Product Function, Isoquants
factors of production - inputs that firm uses to produce
- mainly divided into labor, materials, capital
- capital - not just money,
Economics
Forum reference:
Book page:
http://course-notes.org/Economics
Assets
asset - provides flow of money/services to its owner
- capital gain - increase in value of asset
- unrealized until asset is sold
Reducing Risk
diversification - putting resources into different risky situations
- can't lose on all investments
- invesments not too closely correlated >
Risk Preferences
expected utility - sum of utilities of all possible incomes weighted by probability
- E(u) = (probabilty1)(utility1) + (probabi
Probability, Expected Value, Variability
measuring risk - must know all possible outcomes, probability of each outcome
Consumer Surplus
market demand - sum of individual demands
- more consumers enter market >> market demand curve shifts more to the right
- factors influen
Network Externalities
network externalities - when person’s demand depends on someone else’s demands
Income-Substitution Effects
price change effect on consumption - broken down into 2 parts
Engel Curves
engel - essentially just demand curves, except w/ respect to income
- axes changes to income and just 1 good
- normal good - increased income >
Price/Income Consumption Curves
demand functions - calculated from budget line and utility function
- MRS calculated by partial derivatives of utility or given prices
- usually
Pages
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