Term
| The satisfaction that a consumer receives from consuming some good or service. |
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Definition
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Term
| The total satisfaction resulting from the consumption of a given commodity by a consumer. |
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Definition
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Term
| The additional satisfaction obtained from consuming one additional unit of a commodity. |
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Term
| Income expressed in terms of the purchasing power of money income--that is, the quantity of goods and services that can be purchased with the money income. |
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Definition
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Term
| The change in the quantity of a good demanded resulting from a change in its relative price (holding real income constant). |
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Definition
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Term
| The change in the quantity of a good demanded resulting from a change in real income (holding relative prices constant). |
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Definition
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Term
| An inferior good for which the income effect outweighs the substitution effect so that the demand curve is positively sloped. |
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Definition
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Term
| The difference between the total value that consumers place on all units consumed of a commodity and the payment that they actually make to purchase that amount of the commodity. |
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Definition
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Term
| A firm that has one owner who is personally responsible for the firm's actions and debts. |
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Term
| A firm that has two or more joint owners, each of whom is personally responsible for the firm's actions and debts. |
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Definition
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Term
| A firm that has two classes of owners: general partners, who take part in managing the firm and are personally liable for the firm's actions and debts, and limited partners, who take no part in the management of the firm and risk only the money that they have invested. |
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Term
| A firm that has a legal existence separate from that of the owners. |
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Term
| A firm that is owned by the government. In the USA, these are called "state-owned enterprises". |
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Definition
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Term
| Firms that provide goods and services with the objective of just covering their costs. These are often called NGOs, for non-governmental organizations. |
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Definition
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Term
| Firms that have operations in more than one country. |
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Definition
| multinational enterprises |
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Term
| Profits paid out to shareholders of a corporation. |
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Definition
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Term
| A debt instrument carrying a specified amount, a schedule of interest payments, and (usually) a date for redemption of its face value. |
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Definition
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Term
| All outputs that are used as inputs by other producers in a further stage of production. |
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Definition
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Term
| A functional relation showing the maximum output that can be produced by any given combination of inputs. |
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Definition
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Term
| The difference between the revenues received from the sale of output and opportunity cost of the inputs used to make the output. Negative economic profits are called economic losses. |
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Definition
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Term
| A period of time in which the quantity of some inputs cannot be increased beyond the fixed amount that is available. |
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Definition
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Term
| An input whose quantity cannot be changed in the short run. |
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Definition
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Term
| An input whose quantity can be changed over the time period under consideration. |
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Definition
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Term
| A period of time in which all inputs may be varied, but the existing technology of production cannot be changed. |
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Definition
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Term
| A period of time that is long enough for the technological possibilities available to a firm to change. |
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Definition
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Term
| Total product divided by the number of units of the variable factor used in its production. |
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Definition
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Term
| The change in total output that results from using one more unit of a variable factor. |
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Definition
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Term
| The hypothesis that if increasing quantities of a variable factor are applied to a given quantity of fixed factors, the marginal product of the variable factor will eventually decrease. |
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Definition
| law of diminishing returns |
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Term
| The total cost of producing any given level of output; it can be divided into total fixed cost and total variable cost. |
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Definition
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Term
| All costs of production that do not vary with the level of output. |
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Definition
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Term
| Total costs of production that vary directly with the level of output. |
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Definition
| total variable cost (TVC) |
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Term
| Total cost of producing a given output divided by the number of units of output; it can also be calculated as the sum of average fixed costs and average variable costs. Synonymous with "unit cost" or "average cost". |
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Definition
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Term
| Total fixed cost divided by the number of units of output. |
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Definition
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Term
| Total variable cost divided by the number of units of output. |
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Definition
| average variable cost (AVC) |
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Term
| The increase in total cost resulting from increasing output by one unit. |
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Definition
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Term
| When a given number of inputs are combined in such a way as to maximize the level of output. |
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Definition
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Term
| An implication of profit maximization that firms choose the production method that produces any given level of output at the lowest possible cost. |
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Definition
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Term
| The principle that methods of production will change in relative prices of inputs change, with relatively more of the cheaper input and relatively less of the more expensive input being used. |
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Definition
| principle of substitution |
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Term
| The curve showing the lowest possible cost of producing each level of output when all inputs can be varied. |
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Definition
| long-run average cost (LRAC) curve |
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Term
| Reduction of long-run average costs resulting from an expansion in the scale of a firm's operations so that more of all inputs is being used. |
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Definition
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Term
| A situation in which output increases more than in proportion to inputs as the scale of a firm's production increases. A firm in this situation is a decreasing-cost firm. |
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Definition
| increasing returns (to scale) |
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Term
| The smallest output at which LRAC reaches its minimum. All available economies of scale have been realized at this point. |
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Definition
| minimum efficient scale (MES) |
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Term
| A situation in which output increases in proportion to inputs as the scale of production is increased. A firm in this situation is a constant-cost firm. |
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Definition
| constant returns (to scale) |
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Term
| A situation in which output increases less than in proportion to inputs as the scale of a firm's production increases. A firm in this situation is an increasing-cost firm. |
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Definition
| decreasing returns (to scale) |
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Term
| Any change in the available techniques of production. |
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Definition
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Term
| Output produced per unit of some input; frequently used to refer to labour productivity, measured by total output divided by the amount of labour used. |
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Definition
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Term
| All features of a market that affect the behaviour and performance of firms in that market, such as the number and size of the sellers, the extent of knowledge about one another's actions, the degree of freedom of entry, and the degree of product differentiation. |
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Definition
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Term
| The ability of a firm to influence the price of its product. |
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Definition
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Term
| A market structure in which all firms in an industry are price takers, and in which there is freedom of entry into and exit from the industry. |
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Definition
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Term
| In the eyes of purchasers, every unit of the product is identical to every other unit. |
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Definition
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Term
| A firm that can alter its output and sales without affecting the market price of its product. |
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Definition
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Term
| Total receipts from the sale of a product; price times quantity. |
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Definition
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Term
| Total revenue divided by quantity sold; that is the market price when all units are sold at the same price. |
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Definition
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Term
| The change in a firm's total revenue resulting from a change in its sales by one unit. |
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Definition
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Term
| The price that is equal to the minimum of a firm's average variable costs. At prices below this, a profit-maximizing firm will shut down and produce no output. |
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Definition
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Term
| For a competitive industry, the price and output at which industry demand equals short-run industry supply, and all firms are maximizing their profits. Either profits or losses for individual firms are possible. |
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Definition
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Term
| A market containing a single firm. |
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Definition
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Term
| A firm that is the only seller in a market. |
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Definition
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Term
| Any barrier to the entry of new firms into an industry--may be natural or created. |
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Definition
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Term
| An industry characterized by economies of scale sufficiently large that only one firm can cover its costs while producing at its minimum efficient scale. |
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Definition
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Term
| An organization of producers who agree to act as a single seller in order to maximize joint profits. |
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Definition
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Term
| The sale by one firm of different units of a product at two or more different prices for reasons not associated with differences in cost. |
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Definition
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Term
| The level of output that corresponds to the minimum short-run average total cost. |
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Definition
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