Marginal utility

maximizes profit by paying K and L their marginal products, without offering any additional payment for their contribution to technological progress. Learning by doing formed the basis of the first model of endogenous growth theory, which is known as the AK model. The AK model assumes that when people accumulate capital, learning by doing generates technological progress that tends to raise the marginal product of capital, thus offsetting the tendency for the marginal product to diminish when…

away from the peak time and loose the congestion. This is efficient, because there is a gap between Marginal Social Cost and Marginal Private Cost (Average Social Cost) of traffic congestion. The difference between the two, which is called Marginal External Cost, should be covered by the congestion tax the drivers pay. Socially optimal amount of traffic flow/congestion happens where MSC and Marginal Social Benefit (Demand)…

Isocost curve is that curve represents the combination of inputs that will cost the producer the same amout of money. We get the slope of the isocost line. The isocost line shows the various combinations of labor and capital a firm can buy with a given price. The slope of isocost line = PL/Pk. In the given equation, the price of labour is indicated by PL and the price of capital is given by PK. The isocost line may change if the amount of money spent to buy factors changes but the slope…

FINANCIAL RATIO ANALYSIS Operating Profitability Ratios Gross Profit Margin Gross profit margin is used to compare a company with its competitors. A higher gross profit margin indicates that a company can make a good profit provided it keeps its overhead costs under control whereas a lower gross profit margin indicates that the company is unable to control its production costs. Ideal gross profit margin depends on the industry. From the above graph, the gross profit margin has shown a…

Total edible oil consumption (TEO) is the dependent variable, and the independent variables are Household size(HS), Household income(HI), Household education Index(HEI), Price(P),Total Awareness score on oil(TAS) and the Ratio of Total oil expenditure to Total food expenditure (R) .θ is the disturbance term, α is the intercept term and a, b, c, d, e and f are the corresponding coefficients of the independent variables. Based on the survey data obtained from 360 respondents a regression model is…

This report was commissioned to examine a decision regarding the number of shirts to produce for the rock concert, scheduled to be staged in two months and calculate the financial outcomes while maximizing the profit. The research draws attention to two uncertain events, Mr. George Lassiter faced. Firstly Mr. Lassiter has no idea in the number of people attending the concert and secondly about the percentage of attendees who would buy his shirts. George Lassiter is a project engineer for a…

sophisticated businesses today have simply abandoned cost-plus pricing and are engulfed in ways in which to enhance, improve, and implement the proper and best estimation and forecasting techniques to create more accurate knowledge pertaining to marginal revenue and marginal costs (Thomas & Maurice,…

Roger Arnold 's book How to think like an Economist has been a great help in understanding economics. Learning how to think as an economist has been quite interesting. The book made me realize that economics affects nearly every part of my life, something I really had not thought about. When thinking about this paper, I decided to share three areas of my life that involve interesting economic principles. These areas are my job, my car, and my hobby which is collecting books. There are a number…

example of a congestible public good? Question 2 A baseball field is: Question 3 A means of creating a price-excludable public good is: Question 4 An example of an undesirable public good (or public “bad”) is: Question 6 The marginal cost of making a given quantity of a congestible public good available to more con­sumers is: Question 7 Public transportation is: Question 8 The efficient output of a pure public good is achieved at the point at which:…

There have been recent changes in our selling environment of our low-calorie frozen, microwavable food products. We had a perfectly competitive market recently, which our plan was to focus on an equilibrium price to produce the right amount of product at the right price to maximize profits among our competitors and because it was perfectly competitive there wasn’t much of a relationship between our prices and their prices. We have now recently determined that our selling environment has…