Economics, 3rd Edition

diseconomies of scale 

the property whereby long-run 

average total cost rises as the quantity of output increases

diversification 

the reduction of risk achieved by replacing a 

single risk with a large number of smaller unrelated risks

dominant strategy 

a strategy that is best for a player in a 

game regardless of the strategies chosen by the other players

double coincidence of wants 

a situation in exchange 

where two people each have a good or service that the other 

wants and can thus enter into an exchange

economic activity 

how much buying and selling goes on in the 

economy over a period of time

economic bubble 

when prices of assets and securities rise 

way above their true or fundamental value

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GLOSSARY  807