No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Appendix A Definition Index 476 Double coincidence of wants: the necessary condition for trade to take place in a world without money; what each person has for trade must be wanted by the other for a trade to take place. (Chapter 11—The Origin of Money: The Most Marketable Commodity) Dumping: In international trade, dumping occurs when foreign companies are subsidized by their government and therefore allowed to sell products below their costs to gain market share in foreign markets. (Chapter 15—Arguments against Free Trade) E Earmarks: appropriations for specific projects within a congressional member’s district or a Senator’s state. (Chapter 14—Government Failure) Economic profits: the difference between total revenues and total costs, to include opportunity costs of the use of the owner’s equity and talent (not included in accounting costs). (Chapter 7—Profit: The Driving Force for Entrepreneurs/Accounting Profit vs. Economic Profit) Economically efficient: A firm is said to be economically efficient if it cannot lower costs further without decreasing output. (Chapter 7—Profit Maximization) Economies of scale: As a firm gets larger, it can often reduce costs by more efficiently purchasing resource inputs. (Chapter 7—Structure of Production: Stages of Capital/ Returns to Scale) Effective interest rate: the rate that would have to be applied as simple interest to achieve the same interest earned by more frequent compounding. (Chapter 16— Valuing the Future—Concepts in Capital and Finance) Efficient Market Hypothesis: Markets are said to be efficient if prices fully reflect all available information. (Chapter 16—Valuing the Future—Concepts in Capital and Finance) Elasticity: a measure of the responsiveness of a given variable to changes in another variable (usually price, but not always). (Chapter 3—A Deeper Dive into Concepts for Demand/Elasticity) Elasticity of supply: a measure of the responsiveness of the quantity supplied to its price. (Chapter 4—Supply and Costs/Elasticity) Emergent order: an order that arises out of the actions of numerous individuals, the order of which is not likely to have been foreseen or intended by the individuals’ actions. (Chapter 2—Emergent Order)