29 terms were found starting with the letter p.
- Pareto Optimal
- A situation where it is not possible for individuals, households, or firms to bargain or trade in such a way that everyone is at least as well off as they were before and at least one person is better off. Also known as an efficient outcome.
- Partial Equilibrium
- A method of economic analysis that examines one or more sectors of an economy, taking what is happening in the rest of the economy as exogenous (in other words, not affected by the sectors being analyzed). Useful for detailed study of one or more sectors.
- Pastoral Nomadism
- A type of farming system in which farmers and farm families travel, more or less continuously, with herds of livestock.
- Per Capita Income
- Total income divided by total population; in other words, average income per person.
- Perfect Competition
- Occurs when the none of the actions of any buyer or seller has an effect on the market price. The opposite of perfect competition is imperfect competition.
- Perfect Equality Line
- A 45-degree line in a Lorenz curve diagram showing what income distribution would be in the case of perfect equality among individuals or households.
- Perfect Information
- Occurs when every buyer knows the true benefits associated with the consumption of a good or service, and when every seller knows the true costs associated with the production of a good or service. The opposite of perfect information is imperfect information.
- Physical Capital
- Another name for ordinary capital; in other words, tangible investment goods such as plant and equipment, machinery, and buildings. Often used to distinguish ordinary capital from human capital.
- Pigouvian Tax
- A tax on an externality equal to the difference between the marginal private cost of the activity causing the externality (e.g., automobiles emitting pollutants) and the marginal social cost of this activity.
- Point Source Pollution
- Pollution that is released into the environment at distinct locations that can be identified and monitored at a reasonable cost (e.g., the tip of a factory’s smokestack). The opposite of point source pollution is nonpoint source pollution.
- Political Risk
- The risk that a government will unexpectedly change the rules of the game under which businesses in that country operate.
- Pollution Abatement Technology
- A technology designed to treat pollutants or reduce emissions of pollutants after they have been physically created.
- Pollution Prevention Technology
- A technology designed to alter production processes so as to prevent the physical creation of pollutants.
- Poverty
- A situation in which a person or household lacks the resources necessary to be able to consume a certain minimum basket of goods. The basket consists either of food, clothing, housing and other essentials (moderate poverty) or of food alone (extreme poverty).
- Poverty Gap
- The amount of income that would be required to bring every poor person exactly up to the poverty line, thereby eliminating poverty.
- Predatory Pricing
- A pricing policy designed to drive one or more competitors out of business.
- Price Discrimination
- Charging different prices to different customers for similar goods.
- Price Taker
- A firm, household, or other economic agent that constitutes such a small share of the market for a good that its decisions do not influence the market price.
- Primary Commodity
- A commodity that has not yet had any significant degree of processing (e.g., agricultural commodities, wood, oil, minerals).
- Private Cost
- The cost of an activity to the individual, household, or firm undertaking the activity.
- Private Good
- A good that is both excludable and rival. A good is excludable if it is possible to prevent someone from consuming that good once it has been made available to the public. A good is rival if one person’s consumption of that good reduces the quantity available for consumption by someone else.
- Producer Support Estimate/Producer Subsidy Equivalent (PSE)
- An indicator of the annual monetary value of gross transfers from consumers and taxpayers to support producers, arising from government policies directed toward producers in a particular sector (e.g., agriculture). Is negative if policies transfer income away from producers and toward consumers or taxpayers.
- Producer Surplus
- A measure of the gains to producers from production of a good or service. Defined as total revenues earned, minus the area underneath the supply curve up to the total quantity produced.
- Production Possibilities Frontier (PPF)
- A curve showing the possible alternative combinations of two goods (for example, agricultural and nonagricultural goods) that an economy can produce using the available factors of production.
- Productivity
- Same as average product – the total quantity of output divided the total quantity of some input.
- Profit Maximization
- Choosing the level of output, and the quantities of inputs into production needed to achieve that level of output, so as to make profits as large as possible.
- Protectionism
- The practice of shielding domestic firms by using tariffs, quotas, or other trade barriers to discourage imports. Usually substantial output inefficiencies follow and consumer welfare decreases.
- Public Good
- A good that is both nonexcludable and nonrival. A good is nonexcludable if it is not possible to prevent anyone from consuming the good once it has been made available to the public. A good is nonrival if one person’s consumption of that good does not reduce the quantity available for consumption by someone else.
- Purchasing Power Parity (PPP)
- A method to more accurately compare incomes across countries. Converts income in each country from that country’s domestic currency to U.S. dollars using purchasing power parities rather than the usual method of using official exchange rates or market exchange rates. Purchasing power parity adjusts official exchange rates for cost-of-living differences between the U.S. and the country in question.