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AGGLOMERATION ECONOMIES: A reduction in production cost the results when related firms locate near one another. Firms can be related as competitors in the same industry, by using the same inputs, or through providing output to the same demographic group. The fashion industry, for example, experiences agglomeration economies because they can share specialized inputs (photographers, models) that would be too expensive to employ full time. Retail stores have agglomeration economies when located in shopping malls because they have access to a large group of potential customers with lower advertising cost. Agglomeration economies is given as one of the primary reasons for the emergence of urban areas.
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Lesson 13: Aggregate Demand | Unit 2: Doing More
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Page: 5 of 22
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Topic:
Consumption Expenditures
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The household sector is the group responsible for the consumption part of the aggregate expenditures. Consumption is the expenditures by the household sector on final goods and services undertaken in a given time period. Three specific categories of consumption: - Nondurable goods Goods lasting less than a year.
- Durable goods Goods lasting more than a year.
- Services Intangible activities.
Each consumption category plays a different role in the macroeconomy.
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RATIONAL ABSTENTION The decision NOT to do something (such as vote in an election) because the cost of taking the action is more than the expected benefit. The rational decision to refrain from an endeavor is a straightforward application of utility maximization and along with the related notion of rational ignorance, is a source of voter apathy and government inefficiency.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time wandering around the downtown area looking to buy either a coffee cup commemorating next Thursday or a replacement remote control for your stereo system. Be on the lookout for jovial bank tellers.
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This isn't me! What am I?
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The average bank teller loses about $250 every year.
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"The best way to cheer yourself up is to try to cheer somebody else up." -- Mark Twain
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QJE
Quarterly Journal of Economics
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