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SCARCITY RENT: The marginal opportunity cost imposed on future generations by extracting one more unit of a resource today. Scarcity rent is one of two costs the extraction of a finite resource imposes on society. The other is marginal extraction cost--the opportunity cost of resources employed in the extraction activity. Scarcity rent is the cost of "using up" a finite resource because benefits of the extracted resource are unavailable to future generations. Efficiency is achieved when the resource price--the benefit society is willing to pay for the resource today--is equal to the sum of marginal extraction cost and scarcity rent.
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Lesson 13: The Firm | Unit 2: Objectives
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Page: 7 of 24
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- The primary goal of a human consumer is thus to maximize utility.
- Utility maximization is the process of obtaining the highest possible level of utility from the consumption or use of goods and services.
- The primary goal of a business is really no different, in principle, than that of any consumer. The working presumption for business firms is that they seek to maximize profit.
- Profit maximization is the process of obtaining the highest possible level of profit through the production and sale of goods and services.
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MACROECONOMIC THEORIES Scientific theories that seek to explain phenomena associated with the macroeconomy. The primary phenomena investigated are unemployment, inflation, and the level of aggregate production. Macroeconomic theories also inevitably provide policy recommendations intended to improve the performance of the economy and to correct macroeconomic problems. A few of the more noted macroeconomic theories are: Classical economics, Keynesian economics, aggregate market (AS-AD) analysis, IS-LM analysis, Monetarism, and New Classical economics.
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The earliest known use of paper currency was about 1270 in China during the rule of Kubla Khan.
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"Nobody can be successful unless he loves his work. " -- David Sarnoff, TV pioneer
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WLS
Weighted Least Squares
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