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THREE-SECTOR INJECTIONS-LEAKAGES MODEL: A model used to identify equilibrium in Keynesian economics based on injections (investment and government purchases) and leakages (saving and taxes) for the three domestic sectors (household, business, and government). Equilibrium is achieved at the intersection of the saving and tax line, S + T, and the investment and government purchases line, I + G.
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Lesson 23: Factor Market Equilibrium | Unit 4: Monopsony
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Page: 18 of 24
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- The primary condition for profit-maximization AND efficiency derived from the analysis of the firm's labor employment is:
- MRP = MFC > W
- As such, marginal revenue product (MRP) is also greater than the factor price (W).
- This means the market is NOT efficient.
- Consider the profit-maximizing employment of labor services illustrated in this diagram.
- Clearly wage paid in monopsony is lower and the quantity of factor services employed is less.
- The conclusion is that monopsony, like it's selling counterpart monopoly, is NOT efficient.
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INVESTMENT EXPENDITURES Expenditures made by the business sector on final goods and services, or gross domestic product, especially the purchase of productive capital goods. Investment expenditures play a central role in macroeconomic activity affecting both short-run business cycles and long-run economic growth. These expenditures reflect the general act of investment involving foregoing current satisfaction to produce capital goods and are officially measured by gross private domestic investment. These are one of four expenditures on gross domestic product. The other three are consumption expenditures, government purchases, and net exports.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time at a garage sale trying to buy either one of those memory foam pillows or a remote controlled train set. Be on the lookout for small children selling products door-to-door.
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Post WWI induced hyperinflation in German in the early 1900s raised prices by 726 million times from 1918 to 1923.
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"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
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SELA
Latin American Economic System
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