Glossary - Construction Economics: A New Approach - page 301

economic system The institutional means through which resources are used to
satisfy human wants.
economics A social science studying human behaviour and, in particular, the way
in which individuals and societies choose among the alternative uses of scarce
resources to satisfy wants.
economies of scale When increases in output lead to decreases in long-run average
costs.
ecosystem services Refers to biological processes that contribute to human wellbeing,
such as clean air and water, biodiversity, pollination, climate control and waste
assimilation. These services tend to be public goods with no price and no market
and they are not effectively factored into the cost of development. This raises
questions about their value. Several examples are listed in Table 11.2 .
effective demand Demand that involves desire and ability to pay. In other words, it
is the demand that can be measured by actual spending.
efficiency See glossary entries for allocative efficiency and productive efficiency.
elasticity A measure of the level of response to a specific change in market
conditions such as a change in price or income.
embodied energy The energy used in the process of extracting raw materials,
manufacturing components and transporting them to site.
endogenous variables These are economic factors which affect other aspects of a
theory or model from within. For example, the level of unemployment will affect
the amount of income tax collected. Contrast with exogenous variables.
entrepreneur The fourth factor of production involving human resources that
perform the functions of raising capital, organising, managing, assembling
the other factors of production (land, capital and labour), and making basic
business policy decisions. The entrepreneur is a risk-taker.
environment In modern economic analysis, environmental assets such as clean air,
species diversity and tropical rainforests are considered alongside the allocation
of resources of traditional economic goods and services. Also see the entry for
environmental policy.
environmental economics The origins of environmental economics date back to the
1960s when green thinking became a popular concern. A central tenet of the
environmental economics school is that as the economic system cannot operate
without the support of the environment, financial value should be placed on
environmental services.
environmental policy Governments across the world are accepting responsibility for
the global and local problems that arise as a result of market failure. In the UK,
for example, the government has set out a strategy for sustainable development
in the general economy (DETR 1999) as well as a sustainable strategy for the
construction industry (DETR 2000).
equilibrium A situation in which the plans of buyers and sellers exactly coincide, so
that there is neither excess supply nor excess demand.
equilibrium price The price that clears the market, at which there is no excess
quantity demanded or supplied. In other words, the price at which the demand
curve intersects the supply curve. Also known as the market clearing price.