Specialization refers to the concentration of an individual, firm, or country’s resources and efforts on producing a particular
Glossary Category: Economics
role of the entrepreneur
The entrepreneur plays a central role in modern economies by identifying and exploiting new business opportunities. This involves
human capital
the knowledge, skills, and abilities of an individual that can be used to produce economic value. It includes
long run
all factors of production are variable, production is bounded by technology and government rules
ceteris paribus
Ceteris paribus is a Latin phrase meaning “all other things being equal”. It is used in economics to
very long run
all factors of production, technology and government rules are variable; e.g. the ability to change the state of
positive statement
A positive statement is an objective claim based on facts that can be tested or verified as true
short run
at least one variable/factor is fixed, e.g. physical capitals such as size of factory, so the response to
normative statement
A positive statement is a statement based on facts that can be tested or verified as true or
opportunity cost
the cost in terms of the next best alternative foregone