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INDUCED CONSUMPTION: Household consumption expenditures that depend on income or production (especially disposable, national income, or gross national product). An increase in household disposable income triggers an increase in induced consumption expenditures. Induced consumption is graphically depicted as the slope of the consumption or propensity-to-consume line, and are measured by the marginal propensity to consume. The induced relation between income and consumption, as well as other induced expenditures, form the foundation of the multiplier effect triggered by changes in autonomous expenditures.
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AVERAGE FIXED COST Total fixed cost per unit of output, found by dividing total fixed cost by the quantity of output. When compared with price (per unit revenue), average fixed cost (AFC) indicates whether or not a profit-maximizing firm should shutdown production in the short run. Average fixed cost is one of three average cost concepts important to short-run production analysis. The other two are average total cost and average variable cost. A related concept is marginal cost.
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In 1914, Ford paid workers who were age 22 or older $5 per day -- double the average wage offered by other car factories.
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"The difference between the impossible and the possible lies in a person's determination. " -- Tommy Lasorda
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NEDC
National Economic Development Council
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