Paul Samuelson in the context of "Edwin Bidwell Wilson"

A price is the (usually not negative) quantity of payment or compensation expected, required, or given by one party to another in return for goods or services. In some situations, especially when the product is a service rather than a physical good, the price for the service may be called something else such as "rent" or "tuition". Prices are influenced by production costs, supply of the desired product, and demand for the product. A price may be determined by a monopolist or may be imposed on the firm by market conditions.

Price can be quoted in currency, quantities of goods or vouchers.

In economics, a good is said to be rivalrous or a rival if its consumption by one consumer prevents simultaneous consumption by other consumers, or if consumption by one party reduces the ability of another party to consume it. A good is considered non-rivalrous or non-rival if, for any level of production, the cost of providing it to a marginal (additional) individual is zero. A good is anti-rivalrous and inclusive if each person benefits more when other people consume it.

A good can be placed along a continuum from rivalrous through non-rivalrous to anti-rivalrous. The distinction between rivalrous and non-rivalrous is sometimes referred to as jointness of supply or subtractable or non-subtractable. Economist Paul Samuelson made the distinction between private and public goods in 1954 by introducing the concept of nonrival consumption. Economist Richard Musgrave followed on and added rivalry and excludability as criteria for defining consumption goods in 1959 and 1969.  

In economics, excludability is the degree to which a good, service or resource can be limited to only paying customers, or conversely, the degree to which a supplier, producer or other managing body (e.g. a government) can prevent consumption of a good. In economics, a good, service or resource is broadly assigned two fundamental characteristics; a degree of excludability and a degree of rivalry.

Excludability was originally proposed in 1954 by American economist Paul Samuelson where he formalised the concept now known as public goods, i.e. goods that are both non-rivalrous and non-excludable. Samuelson additionally highlighted the market failure of the free-rider problem that can occur with non-excludable goods. Samuelson's theory of good classification was then further expanded upon by Richard Musgrave in 1959, Garrett Hardin in 1968 who expanded upon another key market inefficiency of non-excludable goods; the tragedy of the commons.

Economic systems as a type of social system must confront and solve the three fundamental economic problems:

• What kinds and quantities of goods shall be produced, "how much and which of alternative goods and services shall be produced?"
• How shall goods be produced? ..by whom and with what resources (using what technology)...?"
• For whom are the goods or services produced? Who benefits? Samuelson rephrased this question as "how is the total of the national product to be distributed among different individuals and families?"

Economic systems solve these problems in several ways:"... by custom and instinct; by command and centralized control (in planned economies) and in mixed economies that "...uses both market signals and government directives to allocate goods and resources." The latter is variously defined as an economic system blending elements of a market economy with elements of a planned economy, free markets with state interventionism, or private enterprise with public enterprise..."

Revealed preference theory, pioneered by economist Paul Anthony Samuelson in 1938, is a method of analyzing choices made by individuals, mostly used for comparing the influence of policies on consumer behavior. Revealed preference models assume that the preferences of consumers can be revealed by their purchasing habits.

Revealed preference theory arose because existing theories of consumer demand were based on a diminishing marginal rate of substitution (MRS). This diminishing MRS relied on the assumption that consumers make consumption decisions to maximise their utility. While utility maximisation was not a controversial assumption, the underlying utility functions could not be measured with great certainty. Revealed preference theory was a means to reconcile demand theory by defining utility functions by observing behaviour.

The invisible hand is a metaphor inspired by the Scottish economist and moral philosopher Adam Smith that describes the incentives which free markets sometimes create for self-interested people to accidentally act in the public interest, even when this is not something they intended. Smith originally mentioned the term in two specific, but different, economic examples. It is used once in his Theory of Moral Sentiments when discussing a hypothetical example of wealth being concentrated in the hands of one person, who wastes his wealth, but thereby employs others. More famously, it is also used once in his Wealth of Nations, when arguing that governments do not normally need to force international traders to invest in their own home country. In both cases, Adam Smith speaks of an invisible hand, never of the invisible hand.

Going far beyond the original intent of Smith's metaphor, twentieth-century economists, especially Paul Samuelson, popularized the use of the term to refer to a more general and abstract conclusion that truly free markets are self-regulating systems that always tend to create economically optimal outcomes, which in turn cannot be improved upon by government intervention. The idea of trade and market exchange perfectly channelling self-interest toward socially desirable ends is a central justification for newer versions of the laissez-faire economic philosophy which lie behind neoclassical economics.

The Phillips curve is a representation of the relationship between unemployment and inflation in the macroeconomy, where a tradeoff between low unemployment and price stability exists. Identified by economist Bill Phillips, the curve shows a relationship between lowering unemployment with increasing wages in an economy. While Phillips did not directly link employment and inflation, this was a trivial deduction from his statistical findings. Classical economists Paul Samuelson and Robert Solow made the connection explicit, followed by the theoretical arguments developed by Milton Friedman and Edmund Phelps.

While there is a short-run tradeoff between unemployment and inflation, it has not been observed in the long run. In 1967 and 1968, Friedman and Phelps asserted that the Phillips curve was only applicable in the short run and that, in the long run, inflationary policies would not decrease unemployment. Friedman correctly predicted the stagflation of the 1970s.

The Society of Fellows is a group of scholars selected at the beginnings of their careers by Harvard University for their potential to advance academic wisdom, upon whom are bestowed distinctive opportunities to foster their individual and intellectual growth. Junior fellows are appointed by senior fellows based upon previous academic accomplishments and receive generous financial support for three years while they conduct independent research at Harvard University in any discipline, without being required to meet formal degree requirements or to be graded in any way. The only stipulation is that they maintain primary residence in Cambridge, Massachusetts, for the duration of their fellowship. Membership in the society is for life.

The society has contributed numerous scholars to the Harvard faculty and thus significantly influenced the tenor of discourse at the university. Among its best-known members are philosopher W. V. O. Quine, Jf '36; behaviorist B. F. Skinner, Jf '36; double Nobel laureate John Bardeen, Jf '38; economist Paul Samuelson, Jf '40; historian Arthur M. Schlesinger, Jr., Jf '43; presidential advisor McGeorge Bundy, Jf '48; historian and philosopher of science Thomas Kuhn, Jf '51; linguist and activist Noam Chomsky, Jf '55; biologist E. O. Wilson, Jf '56; cognitive scientist Marvin Minsky, Jf '57; former dean of the Harvard faculty, economist Henry Rosovsky, Jf '57; economist and whistleblower Daniel Ellsberg, Jf '59; philosopher Saul Kripke, Jf '66; ethnographer and photographer Bruce Jackson, Jf '67; Fields Medal-winning theoretical physicist Ed Witten, Jf '81; and writer, critic, and editor Leon Wieseltier, Jf '82.

An index fund is a mutual fund or exchange-traded fund (ETF) designed to follow certain preset rules so that it can replicate the performance of a specified basket of underlying securities (most often a stock market index or a bond market index).

The main advantage of index funds for investors is that they are difficult to outperform consistently. Academic research has consistently found that most active investors (stock pickers) within a given market segment underperform the relevant index after fees and taxes. Investors also do not need to spend time analyzing various stocks or stock portfolios. Thus investors, academicians, and authors such as Warren Buffett, John C. Bogle, Jack Brennan, Paul Samuelson, Burton Malkiel, David Swensen, Benjamin Graham, Gene Fama, William J. Bernstein, and Andrew Tobias have long been strong proponents of index funds.

Marie-Esprit-Léon Walras (French: [valʁas]; 16 December 1834 – 5 January 1910) was a French mathematical economist and Georgist. He formulated the marginal theory of value (independently of William Stanley Jevons and Carl Menger) and pioneered the development of general equilibrium theory. Walras is best known for his book Éléments d'économie politique pure, a work that has contributed greatly to the mathematization of economics through the concept of general equilibrium.

For Walras, exchanges only take place after a Walrasian tâtonnement (French for "trial and error"), guided by the auctioneer, has made it possible to reach market equilibrium. It was the general equilibrium obtained from a single hypothesis, rarity, that led Joseph Schumpeter to consider him "the greatest of all economists". The notion of general equilibrium was very quickly adopted by major economists such as Vilfredo Pareto, Knut Wicksell and Gustav Cassel. John Hicks and Paul Samuelson used the Walrasian contribution in the elaboration of the neoclassical synthesis. For their part, Kenneth Arrow and Gérard Debreu, from the perspective of a logician and a mathematician, determined the conditions necessary for equilibrium.

This list of Massachusetts Institute of Technology faculty includes current, emeritus, former, and deceased professors, lecturers, and researchers at the Massachusetts Institute of Technology. Faculty members who have become Institute Professors, Nobel Laureates, MacArthur Fellows, National Medal of Science recipients, or have earned other significant awards and made significant contributions are listed below.