Define the following terms completely and concisely
a. marginal revenue
b. average revenue
c. optimal decision
d. satisficing
e. marginal profit
a. Marginal revenue is the addition to total revenue resulting from the addition of one unit to total output. Marginal revenue, in geometrical terms, is the slope of the total revenue curve.
b. Average revenue is total revenue divided by quantity. The average revenue curve is another name for the demand curve.
c. An optimal decision is one which, among all the decisions that are actually possible, is best for the decision maker.
d. Satisficing is making decisions that are satisfactory, given the amount of information available, but which may in reality not be the best decisions if all facts were known. The cost of data gathering is thought to force business and government to satisfice.
e. Marginal profit is the additional profit resulting from the sale of one additional unit of output.
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A. that recognition lags make timely intervention very difficult. B. the economy corrects itself very slowly. C. the inability of economic theory to suggest appropriate policy. D. the difficulty of obtaining agreement on monetary policy.
Refer to Figure 10.7. A movement from point A to point B could be caused by
A) a negative demand shock. B) a decrease in the term premium investors expect in the future. C) an increase in the default-risk premium. D) an increase in the expected rate of inflation.
Refer to Scenario 14.4. Suppose that the price of the product rises to $5, the price of labor
A) will decrease. B) will increase. C) will not change. D) will change in an indeterminate fashion.
Choose the letter of the diagram in Figure 36.2 that represents the shift in the foreign exchange market for dollars given the following situation, ceteris paribus: The Japanese remove some tariffs on American goods.
A. a. B. b. C. c. D. d.