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MARGINAL UTILITY CURVE: A curve illustrating the relationship between the marginal utility obtained from consuming a good and the quantity of the good consumed. The marginal utility curve can be used to derived the demand curve, which is discussed in detail in the entry on marginal utility and demand. If you've nothing better to do for the moment, let's derive a marginal utility curve.
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Lesson 1: Economic Basics | Unit 3: The Economy
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Page: 8 of 18
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Topic:
A Mixed Economy: Markets and Government
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Markets do an effective (and efficient) job of answering the three questions of allocation--most of the time.- Markets are the VOLUNTARY exchange of goods and services.
- A pure market economy is an economy that uses nothing but markets to allocate resources.
- A pure market economy is a useful theoretical benchmark.
Market responses to the allocation questions:- What? Resources are used to produce goods with the highest prices.
- How? Goods are produced using the combination of resource with the lowest prices.
- For Whom? People with more income buy more goods.
Government also helps answer the three questions of allocation.- Government allocation is INVOLUNTARY. It sets the laws and rules.
- A pure command economy is an economy that uses nothing but government to allocate resources.
- A pure command economy is another useful theoretical benchmark.
Government responses to the allocation questions:- What? When government spends taxes, it dictates what goods will be produced.
- How? Government has laws and rules that specify how resources will be used to produce goods.
- For Whom? Government collects taxes from some people and distributes them among other people.
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PERFECT COMPETITION, DEMAND The demand curve for the output produced by a perfectly competitive firm is perfectly elastic at the going market price. The firm can sell all of the output that it wants at this price because it is a relatively small part of the market. As a price taker, the firm has no ability to charge a higher price and no reason to charge a lower one. The market price facing a perfectly competitive firm is also average revenue and, most important, marginal revenue.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time searching for rummage sales looking to buy either clothing for your kitty cats or a set of luggage without wheels. Be on the lookout for vindictive digital clocks with revenge on their minds.
Your Complete Scope
This isn't me! What am I?
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The New York Stock Exchange was established by a group of investors in New York City in 1817 under a buttonwood tree at the end of a little road named Wall Street.
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"We succeed in enterprises (that) demand the positive qualities we possess, but we excel in those (that) can also make use of our defects." -- Alexis de Tocqueville, Statesman
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AOM
Australian Options Market
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