Term
What is in-kind compensation?
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Definition
Payment in the form of goods and services, rather than income.
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Term
Normally budget constraints are smooth, which means what?
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Definition
That as more Good X is consumed, one must always forego the other good, Y.
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Term
What is the slope of a horizontal line?
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Definition
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Term
What is the slope of a vertical line?
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Definition
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Term
What is the slope of a budget line?
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Definition
-Price of Good X / Price of Good Y
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Term
What are we interested in, when talking about Theory of the Firm?
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Definition
The firm's output decision, the firm's pricing behavior, and the firm's performance.
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Term
How is time defined when referring to Theory of the Firm?
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Definition
In terms of the variability of resources.
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Term
Some resources are more what then others?
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Definition
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Term
What type of resources are less variable than others?
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Definition
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Term
What is a short run?
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Definition
An insufficient amount of time to allow all inputs to vary, as the level of output varies.
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Term
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Definition
An amount of time that is sufficient to allow all inputs to vary as output level varies.
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Term
What is Variable Input?
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Definition
A factor of production who's quantity may be changed as output level changes in the short run.
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Term
What is a Fixed Input?
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Definition
A factor of production whose quantity cannot be changed as output levels vary in the short run.
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Term
What is the question of Short Run Costs?
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Definition
Given the capacity constraint, how does output level change as variable inputs are added to fixed inputs?
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Term
What is the Law of Diminishing Marginal Returns?
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Definition
As successive units of a variable resource, are added to a fixed resource, at some point the extra output attributable to each additional unit of the variable input/resource will decline.
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