Advanced level economics

Broadway Student Accommodation Property

Earn - Receive payment (income) for productive efforts.

Economic growth - An increase in the total output of a nation over time. Economic growth is usually measured as the annual rate of increase in a nation's real GDP.

Economic system - The collection of institutions, laws, activities, controlling values, and human motivations that collectively provide a framework for economic decision making.

Economic wants - Desires that can be satisfied by consuming a good or a service. Some economic wants range from things needed for survival to things that are nice to have.

Entrepreneur - One who organizes, manages, and assumes the risks of a business or enterprise.

Entrepreneurship - The human resource that assumes the risk of organizing other productive resources to produce goods and services.

Equilibrium price - The market clearing price at which the quantity demanded by buyers equals the quantity supplied by sellers.

Exchange - Trading goods and services with others for other goods and services or for money (also called trade). When people exchange voluntarily, they expect to be better off as a result.

Exchange rates - The rate, or price, at which one country's currency is exchanged for the currency of another country.

Excise Tax - Taxes imposed on specific goods and services, such as ci******es and gasoline.

Exports - Goods or services produced in one nation but sold to buyers in another nation.

Factors of production - Resources used by businesses to produce goods and services.

Federal Reserve System - The central bank and monetary authority of the United States.

Backward bending labor curve

In economics, a backward-bending supply curve of labour or backward-bending labour supply curve is a graphical device showing a situation in which, as real or inflation-corrected wages increase beyond a certain level, people will substitute leisure (non-paid time) for paid work-time and thus higher wages lead to less labor-time being offered for sale.

The labour-leisure tradeoff is the tradeoff faced by wage-earning human beings between the amount of time spent engaged in wage-paying work (assumed to be unpleasant) and satisfaction-generating non-paid time that allows (1) participation in leisure activities and (2) use of time to do necessary self-maintenance, such as sleep. The key to this tradeoff is a comparison between the wage received from each hour of working and the amount of satisfaction generated by use of non-paid time. Such a comparison generally means that a higher wage entices people to spend more time working for pay; this substitution effect implies a positively sloped labour supply curve. However, the backward-bending labour supply curve results when an even higher wage actually entices people to work less and to consume more leisure or non-paid time

Marginal productivity Theory of Distribution

The marginal productivity theory of distribution determines the prices of factors of production. This theory states that a factor of production is paid price equal to its marginal product. For example a labourer gets his wage according its marginal product. He is rewarded on the basis of contribution he makes the total output.

Marginal productivity theory of wages

Marginal productivity theory of wage explains that under perfect competition a worker's wage is equal to marginal as well as average revenue productivity. In other words marginal revenue productivity and average revenue productivity (ARP) of a worker determine his wages. According to this theory wage of a laborer is determined by his marginal productivity. In other words MRP= M.W. Marginal productivity is the addition made total productivity by employing one more unit of are labours. As the labourers are given money wage their marginal productivity is calculated in terms of money.

Marginal productivity

The term ¡°marginal productivity¡± refers to the extra output gained by adding one unit of labour; all other inputs are held constant. So, the technology and efficiency of the factory stays the same. Marginal productivity is the extra jeans sewn, that is output gained, by hiring an extra worker, for example.

marginal revenue product/MRP

The change in revenue that results from the addition of one extra unit when all other factors are kept equal. The marginal revenue product is used in marginal analysis to examine the effect of variable inputs, such as labor, and follows the law of diminishing marginal returns. As the number of units of a variable input increase, the revenue generated by each addition unit decreases at a certain point. It is calculated by taking the marginal product of labor and multiplying it by the marginal revenue of a firm.

Marginal revenue product = marginal product x marginal revenue