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NORMAL GOOD: A good for which an increase in income causes an increase in demand, or a rightward shift in the demand curve. If demand increases as income increases, it is a normal good or a good with a positive income elasticity of demand. A normal good is one of two alternatives falling within the income determinant of demand. The other is an inferior good.
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Lesson 14: Production | Unit 4: Long-Run Production
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Page: 20 of 25
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Topic:
Decreasing Returns To Scale
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- Decreasing returns to scale:
- Decreasing returns to scale result when a given proportional increase in all inputs results in a less than proportional increase in production.
- Two notable reasons why long-run production experiences decreasing returns to scale:
- Management Control
- Fixed External Inputs
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CARDINAL UTILITY The notion that utility--the satisfaction of wants and needs achieved through the consumption of goods and services--can be measured with numerical values (1, 2, 3, etc.) that are based on a benchmark scale. Cardinal utility presumes that satisfaction is a measurable characteristic of a person, like height or weight. The contrasting notion is ordinal utility, which is based on a ranking of preferences.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time at a crowded estate auction looking to buy either a pair of blue silicon oven mitts or a coffee cup commemorating the 2000 Olympics. Be on the lookout for broken fingernail clippers.
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This isn't me! What am I?
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Cyrus McCormick not only invented the reaper for harvesting grain, he also invented the installment payment for selling his reaper.
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"Every man must decide whether he will walk in the light of creative altruism or in the darkness of destructive selfishness." -- Martin Luther King, Jr., clergyman
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SSRN
Social Science Research Network
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