|
|
LAW OF DIMINISHING MARGINAL RETURNS: A principle stating that as more and more of a variable input is combined with a fixed input in short-run production, the marginal product of the variable input eventually declines. This is THE economic principle underlying the analysis of short-run production for a firm. Among a host of other things, it offers an explanation for the upward-sloping market supply curve. How does the law of diminishing marginal returns help us understand supply? The law of supply and the upward-sloping supply curve indicate that a firm needs to receive higher prices to produce and sell larger quantities. Why do they need higher prices?
Visit the GLOSS*arama
|
|
|
|
|
Lesson 13: Aggregate Demand | Unit 3: The Curve
|
Page: 12 of 22
|
|
Topic:
Real-Balance Effect
|
|
|
The amount of production we purchase depends on how much money we have and the price of the production we want to buy.- A higher price level means money can buy less real production.
- A lower price level means money can buy more real production.
The real-balance effect is when a change in the price level changes aggregate expenditures on real production because the purchasing power of money changes.- Real refers to the real purchasing power of money.
- Balances refers to the balance of money we have to purchase.
|
|
|
|
|
|
|
UTILITY ANALYSIS A subset of consumer demand theory that analysis consumer behavior and market demand using total utility and marginal utility. The key principle of utility analysis is the law of diminishing marginal utility, which offers an explanation for the law of demand and the negative slope of the demand curve.
Complete Entry | Visit the WEB*pedia |
|
|
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.
Your Complete Scope
This isn't me! What am I?
|
|
|
The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
|
|
|
"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
|
|
MSE
Minimum Efficient Scale
|
|
|
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.
User Feedback
|
|
