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LONG RUN, MACROECONOMICS: In terms of the macroeconomic analysis of the aggregate market, a period of time in which all prices, especially wages, are flexible, and have achieved their equilibrium levels. This is one of two macroeconomic time designations; the other is the short run. Long-run wage and price flexibility means that ALL markets, including resources markets and most notably labor markets, are in equilibrium, with neither surpluses nor shortages. Wage and price flexibility and the resulting resource market equilibria are the reason for the vertical long-run aggregate supply curve.
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Lesson 14: Production | Unit 4: Long-Run Production
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Page: 22 of 25
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In this unit, you should have learned about:- The long run as the planning period in which all inputs, especially capital, are variable.
- How the long-run production is guided by returns to scale rather than the law of diminishing marginal returns.
- The three types of returns to scale -- increasing, decreasing, and constant.
- Why increasing returns to scale result from resource specialization, support activities, and the relation between volume and area.
- Why decreasing returns to scale result from management control and fixed external inputs.
- How constant returns to scale is the balance between increasing returns to scale and decreasing returns to scale, which gives rise to the minimum efficient scale.
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SPECIAL INTEREST GROUPS A group of people with shared interests who have more to gain or lose from a candidate, issue, or policy and thus try extra hard to ensure that the political system is aware of their preferences. Special interest groups are the other side of the coin of voter apathy. Motivated rational choices, some people have little or no involvement in the political system others have a great deal. The study of public choice indicates that special interest groups are one source of government inefficiency. Other sources are politicians, voters, and government bureaucracies.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites wanting to buy either a flower arrangement in a coffee cup for your father or a how-to book on meeting people. Be on the lookout for the happiest person in the room.
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This isn't me! What am I?
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The portrait on the quarter is a more accurate likeness of George Washington than that on the dollar bill.
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"Wise men speak because they have something to say; Fools because they have to say something. " -- Plato, philosopher
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MR
Marginal Revenue
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