Term
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Definition
| the pleasure or satisfaction people get from doing or consuming something |
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Term
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Definition
| total satisfaction one gets from consuming a product |
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Term
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Definition
| the satisfaction one gets from consuming one additional unit of a product above and beyond what one has consumed up to that point |
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Term
| principle of diminishing marginal utility |
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Definition
| as you consume more of a good, after some point, the marginal utility from each additional unit consumed, other things equal |
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Term
| principle of rational choice |
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Definition
| spend the money on those goods that give you the most marginal utility per dollar |
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Term
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Definition
| when the ratios of the marginal utility of the two goods are equal |
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Term
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Definition
| the reduction in quality demanded because we're poorer |
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Term
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Definition
| the reduction in quantity demanded because relative price has risen |
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Term
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Definition
| the consumption of goods not for one's direct pleasure, but simply to show off to others |
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Term
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Definition
| the first person only gets the money if the other person accepts the offer. if the second person does not accept, they both get nothing |
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Term
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Definition
| an individuals action are very much influenced by the current situation, even when that reasonably does not seem to be to be very important to the decision |
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Term
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Definition
| transformation of factors into goods and services |
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Term
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Definition
| an economic institution that transforms factors of production into goods and services |
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Term
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Definition
| toatal revenue - total cost |
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Term
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Definition
| explicit payments to the facteors of production plus the opportunity cost of the factors provided by the owners of the firm |
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Term
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Definition
| the amoutna firm recieves for selling its product or service plus any increase in the value of the assets owned by the firm |
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Term
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Definition
| (explicit and implicit revenue) - (explicit and implicit costs) |
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Term
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Definition
| A frim chooses among all possible production techniques |
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Term
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Definition
| the firm is constrained in regard to what production decisions it can make |
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Term
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Definition
| a table showing the output resulting from various combinations of factors of production or inputs |
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Term
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Definition
| the additional output that will be forthcoming from an additional worker, other inputs constant |
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Term
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Definition
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Term
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Definition
| the relationship between the inputs (factors of production) and outputs |
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Term
| Law of diminishing marginal productivity |
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Definition
| as more and more of a veriable input are added to an existing fixed input, eventually the additional output one gets from that additional input is going to fall |
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Term
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Definition
| costs that are spent and cannot be changed in the period of time under consideration |
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Term
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Definition
| Costs that change as output changes |
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Term
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Definition
| total cost divided by the quantity produced |
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Term
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Definition
| the increase (decrease) in total cost from increasing (decreasing) the level of output by one unit |
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Definition
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Definition
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| as few inputs are needed to produce a given output |
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Term
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Definition
| when long run averaage total costs decrease as output increases |
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Term
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Definition
| the cost of an indivisible input for whic a certain minimum amount of production must be undertaken before the input becomes economically feasible to use |
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Term
| minimum efficient level of production |
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Definition
| amoutn of production that spreads setup costs out sufficiently for a firm to undertake production profitably |
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Term
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Definition
| when long run average costs increase as output increases |
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Term
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Definition
| costs incurred by the organizer of production in seeing to it that the employees do what they're supposed to do |
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Term
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Definition
| the feelings of friendship and being part of a team that bring out peoples best efforts |
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Term
| Constant returns to scale |
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Definition
| where long run average total costs do not change with an increase in output |
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Term
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Definition
| an individual who sees an opportunity an item at a price higher than the average cost of producing |
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Term
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Definition
| when the costs of producing products are interdependent so that its less costly for a firm to produce one good when its already producing another |
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Term
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Definition
| as we do something we learn what works and what doesnt, and over time we become more profficient at it |
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Term
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Definition
| a measure of the decline in the value of an asset that occurs over time |
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Term
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Definition
| a firm who takes a price determined b market supply and demand as given |
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Term
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Definition
| social, political, or economic impediments that prevent firms from entering the market |
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Term
| MARGINAL revenue (Market Price) |
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Definition
| the change in revenue associated with the change in quantity |
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Term
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Definition
| the change in cost associated with the change in quantity |
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Term
| Profit maximizing condition |
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Definition
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Term
| Profit maximizing condition |
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Definition
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Term
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Definition
| the point below where a firm will be better off temporarily shutting down instead of staying in business |
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Term
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Definition
| horizontal sum of all the firms marginal cost curves |
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