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AR: The abbreviation for average revenue, which is the revenue received for selling a good, per unit of output sold, found by dividing total revenue by the quantity of output. Average revenue actually goes by a simpler and more widely used term... price. Average revenue is really a fancy-schmancy term for the price received by a seller for selling a good. However, using the longer term average revenue let's us see the connection with other terms, like total revenue, marginal revenue, and quantity.
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Lesson 21: Factor Demand | Unit 3: The Curve
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Page: 14 of 24
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Topic:
The Hiring Decision
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- The number of workers the firm is willing to hire for production depends on the marginal revenue product of the workers.
- In particular, the firm compares the wage or price paid each worker with the marginal revenue product generated by the worker.
- It will seek to employ workers up to the quantity in which marginal revenue product is at least as much as the wage.
- The story seems quite clear: If the wage the firm pays workers is $20 per hour, then it will hire only 6 employees.
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RISK PREFERENCES Three alternative views concerning the choice between a risky outcome and a certain outcome -- risk aversion, risk neutrality, and risk loving. Some people prefer to avoid risk (risk aversion), others enjoy engaging in risk (risk loving), and still others are indifferent (risk neutrality). Most people are risk averse, which underlies the provision of insurance. Others who are risk loving are more inclined to gamble, play the stock market, and be entrepreneurs.
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BEIGE MUNDORTLE
[What's This?]
Today, you are likely to spend a great deal of time browsing about a thrift store seeking to buy either a birthday greeting card for your father or a T-shirt commemorating the first day of spring. Be on the lookout for high interest rates.
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Helping spur the U.S. industrial revolution, Thomas Edison patented nearly 1300 inventions, 300 of which came out of his Menlo Park "invention factory" during a four-year period.
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"Education is the ability to listen to almost anything without losing your temper or your self-confidence. " -- Robert Frost
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TSP
Time Series Econometrics (software)
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