Archives: Terms

Definition of Protectionism Protectionism refers to the economic policy of restricting trade between countries by imposing barriers such as tariffs, quotas, or subsidies. The primary objective of protectionism is to protect domestic industries and jobs from foreign competition. While protectionist measures may provide short-term benefits to certain industries, they often […]

Definition of Production Possibility Frontier (PPF) The Production Possibility Frontier (PPF) is a graphical representation that shows the different combinations of two goods or services a country can produce when it fully utilizes its available resources and technology. The PPF is used to illustrate the concept of trade-offs and opportunity […]

Definition of Production Efficiency Production efficiency refers to a state where the optimal amount of output is produced using the fewest possible resources. In other words, it is a situation where a business or economy is operating at the most efficient level of production, maximizing output while minimizing costs. Example […]

Definition of Production Costs Production costs refer to the expenses incurred by a company in producing goods or providing services. These costs include various factors such as raw material costs, labor costs, rent, utilities, and any other expenses directly related to the production process. Understanding production costs is crucial for […]

Definition of Product Differentiation Product differentiation is a marketing strategy that involves creating perceived differences between products or services in order to make them more appealing to target customers. It is a way for companies to stand out from their competitors and attract customers based on unique features, benefits, or […]

Definition of Producer Surplus Producer surplus is a measure of the benefit that producers receive from selling goods or services at a price higher than the minimum price they are willing to accept. It represents the difference between the price a producer receives and the cost of production. In simple […]

Definition of Procyclic Procyclic is a term used to describe a variable that moves in the same direction as the overall business cycle. That means it tends to increase during periods of economic expansion and decrease during periods of economic recession. In other words, a procyclic variable has a positive […]

Definition of Privatization Privatization refers to the transfer of ownership, control, or management of a public sector enterprise to the private sector. This transfer can involve the sale of assets, such as land, buildings, or infrastructure, to private individuals or companies. It can also involve the outsourcing of services previously […]

Definition of Private Sector The private sector refers to the part of the economy that is owned, controlled, and operated by private individuals or businesses. It includes all non-governmental organizations involved in economic activities, such as sole proprietorships, partnerships, and corporations. The private sector operates independently of the government and […]

Definition of Private Good A private good is a type of good that is both excludable and rivalrous in consumption. That means it is a good that can be owned and only used by a specific individual or group, and its consumption by one person reduces its availability for others. […]