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The entitlement to make some economic gains is then considered to be illegitimate, in some way. If this is the case, relevant trading obligations (or civil obligations) are usually considered as not being (fully) met or honored, in the pursuit of economic self-interest. Greed is frequently mentioned as a primary motive for economic opportunism.
In economics, diminishing returns are the decrease in marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, holding all other factors of production equal ( ceteris paribus ). [1] The law of diminishing returns (also known as the law of diminishing marginal productivity ...
Sunk cost. In economics and business decision-making, a sunk cost (also known as retrospective cost) is a cost that has already been incurred and cannot be recovered. [1] [2] Sunk costs are contrasted with prospective costs, which are future costs that may be avoided if action is taken. [3] In other words, a sunk cost is a sum paid in the past ...
Opportunity costs: the costs of the alternative opportunities that must be foregone; as productive services are employed for one purpose, all alternative uses have to be sacrificed. Marginalism : in all economic designs, the values, costs, revenues, productivity and so on are determined by the significance of the last unit added to or ...
Signalling (economics) In contract theory, signalling (or signaling; see spelling differences) is the idea that one party (the agent) credibly conveys some information about itself to another party (the principal ). Although signalling theory was initially developed by Michael Spence based on observed knowledge gaps between organisations and ...
Money portal. v. t. e. A shadow price is the monetary value assigned to an abstract or intangible commodity which is not traded in the marketplace. [1] This often takes the form of an externality. Shadow prices are also known as the recalculation of known market prices in order to account for the presence of distortionary market instruments (e ...
The opportunity cost method "uses the wage a person would earn in the market" to see how much value their labor-time has. This method extrapolates from the opportunity cost idea in mainstream economics. The second method of valuation uses replacement costs. In simple terms, this is done by measuring the amount of money a third-party would make ...
In economics, crowding out is a phenomenon that occurs when increased government involvement in a sector of the market economy substantially affects the remainder of the market, either on the supply or demand side of the market. One type frequently discussed is when expansionary fiscal policy reduces investment spending by the private sector.