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QUASI-RENT: The payment that is received by a resource of production activity over the opportunity cost in the short run. The notion of quasi-rent is similar to economic rent, or economic profit, which is payment or revenue received over opportunity cost. The key difference is that quasi-rent is a short-run phenomenon. While quasi-rent is "extra" payment received in the short run, such payment might be essential to keep the resource or production activity in the long run. An example is the quasi-rent received due to the patent on a technological innovation. In the short run, the revenue received can be considered as profit in excess of the opportunity cost of production. However, in the long run this extra revenue motivates innovators to develop new technology. Without quasi-rent the innovations would not occur.
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Lesson 16: Aggregate Shocks | Unit 1: Instability
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Page: 1 of 21
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The aggregate market is a useful analysis for the study of the macroeconomy and its adjustments.- The aggregate market tends toward equilibrium.
Short-Run Equilibrium:- Intersection of AD and SRAS curves.
- Expenditures on real output match production.
- Labor market is prone to be out of equilibrium.
Long-Run Equilibrium: - Intersection of AD and LRAS curves.
- Expenditures on real output match production.
- Labor market in equilibrium.
Real world changes can be analyzed by examining how the aggregate market adjusts toward equilibrium.
To examine aggregate market adjustments we need to make use of the ceteris paribus concept.- The aggregate market curves, AD, LRAS, and SRAS, are constructed assuming other things remain unchanged.
- The determinants of each curve, initially assumed constant, don't really stay unchanged, and they cause changes in the aggregate market.
- The purpose of this aggregate market analysis is to help us to understand why the macroeconomy tends to be unstable, volatile and prone toward business cycles.
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LAW A generally accepted, verified, proven, fundamental scientific relation. A law is a scientifically certified, thoroughly verified, cause-and-effect relation about the workings of the world. It has been tested and retested through the scientific method. The law of demand, law of increasing opportunity cost, and law of diminishing marginal utility are three fundamental (and extremely important) economic laws of nature.
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BLACK DISMALAPOD
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites hoping to buy either a country wreathe or galvanized steel storage shelves. Be on the lookout for a thesaurus filled with typos.
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The penny is the only coin minted by the U.S. government in which the "face" on the head looks to the right. All others face left.
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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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NLREG
Nonlinear Statistical Regression
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