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Thursday
September 9, 2010

AmosWEB means Economics with a Touch of Whimsy!

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AD VALOREM TARIFF: A tax on imports that is specified as a percentage of the value of the good or service being taxed. This is one form of trade barrier that's intended to restrict imports into a country. Unlike nontariff barriers and quotas, which increase prices and thus revenue received by domestic producers, an 'ad valorem tariff' generates revenue for the government. For example: a 15 percent ad valorem tariff on a TV set worth $100 would pay a tariff of $15. One advantage of an ad valorem tariff is that it keeps up with changes in prices (mostly inflation).

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production possibilities curve (767)
law of increasing opportunity cost (544)
midpoint elasticity formula (496)
monopolistic competition (407)
expansionary fiscal policy (365)

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Lesson 16: Perfect Competition | Unit 2: Short-Run Output

Page: 10 of 28

Topic: Comparing Marginals

A look at the numbers:
Our focus at this point, however is on marginal revenue and marginal cost:
- Marginal Revenue (MR): The third column displays marginal revenue, which is a constant at the $4 per unit at every quantity of output. The price is fixed and so too is marginal revenue.
- Marginal Cost (MC): The fifth column presents the marginal cost the firm incurs in the short run for the production of units.
The analysis of total revenue indicates that the profit-maximizing production is 7 units, which generates a profit of $7.

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INCREASING-COST INDUSTRY

A perfectly competitive industry with a positively-sloped long-run industry supply curve that results because expansion of the industry causes higher production cost and resource prices. An increasing-cost industry occurs because the entry of new firms, prompted by an increase in demand, causes the long-run average cost curve of each firm to shift upward, which increases the minimum efficient scale of production.

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State of the ECONOMY

New Orders for Manufactured Goods
July 2010
$409.5 billion
Up 0.1% from June 2010 Econ & Statistics Adm

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ORANGE REBELOON
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Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius trying to buy either a video game player or an AC adapter that won't fry your computer. Be on the lookout for malfunctioning pocket calculators.
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