Archives: Terms

Definition of Leontief Production Function The Leontief Production Function is a mathematical representation used in economics to describe the relationship between inputs used in the production of goods or services and the resulting output, with a focus on fixed proportions of inputs. This function is named after Wassily Leontief, who […]

Definition of the Leontief Paradox The Leontief Paradox emerges from an empirical contradiction to the Heckscher-Ohlin theorem in international economics. Formulated by economist Wassily Leontief in 1953, this paradox reveals that, contrary to the predictions of Heckscher-Ohlin, the United States—an economy abundant in capital—exported labor-intensive goods while importing capital-intensive goods. […]

### Definition of Lemon Market A “lemon market” refers to a market affected by information asymmetry between the buyer and the seller, where the seller has more information about the product than the buyer. This term is most commonly used in the context of the used car market but can […]

Definition of Leapfrogging Leapfrogging is an economic phenomenon where developing countries or regions bypass certain stages of technology or development that developed countries have previously undergone. This bypass often involves adopting the latest technology directly, skipping over older, less efficient methods or technologies. Leapfrogging can lead to rapid economic growth […]

Definition of Leakage Effect The leakage effect refers to the process by which income generated in an economy is removed from circulation before it can be used for further domestic economic activities. This phenomenon typically occurs when income is redirected towards imported goods and services, savings, or taxes rather than […]

Definition of the Law of Increasing Costs The Law of Increasing Costs, also known as the law of increasing opportunity cost, is a principle in economics that states as production of a particular good increases, the cost to produce an additional unit of that good increases as well. This is […]

Unfortunately, you haven’t provided specific details for a glossary entry about the “Lausanne School.” However, below is an extended glossary-style entry based on what the Lausanne School typically refers to in economics. — ### Lausanne School #### Definition of Lausanne School The Lausanne School is a school of thought in […]

Definition of the Lange Model The Lange model, named after the Polish economist Oskar Lange, is a theoretical framework that outlines how a socialist economy could use market principles to achieve efficient resource allocation. It proposes a system of public ownership of the means of production with a central planning […]

Definition of Labor Theory of Value The Labor Theory of Value is an economic principle which posits that the value of a good or service is determined by the total amount of socially necessary labor required to produce it, rather than by the use or pleasure its owner gets from […]

Definition of Labor Rights Labor rights, also known as workers’ rights, encompass a range of legal rights and protections granted to workers. These rights are designed to provide a safe, healthy, and equitable working environment and include aspects such as the right to fair pay, protection against unjust dismissal, the […]