Absolute (Money) Price

Laissez-faire A public policy of not interfering with market activities in the economy.
Land All natural resources, such as
minerals, forests, water, and unimproved
land.
Law of Demand As the price of a good
rises, the quantity demanded of the good
falls, and as the price of a good falls, the
quantity demanded of the good rises, ceteris
paribus.
Law of Diminishing Marginal Returns
As ever larger amounts of a variable input
are combined with fixed inputs, eventually
the marginal physical product of the variable
input will decline.
Law of Diminishing Marginal Utility
The marginal utility gained by consuming
equal successive units of a good will decline
as the amount consumed increases.
Law of Increasing Opportunity Costs
As more of a good is produced, the opportunity costs of producing that good increase.
Law of Supply As the price of a good
rises, the quantity supplied of the good rises,
and as the price of a good falls, the quantity
supplied of the good falls, ceteris paribus.
Least-Cost Rule Rule that specifies the
combination of factors that minimizes costs
and so requires that the following condition
be met: MPP
1/P1 5 MPP2/P2 5 . . . 5
MPP
N/PN, where the numbers stand for the
different factors.
Leverage The use of borrowed funds to
increase the returns that can be earned with
a given amount of capital.