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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 19: Monopolistic Competition | Unit 3: Output
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Page: 11 of 22
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- A monopolistic competitive firm is motivated by profit maximization.
- Profit maximization is the presumption that firms make decisions and undertake production to achieve the highest possible level of economic profit, which is the difference between total revenue and total opportunity cost (including a normal profit).
- With these numbers in place, the firm's profit-maximizing task is relatively straightforward -- to pick the production quantity associated with the highest amount of profit.
- Three ways:
- The Total Approach
- Profit
- The Marginal Approach
- In all likelihood the firm will go ahead and produce the sixth unit. However, it will not produce the eighth unit.
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LABOR The mental and physical human efforts used in the production of goods and services. This is one of four basic categories of resources, or factors of production. The other three are capital, land, and entrepreneurship.
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RED AGGRESSERINE [What's This?]
Today, you are likely to spend a great deal of time searching for a specialty store seeking to buy either a microwave over that won't burn your popcorn or a T-shirt commemorating the first day of winter. Be on the lookout for rusty deck screws. Your Complete Scope
This isn't me! What am I?
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A lump of pure gold the size of a matchbox can be flattened into a sheet the size of a tennis court!
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"The mediocre teacher tells. The good teacher explains. The superior teacher demonstrates. The great teacher inspires." -- William Ward ‚ Texas Wesleyan University Administrator
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JPUBE Journal of Public Economics
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