BEC 2 Flashcards
According to the law of diminishing returns, as more units of a variable input are added to fixed inputs, a point is reached at which the continued addition of variable inputs results in decreasing output per unit of variable input. Generally, this diminishing return results when the increasing variable inputs overwhelm the fixed inputs, which results in inefficiencies.
According to the law of diminishing returns, as more units of a variable input are added to fixed inputs, a point is reached at which the continued addition of variable inputs results in decreasing output per unit of variable input. Generally, this diminishing return results when the increasing variable inputs overwhelm the fixed inputs, which results in inefficiencies.
Inventory Turnover- Cost of Goods Sold/Average Inventory (i.e., beginning inventory + ending inventory/2
Inventory Turnover- Cost of Goods Sold/Average Inventory (i.e., beginning inventory + ending inventory/2
By definition, a normal profit occurs when total revenue is exactly equal to the sum of explicit and implicit costs.
By definition, a normal profit occurs when total revenue is exactly equal to the sum of explicit and implicit costs.
The computation of net present value (NPV) is:
NPV = Present value of cash inflows - Present value of cash outflows
The computation of net present value (NPV) is:
NPV = Present value of cash inflows - Present value of cash outflows
Elasticity of supply is measured by the formula: % change in quantity supplied divided by % change in price.
Elasticity of supply is measured by the formula: % change in quantity supplied divided by % change in price.
The price elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price.
The price elasticity of demand is calculated as the percentage change in quantity divided by the percentage change in price.
In perfect competition, price is always equal to (the same as) marginal revenue. In perfect competition, in the short run, each and every unit produced can be sold at the market price; therefore, price is also demand and marginal revenue.
In perfect competition, price is always equal to (the same as) marginal revenue. In perfect competition, in the short run, each and every unit produced can be sold at the market price; therefore, price is also demand and marginal revenue.
Marginal propensity to consume measures the change in consumption spending as the percentage of change in disposable income.
Marginal propensity to consume measures the change in consumption spending as the percentage of change in disposable income.
A Keynesian supply curve is horizontal up to the assumed level of output at full employment, at which point it “kinks,” or slopes, sharply upward, which reflects the point at which output is associated with higher prices.
A Keynesian supply curve is horizontal up to the assumed level of output at full employment, at which point it “kinks,” or slopes, sharply upward, which reflects the point at which output is associated with higher prices.
The reasons for unemployment fall into one of four categories: (1) Frictional unemployment, (2) structural unemployment, (3) seasonal unemployment, and (4) cyclical unemployment.
The reasons for unemployment fall into one of four categories: (1) Frictional unemployment, (2) structural unemployment, (3) seasonal unemployment, and (4) cyclical unemployment.
The breakeven point in units can be computed by dividing total fixed costs by the contribution margin per unit
The breakeven point in units can be computed by dividing total fixed costs by the contribution margin per unit
Net National Product, like Gross National Product, measures the total output of all goods and services produced worldwide using the economic resources of U.S. entities, but does not include an amount (output value) for depreciation. Thus, depreciation would be deducted from GNP to derive NNP.
Net National Product, like Gross National Product, measures the total output of all goods and services produced worldwide using the economic resources of U.S. entities, but does not include an amount (output value) for depreciation. Thus, depreciation would be deducted from GNP to derive NNP.
Structural unemployment consists of members of the workforce who are not employed because the types of jobs they had previously have been greatly reduced or eliminated, including as a result of technological advances, or because they lack the skills needed for available jobs. Technological advances cause structural unemployment.
Structural unemployment consists of members of the workforce who are not employed because the types of jobs they had previously have been greatly reduced or eliminated, including as a result of technological advances, or because they lack the skills needed for available jobs. Technological advances cause structural unemployment.
Frictional unemployment consists of members of the workforce who are not employed because they are in transition (e.g., those searching for a job that better suits their talents or who are moving to a different geographical location) or because they have imperfect information (e.g., what type of jobs they qualify for or what jobs are available).
Frictional unemployment consists of members of the workforce who are not employed because they are in transition (e.g., those searching for a job that better suits their talents or who are moving to a different geographical location) or because they have imperfect information (e.g., what type of jobs they qualify for or what jobs are available).
There could be official full employment when there is structural, frictional, and/or seasonal unemployment. Only cyclical unemployment is considered in the official measure of full employment
There could be official full employment when there is structural, frictional, and/or seasonal unemployment. Only cyclical unemployment is considered in the official measure of full employment
