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

Appendix A Definition Index 490 Tragedy of the commons: When resources are collectively owned, there is an incentive for each part of the collective to consume as much of the resource as possible; there is no incentive to conserve. The result is an overuse of the common resource. (Chapter 6—More Market Limitations: Poorly Defined Property Rights) Transaction costs: the costs of arranging trades between buyers and sellers. (Chapter 6—Market Limitations) Transportation costs: the cost to transport goods from a seller to a buyer—to bring the good to a market. ( Chapter 6—Market Limitations ) U Uncertainty: a future event for which a probability of occurrence cannot be known, or that the knowledge of the event itself cannot be known. (Chapter 10—The Market Process/Uncertainty) Unit of account: Money serves as a unit of account by providing a common way to compare different goods in terms of their price . (Chapter 11—Functions of Money) Utility: the economic term to assess well-being, happiness, or personal benefit. This conceptual idea is subjective and not numerically measurable. (Chapter 2—Utility) V Variable costs: any cost that increases/decreases as output increases/decreases, such as labor and raw material inputs. (Chapter 7—Short Run Costs) Venture capitalists: financiers who specialize in funding risky, early stage business enterprises. These early stage ventures are high risk, but offer high reward. (Chapter 9— Entrepreneurship: The Essence of the Market Process/Enter the Entrepreneur!)