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REAL WAGE: The inflation-adjusted purchasing power of the nominal wage. The real wage is commonly derived by dividing the nominal wage by the price level, indicates the physical quantities of goods and service that can be purchased with the nominal wage.
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Lesson 10: Utility and Demand | Unit 3: Complex Choices
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Page: 13 of 21
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In this unit, you should have learned about:- How a consumer maximizes utility by selecting between the consumption of two goods.
- That buyers will choose between two goods based on the marginal utility of each.
- Why buyers are faced with a constrained utility maximization decision based on prices and limited income.
- Alternative choices faced by a consumer that may or may not maximize utility.
- The rule of consumer equilibrium that states two goods are consumed until the marginal utilities generated by the last dollar are equal.
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FACTOR MARKET, EFFICIENCY A factor market achieves efficiency in the allocation of resources by equating marginal revenue product to factor price. Perfect competition, as the efficiency benchmark, is the only market structure to satisfy this criterion and achieve factor market efficiency. Monopsony, oligopsony, and monopsonistic competition are inefficient because they equate marginal revenue product to marginal factor cost, both of which are greater than factor price.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time looking for a downtown retail store seeking to buy either a really, really exciting, action-filled video game or a coffee cup commemorating the moon landing. Be on the lookout for letters from the Internal Revenue Service.
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One of the largest markets for gold in the United States is the manufacturing of class rings.
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"The world is not dangerous because of those who do harm but because of those who look at it without doing anything. " -- Albert Einstein, physicist
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MFC
Marginal Factor Cost
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