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OKUN'S LAW: A relationship that says that the gap between actual and full employment output level of gross domestic product widens by 3.0% for each percentage point increase in the unemployment rate. When Arthur Okun discovered this empirical relationship he was on President Kennedy's Council of Economic Advisers (CEA). Okun cautioned that the relationship was valid only within unemployment rates of 3% and 7.5%.
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Lesson 13: The Firm | Unit 2: Objectives
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Page: 10 of 24
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Topic:
Natural Selection
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- If real world firms DON'T seek to maximize profit, then why do pointy-headed economists assume that firms DO seek to maximize profit when analyzing firm behavior?
- The answer lies with the concept of natural selection.
- Natural selection is the notion that firms best suited to the economic environment on the ones that tend to survive.
- It's probably true that individual firms do not consciously try to maximize profit.
- But it's also true that decisions the surviving firms make end up with the same results as if the firms DID consciously try to maximize profit.
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MARKET EQUILIBRIUM, GRAPHICAL ANALYSIS An analysis of market equilibrium using a graph that combines a demand curve and a supply curve. A graphical analysis of the market is used to ascertain information such as market equilibrium, equilibrium price, equilibrium quantity, shortage, and surplus. This is one of two basic methods of analyzing market equilibrium. The other is a numerical analysis using demand and supply schedules.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time visiting every yard sale in a 30-mile radius hoping to buy either a velvet painting of Elvis Presley or a wall poster commemorating yesterday. Be on the lookout for broken fingernail clippers.
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This isn't me! What am I?
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It's estimated that the U.S. economy has about $20 million of counterfeit currency in circulation, less than 0.001 perecent of the total legal currency.
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"The time to repair the roof is when the sun is shining." -- John F. Kennedy, 35th U. S. president
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CARIFTA
Caribbean Free Trade Association
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