Studied by 6 peopleMarginal revenue of product labor
revenue generated by one additional unit of labor
Marginal utility
utility gained from consuming one more unit of a good
Total utility
sum of all marginal utility values gained from each unit consumed
Consumer surplus
value a buyer receives from the purchase of a good in excess of what the customer pays for it
Vertical merger
merger of firms during steps in the production process
Conglomerate merger
merger of firms from unrelated industries
Horizontal merger
merger of direct competitors
Monopsony
when one firm is the only purchaser of labor
Marginal factor cost (MFC)
additional cost of one more unit of labor
Social efficiency
faire and optimized allocation of economic resources in a society
Natural monopolies
created when fixed costs are so high → second firm cannot enter the market
Market failure
when resources are not allocated in an optimal manner
Externalities
costs/benefits felt beyond those causing the effects
Public goods
goods that many individuals benefit from at the same time
Imperfect information
buyers/sellers do not have complete knowledge about available markets, prices, products, costumers, suppliers
Marginal private cost (MPC)
cost paid by the customer for a unit of good
Marginal external cost
cost paid by other people (aside from the buyer) for a unit of good
Nonrival good
consumption of that good does not affect consumption by others
Nonexcludable goods
cannot be held back from those who want it
Free rider
attempts to benefit from public good without paying for it
Gini coefficient
uses Lorenz curve to calculate income equality
Poverty line
official benchmark for poverty
Note
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