The concept that software will look in several folders, in the order stored as the path, to find which programs should be allowed to run.

Although the path variable is something that is set in the (or shell) portion of OS X due to it's UNIX heritage, the concept of a PATH is explicitly rejected by the Finder and the graphical user interface on the Mac.

Yes, the standard convention is to place programs in the /Applications folder for system apps and ~/Applications for user-specific apps, but the Finder will execute any program that is selected to open by double clicking the icon for the app or selecting it and choosing Open... from the finder File menu.

Note that path can also be used in the sense of the complete absolute directory and file name in the file system or URL

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