Workbook15

Question 1

Long Run

Answer 1

In economics, the time it takes to change all the factors of production. (See short run and momentary period)

Question 2

Lottery

Answer 2

1: A tax on people who are mathematically challenged, 2: The equivalent of betting that the pet-store parrot speaks Flemish.

Question 3

Luxury

Answer 3

In economics, a good for which the elasticity of demand is greater than one. (See necessity)

Question 4

Macroeconomics

Answer 4

The study of an economic system as a whole; i.e., national income analysis. (See megaeconomics an microeconomics)

Question 5

Madison Avenue

Answer 5

A euphemism for the advertising industry. The street in New York where most of the powerful advertising agencies once had their headquarters

Question 6

Magna Carta

Answer 6

The great charter of English political and civil liberties granted by King John at Runnymede on June 15, 1215.

Question 7

Marginal Cost

Answer 7

(MC, TC’) The change in total cost caused by the production of one additional unit.

Question 8

Marginal Efficiency of Capital (MEC)

Answer 8

What a business decision-maker uses to determine the efficacy of an investment; i.e., the interest rate, alone, is not the critical determinant. Investment decisions are the result of a comparison between the expected return on an investment and the cost of that investment.

Question 9

Marginal Output

Answer 9

Extra output; the difference between the current output and the previous output. Back in the day, the term of art for extra output was marginal physical product (MPP).

Question 10

Marginal Physical Product

Answer 10

(See marginal output)

Question 11

Marginal Revenue

Answer 11

(MR, TR’) The change in total revenue caused by the sale of one additional unit.