Term
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Definition
| The ability and willingness to sell (produce) specific quantities of a good at alternative prices in a given time period. |
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Definition
| Resource inputs used to produce goods and services, e.g., land, labor, capital, entreprenuership. |
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Definition
| A technological relationship expressing the maximum quantity of a good attainable from different combinations of factor inputs. |
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Term
| Marginal Physical Product (MPP) |
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Definition
| The change in total output associated with one additional unit of input. |
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Term
| Law of Diminishing Returns |
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Definition
| The marginal physical product of a variable input declines as more of it is employed with a given quantity of other (fixed) inputs. |
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Term
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Definition
| The period in which the quantity (and quality) of some inputs cannot be changed. |
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Term
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Definition
| A period of time long enough for all inputs to be varied (no fixed costs). |
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Term
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Definition
| The difference between total revenue and total cost. |
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Term
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Definition
| The market value of all resources used to produce a good or service. |
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Term
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Definition
| Costs of production that do not change when the rate of output as altered, e.g., the cost of basic plant and equipment. |
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Term
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Definition
| Costs of production that change when the rate of output is altered, e.g., labor and material costs. |
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Term
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Definition
| Total cost divided by the quantity produced in a given time period. |
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Term
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Definition
| The increase in total cost associated with a one-unit increase in production. |
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Term
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Definition
| The selection of the short-run rate of output (with existing plant and equipment). |
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Term
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Definition
| The decision to build, buy, or lease plant and equipment: to enter or exit an industy. |
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Term
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Definition
| The value of all resources used to produce a good or service: opportunity cost. |
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Term
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Definition
| The difference between total revenue and total cost. |
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Term
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Definition
| The number and relative size of firms in an industry. |
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Term
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Definition
| A firm without market power, with no ability to alter the market price of the goods it produces. |
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Term
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Definition
| A market in which no buyer or seller has market power. |
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Term
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Definition
| A firm that produces the entire market supply of a particular good or service. |
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Term
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Definition
| The ability to alter the market price of a good or service. |
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Term
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Definition
| The price of a product multiplied by the quantity sold in a given time period, p x q. |
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Term
| Competitive Profit-Maximization Rule |
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Definition
| Produce at that rate of output where price equals marginal cost. |
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Term
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Definition
| The total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period. |
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Term
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Definition
| The price at which the quantity of a good demanded in a given time period equals the quantity supplied. |
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Term
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Definition
| Obstacles that make it difficult or impossible for would-be producers to enter a particular market, e.g., patents. |
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Term
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Definition
| The use of market prices and sales to signal desired outputs (or resource allocations). |
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Term
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Definition
| The total quantities of a good or service people are willing and able to buy at alternative prices in a given time period; the sum of individual demands. |
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Term
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Definition
| Government grant of exclusive ownership of an innovation. |
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Term
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Definition
| The change in total revenue that results from a one-unit increase in quantity sold. |
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Term
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Definition
| Produce at that rate of output where marginal revenue equals marginal cost. |
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Term
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Definition
| Reductions in minimum average costs that come about through increases in the size (scale) of plant and equipment. |
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Term
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Definition
| An industry in which one firm can achieve economies of scale over the entire range of market supply. |
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Term
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Definition
| An imperfectly competitive industry subject to potential entry if prices or profits increase. |
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Term
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Definition
| The most desirable combination of output attainable with existing resources, technology, and social values. |
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Term
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Definition
| An imperfection in the market mechanism that prevents optimal outcomes. |
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Term
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Definition
| A good or service whose consumption by one person does not exclude consumption by others. |
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Term
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Definition
| A good or service whose consumption by one person excludes consumption by others. |
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Term
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Definition
| An individual who reaps direct benefits from someone else's purchase (consumption) of a public good. |
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Term
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Definition
| Costs (or benefits) of a market activity brone by a third party; the difference between the social and private costs (benefits) of a market activity. |
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Term
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Definition
| The full resource costs of an economic activity, including externalities. |
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Term
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Definition
| The costs of an economic activity directly borne by the immediate producer or consumer (excluding externalities). |
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Term
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Definition
| A fee imposed on polluters based on the quantity of pollution. |
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Term
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Definition
| Government intervention to alter market structure or prevent abuse of market power. |
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Term
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Definition
| Payments to individuals for which no current goods or services are exchanged, e.g., Social Security, welfare, unemployment benefits. |
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Term
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Definition
| Government intervention that fails to improve economic outcomes. |
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