agreements.
functional distribution of income
The distribution of national income among the major factors of
production: labour, capital, and land.
size distribution of income
The distribution of income among individuals, without regard to source
of income.
Lorenz curve
A graph showing the extent of inequality of income distribution.
present value
The value today of some future amount, discounted using the market
interest rate.
market failure
Failure of the unregulated market system to achieve allocative efficiency.
externality
An effect on parties not directly involved in the production or use of a
commodity. Also called third-party effects.
private cost
The value of the resources used in production as valued by the producer.