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19 Cards in this Set
- Front
- Back
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flow |
a measurement that requires a unit of time - what you earn EX: salary, i make $50,000...per year, month? |
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stock |
fixed amount at a moment of time - what you own |
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derived demand |
demand for output and profits businesses can derive from hiring labor
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KEY 1 |
choose only when additional benefits are greater than additional opportunity costs |
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KEY 2 |
Count only additional benefits and additional opportunity costs |
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KEY 3 |
Be sure to count all additional benefits and costs, including implicit costs and externalities |
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marginal product |
additional output from hiring one more unit of labor |
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diminishing marginal productivity |
as you add more of a variable input to fixed inputs, the marginal product of the variable input eventually diminishes |
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marginal revenue product |
additional revenue from selling output produced by an additional laborer calculated by multiplying marginal product by the price of output |
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present value |
amount that, if invested today, will grow as large as the future amount, taking account of earned interest |
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present value = |
Amount of money available in n years / (1 + Interest Rate) ^ n |
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discount |
reduction of future revenues for forgone interest |
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economic rent |
income paid to any input in relatively inelastic supply |
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human capital |
increased earning potential from work experience, on-the-job training, and education |
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progressive taxes |
tax rate increases as income increases |
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regressive taxes |
tax rate decreases as income increases |
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proportional (flat-rate) taxes |
tax rate the same regardless of income |
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marginal tax rate |
rate on additional dollar of income |
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transfer payments |
payments by government to households |
