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Expansion Path
In economics, an expansion path (also called a scale lineJain, TR; Khanna OP (2008). ''Economics.'' VK Publications, ) is a path connecting optimal input combinations as the scale of production expands.Hirschey, Mark (2008). ''Managerial economics.'' Cengage Learning, which is often represented as a curve in a graph with quantities of two inputs, typically physical capital and labor, plotted on the axes. A producer seeking to produce a given number of units of a product in the cheapest possible way chooses the point on the expansion path that is also on the isoquant associated with that output level.Prusty, Sadananda (2010). ''Managerial Economics.'' PHI Learning Pvt. Ltd., Economists Alfred Stonier and Douglas Hague defined “expansion path” as "that line which reflects the least–cost method of producing different levels of output, when factor prices remain constant."Stonier, Alfred W.; Hague, Douglas C. (1980). ''A textbook of economic theory, 5th edition.'' Longmans ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Isoquant Isocost Graph
An isoquant (derived from quantity and the Greek word iso, meaning equal), in microeconomics, is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. The x and y axis on an isoquant represent two relevant inputs, which are usually a factor of production such as labour, capital, land, or organisation. An isoquant may also be known as an “Iso-Product Curve”, or an “Equal Product Curve”. Isoquant vs. Indifference Curve While an indifference curve mapping helps to solve the utility-maximizing problem of consumers, the isoquant mapping deals with the cost-minimization and profit and output maximisation problem of producers. Indifference curves further differ to isoquants, in that they cannot offer a precise measurement of utility, only how it is relevant to a baseline. Whereas, from an isoquant, the product can be measured accurately in physical units, and it is known by exactly how ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyzes what's viewed as basic elements in the economy, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on glossary of economics, these elements. Other broad distinctions within economics include those between positive economics, desc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Output (economics)
Output in economics is the "quantity of goods or Service (economics), services Production (economics), produced in a given time period, by a firm, industry, or country", whether consumed or used for further production. The concept of national output is essential in the field of macroeconomics. It is national output that makes a country rich, not large amounts of money. Definition Output is the result of an economic process that has used input (economics), inputs to produce a product or service that is available for sale or use somewhere else. ''Net output'', sometimes called ''netput'' is a quantity, in the context of production, that is positive if the quantity is output by the production process and negative if it is an input to the production process. Microeconomics Output condition The profit-maximizing output condition for producers equates the relative marginal cost of any two goods to the relative selling price of those goods; i.e. \frac = \frac One may als ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Physical Capital
Physical capital represents in economics one of the three primary factors of production. Physical capital is the apparatus used to produce a good and services. Physical capital represents the tangible man-made goods that help and support the production. Inventory, cash, equipment or real estate are all examples of physical capital. Definition N.G. Mankiw definition from the book Economics: '' Capital is the equipment and structures used to produce goods and services. Physical capital consists of man-made goods (or input into the process of production) that assist in the production process. Cash, real estate, equipment, and inventory are examples of physical capital.'' Capital goods represents one of the key factors of corporation function. Generally, capital allows a company to preserve liquidity while growing operations, it refers to physical assets in business and the way a company have reached their physical capital. While referring how companies have obtained their capital ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Labor Demand
In economics, the labor demand of an employer is the number of labor-hours that the employer is willing to hire based on the various exogenous (externally determined) variables it is faced with, such as the wage rate, the unit cost of capital, the market-determined selling price of its output, etc. The function specifying the quantity of labor that would be demanded at any of various possible values of these exogenous variables is called the labor demand function. Varian, Hal, 1992, ''Microeconomic Analysis'', 3rd Ed., W.W. Norton & Company, Inc. New York. The sum of the labor-hours demanded by all employers in total is the market demand for labor. Perfect competitor The long-run labor demand function of a competitive firm is determined by the following profit maximization problem: : \text \,\, pQ - wL - rK \,\, \text \,\, Q, \, L, \, \text \, K : \text :Q = f\,(L, K), where ''p'' is the exogenous selling price of the produced output, ''Q'' is the chosen quantity of output to ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Isoquant
An isoquant (derived from quantity and the Greek word iso, meaning equal), in microeconomics, is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. The x and y axis on an isoquant represent two relevant inputs, which are usually a factor of production such as labour, capital, land, or organisation. An isoquant may also be known as an “Iso-Product Curve”, or an “Equal Product Curve”. Isoquant vs. Indifference Curve While an indifference curve mapping helps to solve the utility-maximizing problem of consumers, the isoquant mapping deals with the cost-minimization and profit and output maximisation problem of producers. Indifference curves further differ to isoquants, in that they cannot offer a precise measurement of utility, only how it is relevant to a baseline. Whereas, from an isoquant, the product can be measured accurately in physical units, and it is known by exactly how ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Douglas Hague
Sir Douglas Chalmers Hague (20 October 1926 – 1 February 2015) was a British economist who was a close associate of Margaret Thatcher. Biography Hague was born in Bramley, Leeds, to Laurence Hague, a municipal clerk and Marion (née Chalmers). The family moved to Birmingham when he was three years old. Hague was educated at Moseley Grammar School (now Moseley School) and King Edward's School, Birmingham, and took a bachelor of commerce degree at Birmingham University. He was assistant lecturer, then lecturer, then Reader in Political Economy at University College, London, 1947–57. He moved to be the Newton Chambers Professor of Economics at the University of Sheffield at the young age of 30, 1957–63. Whilst at Sheffield, Hague also spent a year as visiting professor at Duke University, North Carolina, from 1960-61. During this time, Sheffield University granted him limited funds to visit American Business Schools with a view to setting up a similar operation in Sheff ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Total Cost
In economics, total cost (TC) is the minimum dollar cost of producing some quantity of output. This is the total economic cost of production and is made up of variable cost, which varies according to the quantity of a good produced and includes inputs such as labor and raw materials, plus fixed cost, which is independent of the quantity of a good produced and includes inputs that cannot be varied in the short term such as buildings and machinery, including possibly sunk costs. Total cost in economics includes the total opportunity cost (benefits received from the next-best alternative) of each factor of production as part of its fixed or variable costs. The additional total cost of one additional unit of production is called marginal cost. The marginal cost can also be calculated by finding the derivative of total cost or variable cost. Either of these derivatives work because the total cost includes variable cost and fixed cost, but fixed cost is a constant with a derivativ ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Factor Price
In economic theory, a factor price is the unit cost of using a factor of production, such as labor demand, labor or physical capital. There has been much debate as to what determines factor prices. Classical economics, Classical and Marxist school of economics, Marxist economists argue that factor prices decided the value of a product and therefore the value is Intrinsic theory of value, intrinsic within the product. For this reason, the term natural price is often used instead. Marginalist economists argue that the factor price is a function of the demand for the final product, and so they are imputation (economics), imputed from the finished product. The theory of imputation was first expounded by the Austrian School, Austrian economist Friedrich von Wieser. Production economics Factors of production {{Econ-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Tangent
In geometry, the tangent line (or simply tangent) to a plane curve at a given point is the straight line that "just touches" the curve at that point. Leibniz defined it as the line through a pair of infinitely close points on the curve. More precisely, a straight line is said to be a tangent of a curve at a point if the line passes through the point on the curve and has slope , where ''f'' is the derivative of ''f''. A similar definition applies to space curves and curves in ''n''-dimensional Euclidean space. As it passes through the point where the tangent line and the curve meet, called the point of tangency, the tangent line is "going in the same direction" as the curve, and is thus the best straight-line approximation to the curve at that point. The tangent line to a point on a differentiable curve can also be thought of as a '' tangent line approximation'', the graph of the affine function that best approximates the original function at the given point. Similarly, t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Conditional Factor Demands
In economics, a conditional factor demand is the cost-minimizing level of an input (factor of production) such as labor or capital, required to produce a given level of output, for given unit input costs (wage rate and cost of capital) of the input factors. A conditional factor demand function expresses the conditional factor demand as a function of the output level and the input costs.Varian, Hal., 1992, ''Microeconomic Analysis'' 3rd Ed., W.W. Norton & Company, Inc. New York. The conditional portion of this phrase refers to the fact that this function is conditional on a given level of output, so output is one argument of the function. Typically this concept arises in a long run context in which both labor and capital usage are choosable by the firm, so a single optimization gives rise to conditional factor demands for each of labor and capital. Since the optimal mix of input levels depends on the wage and rental rates, these rates are also arguments of the conditional demand func ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Homothetic Transformation
In mathematics, a homothety (or homothecy, or homogeneous dilation) is a transformation of an affine space determined by a point ''S'' called its ''center'' and a nonzero number ''k'' called its ''ratio'', which sends point X to a point X' by the rule : \overrightarrow=k\overrightarrow for a fixed number k\ne 0. Using position vectors: :\mathbf x'=\mathbf s + k(\mathbf x -\mathbf s). In case of S=O (Origin): :\mathbf x'=k\mathbf x, which is a uniform scaling and shows the meaning of special choices for k: :for k=1 one gets the ''identity'' mapping, :for k=-1 one gets the ''reflection'' at the center, For 1/k one gets the ''inverse'' mapping defined by k. In Euclidean geometry homotheties are the similarities that fix a point and either preserve (if k>0) or reverse (if k<0) the direction of all vectors. Together with the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
