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8 Cards in this Set
- Front
- Back
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optimization
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cost-benefit analysis
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first rule of economics
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if two lines cross, the intersection is the answer to some question
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marginal revenue product
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if labor increases by one unit, revenue increases by MPL*MR
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pareto efficient
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there is no other allocation that makes someone better off without making someone else worse off
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franchising
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pay negative salary to get int, keep all profits
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risk cost
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cost to the worker of bearing income fluctuations
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incentive intensity principle
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optimal piecerateis higher when:
MNR is higher, employee is more responsive, employee is less risk averse, there is less noise |
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moral hazard
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high types mimic low types to exploit their cost advantage
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