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LOSS MINIMIZATION RULE: A rule stating that firm minimizes economic loss by producing output in the short run that equates marginal revenue and marginal cost if price is less than average total cost but greater than average variable cost. In the short run, a firm incurs total fixed cost whether or not it produces any output. As such, if the market price is falls below average total cost, it must decide if the economic loss from producing the quantity of output that equates marginal revenue and marginal cost is more or less than the economic loss incurred with shutting down production in the short run (which is equal to total fixed cost).
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Lesson 10: Gross Domestic Product | Unit 2: Looking Behind GDP
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Page: 11 of 25
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Economic production that involves market transactions is the foundation of GDP. This is area E. It is combined with area B to measure GDP. A summary of measuring GDP: - Start with all market transactions of record.
- Toss out past and future production in Slice A.
- Add the estimated value of nonmarket 'in-kind' production in Slice B.
- Don't include the value of nonmarket production in chunk C and the value of illegal production in chunk D.
- Combine areas B and E for the final tabulation of GDP.
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ENTREPRENEURIAL BEHAVIOR A preference for changing the status quo over maintaining it based on relatively greater satisfaction generated by novel information over redundant information. Entrepreneurial behavior underlies the inclination to undertake invention and innovation, including the creation of something new as well as the distribution and adoption of the new throughout society. It is the behavior most likely exhibited by entrepreneurship. An alternative is managerial behavior, which is a preference for maintaining the status quo over changing it.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store seeking to buy either a set of tires or a birthday gift for your grandfather. Be on the lookout for gnomes hiding in cypress trees.
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Ragnar Frisch and Jan Tinbergen were the 1st Nobel Prize winners in Economics in 1969.
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"A leader, once convinced that a particular course of action is the right one, must . . . be undaunted when the going gets tough." -- President Ronald Reagan
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AAT
Association of Accounting Technicians
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