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DIAMOND-WATER PARADOX: The perplexing observation that water, which is more useful than diamonds, has a lower price. If price is related to utility, how can this occur? This paradox was first proposed by classical economists in the 19th century and was subsequently used as a stepping stone for developing the notion of marginal utility and the role it plays in the demand price of a good. The paradox is magically cleared up with an understanding of marginal utility and total utility. People are willing to pay a higher price for goods with greater marginal utility. As such, water which is plentiful has enormous total utility, but a low price because of a low marginal utility. Diamonds, however, have less total utility because they are less plentiful, but a high price because of a high marginal utility.
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SEIGNIORAGE The difference between the face value, or value in exchange, of money and the cost of producing the money. This seigniorage is effectively the profit government generates from producing currency--printing paper bills or minting metal coins. That is, government effectively "makes money" by making money.
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WHITE GULLIBON
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Today, you are likely to spend a great deal of time at a dollar discount store seeking to buy either a green and yellow striped sweater vest or a Boston Red Sox baseball cap. Be on the lookout for slow moving vehicles with darkened windows.
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Francis Bacon (1561-1626), a champion of the scientific method, died when he caught a severe cold while attempting to preserve a chicken by filling it with snow.
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"An organization's ability to learn, and translate that learning into action rapidly, is the ultimate competitive business advantage. " -- Jack Welch, General Electric chief executive
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ABA
American Bankers Association, Associate in Business Administration
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