Archives: Terms

Definition of Private Enterprise Private enterprise refers to businesses or organizations that are owned and operated by private individuals or groups, rather than by the government. These enterprises are typically driven by the goal of making a profit and operate within a competitive market environment. They play a crucial role […]

Definition of Private Cost Private cost refers to the costs that are incurred by an individual or a firm in the process of producing goods or services. These costs are strictly borne by the private entity and do not take into account any externalities or costs imposed on society. Private […]

Definition of Private Company A private company is a business owned by private individuals or entities, and its shares are not freely traded on public stock exchanges. This type of company can take various forms, such as sole proprietorships, partnerships, or privately held corporations. Unlike public companies, private companies are […]

Definition of Private Benefit Private Benefit refers to the gains or advantages that accrue to individuals or private entities as a result of undertaking a particular action or investment. This type of benefit is often contrasted with public benefits, which are enjoyed by society as a whole. In economic terms, […]

Definition of a priori A priori is a term derived from Latin, commonly used in philosophy and logic, which means “from the earlier” or “from the beginning.” It refers to knowledge that is gained independently of, or prior to, any experience. A priori knowledge is deductive in nature, often involving […]

Definition of Opportunity Cost Opportunity cost is defined as the value of the next best alternative foregone when a decision is made to pursue a particular course of action. This concept plays a crucial role in economics because it highlights the potential benefits an individual, investor, or business misses out […]

Definition of Principal Components Analysis Principal Components Analysis (PCA) is a statistical procedure that transforms a set of possibly correlated variables into a set of uncorrelated variables called principal components. These principal components are ordered such that the first few retain most of the variation present in the original variables. […]

Definition of Principal The term “principal” carries several meanings in economics and finance. Most commonly, it refers to the original amount of money that is either invested or loaned. When you take out a loan or make an investment, the principal is the initial size of the loan or the […]

Definition of the Primary Sector The primary sector of the economy refers to industries that are involved in the extraction and collection of natural resources. This sector encompasses all activities related to the extraction of raw materials such as agriculture, mining, forestry, fishing, and oil extraction. The primary sector forms […]

Definition of Primary Market The primary market refers to the financial market where new securities, such as stocks and bonds, are issued and sold for the first time. This marketplace enables corporations, governments, and other entities to raise capital by directly selling new issues to investors. Essentially, the primary market […]