Economics Week 2

2.1-2.6

Industrial Revolution

Wave of technological advances and organizational changes starting in Britain in the 18th century.

General purpose technologies

Technological advances that can be applied to many sectors and spawn further innovations, information, and communications.

Flow

Quantity measured per unit of time, such as annual income or hourly wage.

Equilibrium

Something of interest unless an outside or external force is introduced that alters the model’s description of the situation.

Subsistence level

The level of living standards such that the population will grow or decline.

Ceteris paribus

Holding other things constant; We see more by looking at less.

Incentive

Economic reward or punishment which influences the benefits and costs of alternate courses of action.

Relative price

Price of a good or service compared to another (ratio).

Economic rent

A payment/benefit received more than what the individual would have received in their next best alternative.

Reservation option

A person’s next best alternative among all options in a particular transaction.

Dominated

A win-win alternative.

Isocost line

A line that represents all combinations that cost a given total amount.

Entrepreneur

A person who creates or is an early adopter of new technologies, and other opportunities.

Creative destruction

Out with the old, in with the new.