Economics Glossary: S -, Learning Economics... Solved!


Economics Glossary: S

Saving – The amount of income that is not used for consumption expenditures or paid in net taxes.

Scarce – Limited in nature.

Scarcity – The condition that exists because our wants exceed the ability of resources to satisfy them.

Scatter diagram – A graph of the value of one variable plotted against the value of another variable.

Search activity – The time spent looking for someone to do business with.
Seasonal unemployment – The unemployment that exists because of seasonal economic activity, such as harvest and planting seasons.

Self-interest – The choices that are best for the individual that makes them.

Services – The things that we buy that do not involve the production of physical goods.  Services include: education, haircuts, medical and legal services.

Shares of stock – Financial instruments that give the holder of a share a percentage of ownership in the firm, and a right to a share of the firm’s profits.

Shift of a supply curve -- The change that takes place in a supply curve due to a change in one of the determinants of supply.  Don’t confuse this with a “movement” along the supply curve.

Shift of the demand curve – The change that takes place in a demand curve due to a change in one of the determinants of demand.  Don’t confuse this with a “movement” along the demand curve. 

Shock therapy – One possible approach to transition from a socialist market structure to a capitalist market structure.  This approach believes in rapid liberalization of trade, privatization, and deregulation of prices. 

Short run – The time frame where the quantities of some inputs are fixed, such as the size of a building or the number of machines.

Shortage – A situation where the quantity demanded exceeds the quantity supplied (which will result in higher prices).

Shutdown point – The point where price equals the minimum average variable cost for the perfectly competitive firm and the quantity produced that is associated with this price/cost.

Single-price monopoly – A monopoly that must sell every good or service that it produces for the same price to all consumers. 

Slope – A measurement of a curve that indicates whether the relationship between two variables is either positive or negative.  The slope also states how much of a change in Y there will be when X changes.

Social interest – The choices that are best for the whole society.

Social interest theory – The theory that government regulation can achieve efficient allocation of resources.

Stabilization policy – Both monetary and fiscal policies that aim to smooth out fluctuations in output, employment and prices.

Stagflation – A situation where the economy is experiencing both high inflation and high unemployment.  Generally a difficult situation because government policies usually have to trade off between the two.

Standard of living – The level of consumption of goods and services on average, which is generally measured by average income per person.

Statistical discrepancy – A data measurement error.

Sticky prices – Prices that do not adjust rapidly to maintain equilibrium.

Sticky wages – The downward rigidity (people don’t want lower wages) of wages, a possible cause for unemployment.

Stock – A certificate that shows ownership of a certain portion of a business.

Store of value – An asset that can be used to transport purchasing power over time.  For example, Gold has good store of value, but fish does not (it can rot and lose value).

Strategies – All of the possible actions of each player in a game theory game.

Structural adjustment – A series of programs in developing countries with the goal of: reducing the size of their public sectors, decreasing their deficit budgets, controlling inflation, and encouraging private savings and investment.

Structural deficit – The deficit that remains, even at full employment.

Structural unemployment – The percentage of unemployment that occurs because of changes in the structure of the economy that may result in significant job loss in certain industries.  Such as call centers moving to India, or manufacturing moving to China.

Subsidy – A payment from the government to a producer of a good or service (kind of like a reverse tax).

Substitutes – Goods or services that can serve as replaces for each other.  When the price of one substitute rises, the demand for the other substitute will increase.

Substitutes in production – A good that can be produced in the place of another good.  For example, raw milk can either be used to produce drinkable milk, or cheese, so drinkable milk and cheese are substitutes in production.

Sunk costs – Costs that have already occurred and should not be considered in current decision making analysis if using marginal analysis.

Supply curve – A graph that shows how much of a good or service a firm will sell at different market prices.

Supply of labor – The relationship between the quantity of labor supplied and the real wage rate.

Supply schedule – A table that shows how much a of a good or service a firm will sell at different market prices.

Surplus – A situation in which the quantity supplied exceeds the quantity demanded (which will result in a lower price).