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PHYSICAL CAPITAL: The synthetic resources used to produce goods and services. Capital is a factor of production that has been previously produced. Unlike other types of material items, capital does not become a part of the product. This should be compared with financial capital and human capital.
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Lesson 14: Production | Unit 4: Long-Run Production
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Page: 21 of 25
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Topic:
Constant Returns To Scale
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- Constant returns to scale:
- Constant returns to scale result when a given proportional increase in all inputs results in a proportional increase in production.
- The scale of production in which increasing returns to scale are balanced by decreasing returns to scale is termed the minimum efficient scale.
- It is the production scale in which a firm is taking greatest advantage of increasing returns without overly suffering from decreasing returns.
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AGGREGATE DEMAND AND MARKET DEMAND The aggregate demand curve, or AD curve, has similarities to, but differences from, the standard market demand curve. Both are negatively sloped. Both relate price and quantity. However, the market demand curve is negatively sloped because of the income and substitution effects and the aggregate demand curve is negatively sloped because of the real-balance, interest-rate, and net-export effects.
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In his older years, Andrew Carnegie seldom carried money because he was offended by its sight and touch.
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"What gets measured gets done." -- Peter Drucker, educator
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ATM
Automated Teller Machine
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