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RATE OF RETURN: The ratio of the additional annual income or profit generated by an investment to the cost of the investment. Here's a simple example, although the calculations are usually a great deal more involved for actual investments. If the cost of constructing a new factory is $10 million and it gives you an extra $1 million in profit each year, then its rate of return is 10 percent.
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Lesson 21: Factor Demand | Unit 3: The Curve
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Page: 15 of 24
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Topic:
Factor Demand Curve
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A few points about this curve.- The factor demand curve is only the negatively-sloped portion of the marginal revenue product curve.
- The factor demand curve is negatively sloped because the marginal revenue product curve is negatively sloped, and this is due to the law of diminishing marginal returns.
- The factor demand curve stops at the horizontal axis where marginal revenue product is zero.
- This factor demand curve is based on the presumption that the firm was able to pay the same wage for each worker ($20 per hour).
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AGGREGATE EXPENDITURES EQUATION An equation that summarizes the four aggregate expenditures on gross domestic product by the four macroeconomic sectors. In the study of Keynesian economics, this equation is commonly used to summarize the demand side of the macroeconomy. The aggregate expenditures equation actually comes in three different versions depending on how many of the four sectors and their expenditures are included.
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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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"Concentrate all your thoughts upon the work at hand. The sun's rays do not burn until brought to a focus." -- Alexander Graham Bell, inventor
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ECU
European Currency Unit
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