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In Classical Economics profit is the return to the proprietor(s) of capital stocks (machinery, tools, structures). If I lease a backhoe from a tool rental company the amount I pay to the backhoe owner it is seen by me as "rent". But that same flow as seen by the supplier of the backhoe is "interest" (i.e. the return to loaned stock/money).
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
If the production set Y can be represented by a production function F whose argument is the input subvector of a production vector, then increasing returns to scale are available if F(λy) > λF(y) for all λ > 1 and F(λy) < λF(y) for all λ<1. A converse condition can be stated for decreasing returns to scale.
Today's concept: risk and return. When it comes to financial matters, we all know what risk is -- the possibility of losing your hard-earned cash. And most of us understand that a return is what ...
An example would be a factory increasing its saleable product, but also increasing its CO 2 production, for the same input increase. [2] The law of diminishing returns is a fundamental principle of both micro and macro economics and it plays a central role in production theory. [5]
In economics, a market demand schedule is a tabulation of the quantity of a good that all consumers in a market will purchase at a given price. At any given price, the corresponding value on the demand schedule is the sum of all consumers’ quantities demanded at that price.
Basic diagram of the circular flow of income. The functioning of the free-market economic system is represented with firms and households and interaction back and forth. [2] The circular flow of income or circular flow is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. between ...
In economics and microeconomics, the economic region of production is an offshoot of the theory of production function with two variables. It is a cost-oriented theory which defines the region in which the optimal factor combination will lie. [1] It serves as a map of the region of optimal production.