Economics Micro & Macro (CliffsAP)

N

national debt:The amount of money that the federal government owes; it is owned by the American public.

natural monopoly:A single firm that has complete control over pricing and output in a market where it is impractical

to have competition.

natural resources:The total raw materials supplied by nature.

negative externality:The result when costs are shifted to people who are not directly involved with the production or

consumption of a good.

negative income tax:Poverty programs in which a person or family below some income level receives a payment from

the government rather than paying some amount of tax to the government.

nominal:The face value of a good or service measured in current currency values.

nondurable goods:Goods that do not last for a long time.

normal goods:Goods for which demand increases as income increases.

O

objectivity:Ruling out the aspects of a problem that might be influenced by personal attitudes or opinions.

oligopoly:A form of market organization in which there are relatively few firms.

open-market operations:The buying and selling of U.S. government securities by the Federal Reserve.

opportunity benefit:The portion gained from making a choice.

opportunity cost:The value of the next best alternative in a decision-making process.

outside lag:The time it takes for the effects of a policy change to be completely felt in the economy once the policy

has been determined.

P

parity price:A price that changes as prices of other goods change so that the income of producers can purchase the

same amount of these goods as in any given base year.

partnership:A type of business organization in which two or more people form a business.

patent:A legal protection for the inventor of a product or process that gives that person or company the sole rights to

produce the product or use the process for an specified period of time.

payment:Any monetary form of retribution for a good or service.

per capita income:The average income that is calculated on a per-person basis.

percentage:A ratio converted to a base using 100 equal parts.

perfect competition:A market organization in which a great many small firms produce a homogeneous product with

no individual price control.

CliffsAP Economics Micro & Macro

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