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Average Revenue (AR) This is the revenue per unit of the commodity sold. It is obtained by dividing Total Revenue by total quantity sold. For a firm in a perfectly competiti
Properties of Indifference Curves An indifference curve is usually convex to the origin. Indifference curves slope downwards from left to right. A set
production function
The owner of a patent has a contract with a cooperation that gives it right to use the patent. The cooperation will pay the patent owner $2500 yearly for the next 5 years, $3000 fo
CENTRAL BANK A modern central bank performs so many functions of different nature that it is difficult to give any brief yet accurate definition of a central bank. Any definiti
The only road connecting two populated islands is currently a freeway. During rush hour, there is congestion because of the heavy traffic. The marginal external cost from congestio
TRADE UNIONS Trade unions are workers' organizations whose objective is to protect the interests of their members. Functions i. To bargain on behalf of their mem
Disadvantages The effect on incentives High progressive tax makes work and extra effort become less valuable. The effect on the willingness to accept risk
Factors influencing Supply Curve State of technology There is a direct relationship between supply and technology. Improved technology results in more supply as with
agency problems between shareholders and government
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