Economics, 3rd Edition

residual demand 

the difference between the market demand 

curve and the amount supplied by other firms in the market

risk 

the probability of something happening which results in a loss 

or some degree of hazard or damage

risk averse 

exhibiting a dislike of uncertainty

rival 

the property of a good whereby one person’s use 

diminishes other people’s use

sacrifice ratio 

the number of percentage points of annual output 

lost in the process of reducing inflation by 1 percentage point

satisficers 

those who make decisions based on securing a 

satisfactory rather than optimal outcome

scarcity 

the limited nature of society’s resources

screening 

an action taken by an uninformed party to induce an 

informed party to reveal information