Additional Worker Effect - the tendency for increases in the unemployment rate to result in additional individuals entering the labor market to make up for income lost due to unemployed family members

Budget Constraint - a line showing the maximum combinations of two "goods" which an individual can achieve, assuming a constant price ratio between them

Ceteris Paribus - the logical condition that "all other relevant factors remain unchanged"

Diminishing Returns - the principle that as you add additional units of an input, while holding other inputs constant, eventually each additional unit of input adds decreasing amounts to output

Discouraged Worker Effect - the tendency for increases in the unemployment rate to result in individuals withdrawing from the labor market due to the poor likelihood of finding desirable employment

Elasticity - the relationship between quantity and price.  The elasticity of demand is the change in the amount of a "good" demanded in the market for a given change in price.  The elasticity of supply is the change in the amount of a "good" supplied in the market for a given change in price

General Training - the acquisition of skills which will increase a worker's productivity working for a wide variety of employers

Human Capital - an approach that views education, training, etc., as forms of investment which individuals will compare to other investment opportunities

Income Effect - the change induced in behavior (e.g. labor supply) due to a change in the income of workers, assuming relative prices remain unchanged

Indifference Curve - a relationship showing possible combinations of two "goods" which make an individual equally well off

Inferior Good - good where the income effect is so strong that a reduction in income results in individuals buying more of that good instead of less

Isocost - all the combinations of inputs (e.g. labor and capital) available for a given expenditure of funds

Isoquants - curves showing combinations of inputs that will produce equal quantities of output

Labor Supply - the relationship between the number of hours which workers offer in the market and the price (wage rate) they are offered for those hours

Marginal Cost - the cost of producing one additional unit of any output

Marginal Physical Product - the addition to the actual amount of output, not measured in terms of value, by adding, ceteris paribus, one additional unit of a single input, e.g. labor

Marginal Product - the additional output produced by adding, ceteris paribus, one additional unit of a single input, e.g. labor

Marginal Rate of Technical Substitution - the rate at which one input can be substituted for another to produce equal quantities of output

Marginal Revenue - the additional income a producer receives by producing and selling one more unit of output

Marginal Revenue Product - the product of marginal revenue times marginal physical product

Monopoly - the only seller in a market

Monopsony - the only buyer in a market

Net Present Value - the current worth of a set of expenditures and/or revenues that extends into the future.  This concept is often used to evaluate investment opportunities

Scale Effect - the change in demand for an input resulting from a change in output produced, assuming no change in the relative prices of inputs

Specific Training - the acquisition of skills which will increase a worker's productivity only if they stay with their current employer

Substitution Effect - the change induced in behavior (e.g. labor supply) due to a change in relative prices, assuming real incomes remain unchanged

Value of Marginal Product - the product of price times marginal physical product