Civil Engineering Reference
In-Depth Information
consumer goods
Goods that are used directly by households to generate satisfaction.
Contrast with capital goods.
consumer price index (CPI)
A weighted average of prices of a representative set of
goods and services purchased by the typical household. It has been the official
measure used by the UK government to monitor inflation since January 2004.
The CPI is similar to the retail prices index (RPI), but there are differences of
coverage and methodology.
consumer sovereignty
The concept that the consumer is king. In other words, the
idea that consumers ultimately determine which goods and services are produced
in the economy. This may not apply in markets dominated by very large firms.
contestable markets
This refers to markets in which there is strong potential (or
actual) competition because there are no barriers to entry or exit. In a contestable
market, firms have to price products competitively and profits are constrained.
contingent valuation method
This is a technique used to identify the price of
an externality. It involves a survey of the interested parties in an attempt to
attribute a hypothetical (monetary) value to an environmental gain or loss.
contracting out
Used in the context of privatisation, contracting out refers to the
transfer of publicly provided activities to private contractors. For example, a
county council may contract out the management of its property portfolio to a
private sector surveying firm.
cost-benefit analysis
This is a way of appraising an investment proposal. It involves
taking into account the external costs and benefits of a proposed development
as well as the conventional private costs and benefits. This is done by estimating
monetary values for aspects such as health, time, leisure and pollution.
cost-push inflation
A rise in price level associated with a rise in production costs,
such as the price of raw materials.
cover pricing
This occurs when a company submits a bid price during a tender
process that is not necessarily designed to win the contract but is intended to
give the appearance of competition. The client is left with a false impression of
the market price and may end up paying more than is necessary.
credit crunch
A termed coined to describe the financial markets of 2007-2008 in
which lenders began to raise the cost of borrowing and restrict the supply of
loans.
current prices
Monetary values expressed in terms of today's prices. In other words,
what you have to pay for a good or service today. Also called absolute or
nominal prices. Contrast with constant prices.
cyclical indicators
Economic statistics that are used by economic forecasters to
analyse the state of the economy. See entries for leading, lagging and coincident
indicators.
deflation
This is a sustained persistent fall in the general price level. It is the
opposite of inflation.
demand function
A symbolised representation of the relationship between the
quantity demanded of a good and its various determinants. It looks like an
algebraic equation but it is actually just shorthand notation.
