|
Short-run
In economics, the long-run is a theoretical concept in which all markets are in economic equilibrium, equilibrium, and all prices and quantities have fully adjusted and are in equilibrium. The long-run contrasts with the short-run, in which there are some constraints and markets are not fully in equilibrium. More specifically, in microeconomics there are no fixed factors of production in the long-run, and there is enough time for adjustment so that there are no constraints preventing changing the output level by changing the Capital (economics), capital stock or by entering or leaving an industry. This contrasts with the short-run, where some factors are variable (dependent on the quantity produced) and others are fixed (paid once), constraining entry or exit from an industry. In macroeconomics, the long-run is the period when the general price level, contractual wage rates, and expectations adjust fully to the state of the economy, in contrast to the short-run when these variable ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Long-run Marginal Cost
In economics, a cost curve is a graph of the costs of production as a function of total quantity produced. In a free market economy, productively efficient firms optimize their production process by minimizing cost consistent with each possible level of production, and the result is a cost curve. Profit-maximizing firms use cost curves to decide output quantities. There are various types of cost curves, all related to each other, including total and average cost curves; marginal ("for each additional unit") cost curves, which are equal to the differential of the total cost curves; and variable cost curves. Some are applicable to the short run, others to the long run. Notation There are standard acronyms for each cost concept, expressed in terms of the following descriptors: *SR = short run (costs spent on non-reusable materials e.g raw materials) *LR = long-run (cost spent on renewable materials e.g equipment) *A = average (per unit of output) *M = marginal (for an addition ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Macroeconomics
Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output (economics), output/Gross domestic product, GDP (gross domestic product) and national income, unemployment (including Unemployment#Measurement, unemployment rates), price index, price indices and inflation, Consumption (economics), consumption, saving, investment (macroeconomics), investment, Energy economics, energy, international trade, and international finance. Macroeconomics and microeconomics are the two most general fields in economics. The focus of macroeconomics is often on a country (or larger entities like the whole world) and how its markets interact to produce large-scale phenomena that economists refer to as aggregate variables. In microeconomics the focus of analysis is often a single market, such as whether changes in supply or ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Perfect Competition
In economics, specifically general equilibrium theory, a perfect market, also known as an atomistic market, is defined by several idealizing conditions, collectively called perfect competition, or atomistic competition. In Economic model, theoretical models where conditions of perfect competition hold, it has been demonstrated that a Market (economics), market will reach an Economic equilibrium, equilibrium in which the quantity supplied for every Goods and services, product or service, including Workforce, labor, equals the quantity demanded at the current price. This equilibrium would be a Pareto optimum. Perfect competition provides both allocative efficiency and productive efficiency: * Such markets are ''allocatively efficient'', as output will always occur where marginal cost is equal to average revenue i.e. price (MC = AR). In perfect competition, any Profit maximization, profit-maximizing producer faces a market price equal to its marginal cost (P = MC). This implies that ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyses what is viewed as basic elements within economy, economies, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyses economies as systems where production, distribution, consumption, savings, and Expenditure, investment expenditure interact; and the factors of production affecting them, such as: Labour (human activity), labour, Capital (economics), capital, Land (economics), land, and Entrepreneurship, enterprise, inflation, economic growth, and public policies that impact gloss ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Microeconomics
Microeconomics is a branch of economics that studies the behavior of individuals and Theory of the firm, firms in making decisions regarding the allocation of scarcity, scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics. One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce Economic efficiency, efficient results. While microeconomics focuses on firms and individuals, macroeconomics focuses on the total of economic activity, dealing with the issues of Economic growth, growth, inflation, and unemployment—and with national policies relati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Microeconomic
Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms. Microeconomics focuses on the study of individual markets, sectors, or industries as opposed to the economy as a whole, which is studied in macroeconomics. One goal of microeconomics is to analyze the market mechanisms that establish relative prices among goods and services and allocate limited resources among alternative uses. Microeconomics shows conditions under which free markets lead to desirable allocations. It also analyzes market failure, where markets fail to produce efficient results. While microeconomics focuses on firms and individuals, macroeconomics focuses on the total of economic activity, dealing with the issues of growth, inflation, and unemployment—and with national policies relating to these issues. Microeconomics also deals with the effec ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Average Cost
In economics, average cost (AC) or unit cost is equal to total cost (TC) divided by the number of units of a good produced (the output Q): AC=\frac. Average cost is an important factor in determining how businesses will choose to price their products. Short-run average cost Short-run costs are those that vary with almost no time lagging. Labor cost and the cost of raw materials are short-run costs, but physical capital is not. An average cost curve can be plotted with cost on the vertical axis and quantity on the horizontal axis. Marginal costs are often also shown on these graphs, with marginal cost representing the cost of the last unit produced at each point; marginal costs in the short run are the slope of the variable cost curve (and hence the first derivative of variable cost). A typical average cost curve has a U-shape, because fixed costs are all incurred before any production takes place and marginal costs are typically increasing, because of diminishing mar ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Capital Goods
In economics, capital goods or capital are "those durable produced goods that are in turn used as productive inputs for further production" of goods and services. A typical example is the machinery used in a factory. At the macroeconomic level, "the nation's capital stock includes buildings, equipment, software, and inventories during a given year." The means of production is as a "... series of heterogeneous commodities, each having specific technical characteristics ..." "capital goods", are one of the three types of intermediate goods used in the production process, the other two being land and labour. The three are also known collectively as "primary factors of production". This classification originated during the classical economics period and has remained the dominant method for classification. Capital can be increased by the use of a production process (see production function and factors of production). Outputs of the production process are normally classif ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Thinking Fast And Slow
''Thinking, Fast and Slow'' is a 2011 popular science book by psychologist Daniel Kahneman. The book's main thesis is a differentiation between two modes of thought: "System 1" is fast, instinctive and emotional; "System 2" is slower, more deliberative, and more logical. The book delineates rational and non-rational motivations or triggers associated with each type of thinking process, and how they complement each other, starting with Kahneman's own research on loss aversion. From framing choices to people's tendency to replace a difficult question with one that is easy to answer, the book summarizes several decades of research to suggest that people have too much confidence in human judgment. Kahneman performed his own research, often in collaboration with Amos Tversky, which enriched his experience to write the book. It covers different phases of his career: his early work concerning cognitive biases, his work on prospect theory and happiness, and with the Israel Defense For ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Daniel Kahneman
Daniel Kahneman (; ; March 5, 1934 – March 27, 2024) was an Israeli-American psychologist best known for his work on the psychology of judgment and decision-making as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences together with Vernon L. Smith. Kahneman's published empirical findings challenge the assumption of human rationality prevailing in modern economic theory. Kahneman became known as the "grandfather of behavioral economics." With Amos Tversky and others, Kahneman established a cognitive basis for common human errors that arise from heuristics and biases, and developed prospect theory. In 2011, Kahneman was named by ''Foreign Policy'' magazine in its list of top global thinkers. In the same year, his book '' Thinking, Fast and Slow'', which summarizes much of his research, was published and became a best seller. In 2015, ''The Economist'' listed him as the seventh most influential economist in the world. Kah ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Returns To Scale
In economics, the concept of returns to scale arises in the context of a firm's production function. It explains the long-run linkage of increase in output (production) relative to associated increases in the inputs (factors of production). In the long run, all factors of production are variable and subject to change in response to a given increase in production scale. In other words, returns to scale analysis is a long-term theory because a company can only change the scale of production in the long run by changing factors of production, such as building new facilities, investing in new machinery, or improving technology. There are three possible types of returns to scale: * If output increases by the same proportional change as all inputs change then there are constant returns to scale (CRS). For example, when inputs (labor and capital) increase by 100%, output increases by 100%. * If output increases by less than the proportional change in all inputs, there are decreasing retu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
