Here are Economics Terms beginning with L

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Labor is one of the four factors of production, labor can be manual or mental. It is a vital input into the production process and is often used as the variable factor of production.

Labor force the total amount of labor willing and able to work at the prevailing wage rate. It consists of those working at the current page plus those that are employed at the going wage and those who wish to work at the going wage but are unable to find jobs.

Land is one of the four factors of production, it includes not only physical land but also raw materials provided by nature such minerals and metals.

Law of comparative advantage is a law devised by the economist David Ricardo. A country is said to have a comparative advantage in a good or service if it can produce that good or service at a lower opportunity cost than its trading partner.

Law of demand a fundamental law of economics that predicts that "other things being equal" a fall in price will lead to a rise in the quantity of a good or service demands. Conversely, a rise in price will lead to a fall in the quantity of a good or service demanded.

Law of diminishing returns is a short run theory which predicts that as more of a valiable factor of production (e.g. labor) is added to a given amount of a fixed factor of production (e.g. capital) then after a certain point the marginal product  the extra ouput from employing one unit of labor) of the variable factor of production will start to fall.

Law of large numbers predicts that as we increase the size of a population or smaple then the average behaviour of the sample or population will become more predictable.

Lender of the last resort is an emergency lending facility that will be provided by a central bank to commerical banks so as to ensure that they have sufficient cash to fund their daily operations if need be.

Liabilities are the legal claims/obligation against a company or institution arising from past transactions or events.

Libertarian School a school of thought that advoacates a large degree of freedo for economic agents to pursue economic activities of their choosing and also a very limited role for government in the economy. It advocates private ownership of the means of production wherever possible.

Limit pricing is a pricing policy practiced by monopoly and oligopoly firms which involves setting a lower price than the short run profit maximising price so as to deter new firms from entering the industry. The liomit price is effectively a barier to entry.

Liquidity refers to the ability to speedily convert a financial or other asset into cash at a low cost. Treasury bills are considered to be a liquid financial asset for their owners since they can be speedily tansformed into cash at a very low cost since they have a low bid-offer spread.

Liquidity preference theory is a theory of the demand to hold money. The price of holding money is the interest rate foregone.

Liquidity ratio is the ratio of banks liquid assets such as cash and bills to total assets.

Liquidity trap is a Keynesian idea that at a certain low level of interest rates attempts to expand economic activity through expnasionary monetary policy will fail to work. This is because the money will be willing held as idle balances and the interest rate will not fall any lower and as such there will be no stimulus to economic activity.

Lock-out when an employer lays of its workers in an industrial dispute until such time as a satisfactory agreement on wages and conditions is made between the employer and the workers.

Long run is the period of time when all factors of production (land,labor, capital and the entrepeneur) become variable in the production process. As opposed to the short run when some variables eg capital is fixed and other factors like labor are variable.

Long run average cost (LRAC) is the average cost of production of a firm when all factors of production are variable. Falling long run average costs as output rises are called economies of scale, while rises in long run average cost when ouput rises are called diseconomies of scale.

Long run neutrality of money is an economic proposition that changes in the money supply in the long run have no influence on the real national icome or level of employment. Increases in the money supply in the long run serve only to raise the aggregate level of prices.

Long run profit maximization is an alternative concept to the idea of short run profit maxmization. According the theory, managers will aim to maximise their long run rather than short run profitability by focussing on maximizing the gap between their long run revenues and long run costs.

Lorenz curve shows the percentage share of the national income earnt by a given percentage of the population starting with the poorest to the richest. For example, the bottom 10% might have 3% of the income while the top 10% might have 30% of the income.