Tariff: A tax on goods imported from another country.
Tax incidence: The degree to which a consumer pays a tax on the sale of a good, and the degree to which the seller pays the tax, based on the price elasticity of demand and supply.
Technology: The processes and knowledge that go into production.
TC: Total cost. The sum of total variable cost and total fixed cost.
TFC: Total fixed cost. The total cost associated with fixed inputs.
Total cost: The sum of total variable cost and total fixed cost.
Total fixed cost: TFC. The total cost associated with fixed inputs.
Total labor force: The number of employed persons plus the number of persons counted as unemployed. Also known simply as the labor force.
Total physical product: The total number of units of output for a given quantity of a variable input. Same as total product.
Total population: The total number of persons living within a nation’s borders.
Total product: The total number of units of output for a given quantity of a variable input. Same as total physical product.
Total revenue: TR. Proceeds from sales. Equal to price times quantity.
Total revenue maximization: Total revenue is maximized at the quantity where the demand curve is unit elastic.
Total surplus: The sum of consumer surplus and producer surplus.
Total variable cost: TVC. The variable costs associated with a given level of output. Equal to quantity times average variable cost.
TPP: Total physical product. The total number of units of output for a given quantity of a variable input. Same as total product.
TR: Total revenue. Proceeds from sales. Equal to price times quantity.
Trade deficit: The amount by which imports exceeds exports.
Trade embargo: A trade restriction in which the imports of a specific good, or imports from a specific country, are forbidden.
Trade restrictions: Anything that limits free trade between nations.
Trade subsidy: A payment made by the government to a domestic producer, effectively decreasing the production costs for domestic production.
Trade surplus: The amount by which exports exceeds imports.
Transaction demand for money: The amount of money that the public prefers to hold in order to pay for transactions.
Transfer payments: Money that the government collects from one group of people in the form of taxes, and pays to another group of people in the form of benefits. This portion of government spending does not represent new production in the economy, and therefore is not included in GDP.
Trough: The point in the business cycle when the contraction stage ends. This is the lowest point of the cycle.
TVC: Total variable cost. The variable costs associated with a given level of output. Equal to quantity times average variable cost.
Types of unemployment: Unemployment is classified into four categories: cyclical, frictional, structural, and seasonal.
Underemployment: People who are employed but not fully utilizing their abilities. Often refers to part time workers who would prefer to be working full time.
Underground economy: Economic activity that is not reported for tax purposes and is not included in official government statistics. Also known as the black market, hidden economy, shadow economy, informal economy, and parallel economy.
Unemployed persons: People without jobs who are actively searching for work.
Unemployment: Wanting a job, and actively looking for a job, but not having a job.
Unemployment rate: The percentage of the labor force that is classified as unemployed.
Unemployment statistics: Various statistics relating to the labor market, especially the unemployment rate.
Unilateral transfers account: The portion of the current account in the balance of payments that represents transactions between countries in which only one country actually receives something.
Unit elastic: An elasticity in which a change in one variable will result in an equal change in another variable. The elasticity value is equal to one.
Unit of account: The function of money in which the values of different items can be compared based on their prices as measured by the currency.
Unlimited wants: The concept that somebody will always want more of something.
Upward bias: The idea that the official inflation rate is probably higher than the actual inflation rate, due to problems with measurements. One source of upward bias is holding the bundle of goods used in the measurements constant even after the relative prices of the goods involved change. Another source of upward bias is that the price changes are not adjusted for improvements in the quality of the goods over time.
Utility: A measure of the satisfaction, or happiness, that something gives to an individual.
Variable cost: VC. The cost associated with a factor of production that changes as the level of output changes.
Velocity of money: The average number of times that a given money supply is spent in an economy in one year.
Wages: The price paid to labor.
Wealth effect: A price factor of aggregate demand. With any given amount of financial assets (money, stocks, and bonds), the higher the price level, the lower the purchasing power, and therefore the lower the real wealth.
Wholesale Price Index: Former name for the Producer Price Index.
WPI: Wholesale Price Index. Former name for the Producer Price Index.