cardinal Numbers
Numbers that assign specific value; e.g., 1, 2, 10. See ordinal numbers)
Cartel
A syndicate of two or more firms that divide up the market ( by geography, quantity, or product differentiation) for the purpose of colluding. (See collusion)
Caveat Emptor
(Latin) In business, let the buyer beware. In economics, this term encapsulates the essence of the market system; i.e., that everyone must be responsible for his or her own economic decisions.
Cease and Desist Order
A ruling by a judge ordering one part to stop what they’re doing and to not do it again. Such rulings include TRO’s (temporary restraining orders), preliminary injunction, and permanent injunctions.
Ceteris Paribus
(Latin) All else remains constant. Examining the changes in two or three variables while assuming that all other variables do not change.
Chancery Court
A court of equity, originally (13th century England) held in the residence (chancery) of a church bishop.
Classical Economics
The doctrines (theories) and paradigms (models) developed from 1752 through 1867 that formed an academic discipline originally called “political economy.” The founders of this subject matter, called “Ricardians,” promoted free trade as their universal tenet and believed that the concept of price was explained by the labor theory of value.
Classical Rent Doctrine
David Ricardo’s theory that surplus value is captured by the landlord. (See labor theory of value)
Clayton Antitrust Act
In addition to outlawing specific anticompetitive behaviors, this 1914 law authorized federal judges to issue preliminary injunctions when they hear evidence that he Sherman Antitrust act has been violated. (See Antitrust Trilogy)
Colbertist
A French mercantilist. The word reflect the enormous power and influence of Jean Colbert, Finance Minister to Louis XIV. (See mercantilism and bullionist)
Collusion
Two or more firms acting in concert to manipulate the market to their benefit, thereby adversely affecting the consumer. (See mergers and acquisitions, cartel, and price fixing)
Comic Nose
An anagram for “economics”
