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SHORTAGE: A condition in the market in which the quantity demanded is greater than the quantity supplied at the existing price. A shortage occasionally goes by the terms excess demand and sellers' market. A shortage causes an increase in the equilibrium price.
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Lesson 14: Production | Unit 3: Product Curves
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Page: 14 of 25
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- How total, average, and marginal product react to changes in the variable input is determined by the law of diminishing marginal returns:
MP curve - Note the "hump-shape" of the curve, with increasing marginal product followed by decreasing then negative marginal product.
- The negatively-sloped portion of the curve is due to the law of diminishing marginal returns.
TP curve - Note that marginal product is the slope of the TP curve.
AP curve - Marginal product and average product are related by the average-marginal rule, which applies to the averages and marginals for any given variable.
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MARGINAL PROPENSITY FOR GOVERNMENT PURCHASES The change in government purchases induced by a change in income or production (national income or gross domestic product). The marginal propensity for government purchases (abbreviated MPG) is another term for the slope of the government purchases line and is calculated as the change in government purchases divided by the change in income or production. The MPG plays a role in Keynesian economics. It augments the slope of the aggregate expenditures line and is part of the multiplier process. A related marginal measure is the marginal propensity to consume.
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GRAY SKITTERY
[What's This?]
Today, you are likely to spend a great deal of time strolling around a discount warehouse buying club wanting to buy either a tall storage cabinet with five shelves and a secure lock or a birthday greeting card for your grandmother. Be on the lookout for cardboard boxes.
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"The past is a foreign country; they do things differently there." -- Leslie Poles Hartley, Writer
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