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Solutions for Chapter Module 53 : Profit Maximization

Full solutions for Krugman's Economics for AP* | 2nd Edition

ISBN: 9781429218276

Solutions for Chapter Module 53 : Profit Maximization

Since 5 problems in chapter Module 53 : Profit Maximization have been answered, more than 11817 students have viewed full step-by-step solutions from this chapter. This textbook survival guide was created for the textbook: Krugman's Economics for AP*, edition: 2. Chapter Module 53 : Profit Maximization includes 5 full step-by-step solutions. Krugman's Economics for AP* was written by and is associated to the ISBN: 9781429218276. This expansive textbook survival guide covers the following chapters and their solutions.

Key Business Terms and definitions covered in this textbook
  • absolute advantage

    the ability to produce a good using fewer inputs than another producer

  • average variable cost

    variable cost divided by the quantity of output

  • benefits principle

    the idea that people should pay taxes based on the benefits they receive from government services

  • collusion

    an agreement among firms in a market about quantities to produce or prices to charge

  • demand schedule

    a table that shows the relationship between the price of a good and the quantity demanded

  • liberalism

    the political philosophy according to which the government should choose policies deemed just, as evaluated by an impartial observer behind a “veil of ignorance”

  • marginal product of labor

    the increase in the amount of output from an additional unit of labor

  • market

    a group of buyers and sellers of a particular good or service

  • median voter theorem

    a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter

  • monetary neutrality

    the proposition that changes in the money supply do not affect real variables

  • normal good

    a good for which, other things being equal, an increase in income leads to an increase in demand

  • permanent income

    a person’s normal income

  • random walk

    the path of a variable whose changes are impossible to predict

  • rational people

    people who systematically and purposefully do the best they can to achieve their objectives

  • sacrifice ratio

    the number of percentage points of annual output lost in the process of reducing inflation by 1 percentage point

  • signaling

    an action taken by an informed party to reveal private information to an uninformed party

  • total cost

    the market value of the inputs a firm uses in production

  • Tragedy of the Commons

    a parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole

  • variable costs

    costs that vary with the quantity of output produced

  • velocity of money

    the rate at which money changes hands

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