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AFC: The abbreviation for average fixed cost, which is fixed cost per unit of output, found by dividing total fixed cost by the quantity of output. Average fixed cost is one of three related cost averages. The other two are average variable cost and avarage total cost. Average fixed cost decreases with larger quantities of output. Because fixed cost is FIXED and does not change with the quantity of output, a given cost is spread more thinly per unit as quantity increases. A thousand dollars of fixed cost averages out to $10 per unit if only 100 units are produced. But if 10,000 units are produced, then the average shrinks to a mere 10 cents per unit.
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Lesson 7: Market | Unit 4: Adjustment
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Page: 14 of 22
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A shortage exists if the quantity demanded is greater than the quantity supplied at the current market price.- A shortage exists if the market price is 30 cents.
- The quantity supplied is 200 tapes and the quantity demanded is 600 tapes, giving a shortage of 400 tapes.
- This shortage induces the price to rise up to the equilibrium level of 50 cents.
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LEAKAGES Non-consumption uses of aggregate income. The three uses of income grouped under the heading of leakages are saving, taxes, and imports. Leakages subtract from the core circular flow containing consumption, production, and income. The injections-leakages model is a Keynesian economics analysis that combines leakages with injections (investment expenditures, government purchases and exports) to identify the equilibrium level of aggregate production and income.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time at the confiscated property police auction hoping to buy either a computer that can play video games and burn DVDs or a black duffle bag with velcro closures. Be on the lookout for celebrities who speak directly to you through your television.
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The first U.S. fire insurance company was established by Benjamin Franklin in 1752 in Philadelphia.
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"The greatest things ever done on Earth have been done little by little. " -- William Jennings Bryan
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WPO
Weakly Pareto Optimal
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