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on 23-Sep-2015 (Wed)
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Flashcard 149624416
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Parent (intermediate) annotation
Open itIn Market Segmentation Theory of yield curve shape, financial instruments of different terms are not substitutable.
Original toplevel document
Yield curve - Wikipedia, the free encyclopediabecause of the risk premium added by the risk of default from holding a security over the long term. The market expectations hypothesis is combined with the liquidity premium theory: Where is the risk premium associated with an year bond. <span>Market segmentation theory[edit] This theory is also called the segmented market hypothesis. In this theory, financial instruments of different terms are not substitutable. As a result, the supply and demand in the markets for short-term and long-term instruments is determined largely independently. Prospective investors decide in advance whether they need short-term or long-term instruments. If investors prefer their portfolio to be liquid, they will prefer short-term instruments to long-term instruments. Therefore, the market for short-term instruments will receive a higher demand. Higher demand for the instrument implies higher prices and lower yield. This explains the stylized fact that short-term yields are usually lower than long-term yields. This theory explains the predominance of the normal yield curve shape. However, because the supply and demand of the two markets are independent, this theory fails to explain the observed fact that yields tend to move together (i.e., upward and downward shifts in the curve). Preferred habitat theory[edit] The preferred habitat theory is another guide of the liquidity premium theory, and states that in addition to interest rate expectations, investors have di
Flashcard 150916530
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Parent (intermediate) annotation
Open itdy>we represent a consumer 's equilibrium bundle of goods, the most preferred affordable combination of Good X and GoodY, as the point where the highest attainable indifference curve is just tangent to the budget line.<body><html>
Original toplevel document (pdf)
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Flashcard 150917836
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Parent (intermediate) annotation
Open itNormal profit is the accounting profit that makes economic profit zero.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150917842
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Parent (intermediate) annotation
Open itNormal profit is the accounting profit that makes economic profit zero.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150917848
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Parent (intermediate) annotation
Open itNormal profit is the accounting profit that makes economic profit zero.
Original toplevel document (pdf)
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Flashcard 150917861
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Parent (intermediate) annotation
Open itNormal profit is the accounting profit that the firm must earn to just cover implicit opportunity costs.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150917867
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Parent (intermediate) annotation
Open itNormal profit is the accounting profit that the firm must earn to just cover implicit opportunity costs.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150917873
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
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Parent (intermediate) annotation
Open itNormal profit is the accounting profit that the firm must earn to just cover implicit opportunity costs.
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Flashcard 150917883
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
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Parent (intermediate) annotation
Open iteconomic profit = (accounting profit - normal profit)
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150917889
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
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Parent (intermediate) annotation
Open iteconomic profit = (accounting profit - normal profit)
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150917895
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
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Parent (intermediate) annotation
Open iteconomic profit = (accounting profit - normal profit)
Original toplevel document (pdf)
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Flashcard 150917905
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Parent (intermediate) annotation
Open itan economic profit of zero is what we expect in equilibrium . That's why economic profits are called abnormal profits.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150917911
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Parent (intermediate) annotation
Open itan economic profit of zero is what we expect in equilibrium . That's why economic profits are called abnormal profits.
Original toplevel document (pdf)
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Flashcard 150917921
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Parent (intermediate) annotation
Open itWith reference to RideRight, economic profit is zero, and accounting profits are $50,000, so normal profit must be $50,000.
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Flashcard 150917931
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Parent (intermediate) annotation
Open itEconomic rent is used to describe a payment to a factor of production above its value in its next highest-valued use (its opportunity cost).
Original toplevel document (pdf)
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Elasticity of Supply - Revisionguru
and, there are special cases of elasticity of supply. If elasticity is equal to one then the good will have unitary elasticity; meaning a percentage change in price will lead to an equal percentage change in the quantity supplied. <span>A perfectly inelastic supply curve, with a value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand. Elasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero.
Flashcard 150917955
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Parent (intermediate) annotation
Open itA perfectly inelastic supply curve, with elasticity value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand. </
Original toplevel document
Elasticity of Supply - Revisionguruand, there are special cases of elasticity of supply. If elasticity is equal to one then the good will have unitary elasticity; meaning a percentage change in price will lead to an equal percentage change in the quantity supplied. <span>A perfectly inelastic supply curve, with a value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand. Elasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero.
Flashcard 150917961
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
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Parent (intermediate) annotation
Open itA perfectly inelastic supply curve, with elasticity value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand.
Original toplevel document
Elasticity of Supply - Revisionguruand, there are special cases of elasticity of supply. If elasticity is equal to one then the good will have unitary elasticity; meaning a percentage change in price will lead to an equal percentage change in the quantity supplied. <span>A perfectly inelastic supply curve, with a value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand. Elasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero.
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Elasticity of Supply - Revisionguru
ntage change in price will lead to an equal percentage change in the quantity supplied. A perfectly inelastic supply curve, with a value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand. <span>Elasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero. Sponsored Links Pages Economics Economics AS Unit 1 The economic problem Needs and wants The economic problem Scarcity Opportunity cost Economic resources (factors
Flashcard 150917974
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Parent (intermediate) annotation
Open itElasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero.
Original toplevel document
Elasticity of Supply - Revisionguruntage change in price will lead to an equal percentage change in the quantity supplied. A perfectly inelastic supply curve, with a value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand. <span>Elasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero. Sponsored Links Pages Economics Economics AS Unit 1 The economic problem Needs and wants The economic problem Scarcity Opportunity cost Economic resources (factors
Flashcard 150917980
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Parent (intermediate) annotation
Open itElasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero.
Original toplevel document
Elasticity of Supply - Revisionguruntage change in price will lead to an equal percentage change in the quantity supplied. A perfectly inelastic supply curve, with a value of zero, means that the quantity supplied doesn’t change irrespective of the level of demand. <span>Elasticity of supply is equal to infinity when it is perfectly elastic; any decrease in price will lead to the quantity supplied falling to zero. Sponsored Links Pages Economics Economics AS Unit 1 The economic problem Needs and wants The economic problem Scarcity Opportunity cost Economic resources (factors
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Flashcard 150917993
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Parent (intermediate) annotation
Open itwe can think of economic rent as the portion of a payment to a resource that does not increase the quantity supplied.
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Flashcard 150918003
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Parent (intermediate) annotation
Open itWhen resources owned or otherwise employed by the firm generate economic rents, the firm earns economic profits as a result because total revenues exceed the sum of explicit and implicit costs.
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Flashcard 150918059
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Parent (intermediate) annotation
Open itTotal revenue (TR) for any firm that charges a single price to all customers is calculated as price multiplied by quantity sold, or TR = P x Q.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918066
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Parent (intermediate) annotation
Open itTotal revenue (TR) for any firm that charges a single price to all customers is calculated as price multiplied by quantity sold, or TR = P x Q.
Original toplevel document (pdf)
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Flashcard 150918079
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Parent (intermediate) annotation
Open itAverage revenue (AR) is equal to total revenue divided by the quantity sold, or AR = TR/Q
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918085
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Parent (intermediate) annotation
Open itAverage revenue (AR) is equal to total revenue divided by the quantity sold, or AR = TR/Q
Original toplevel document (pdf)
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Flashcard 150918099
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Parent (intermediate) annotation
Open itMarginal revenue (MR) is the increase in total revenue from selling one more unit of a good or service.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918105
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Parent (intermediate) annotation
Open itMarginal revenue (MR) is the increase in total revenue from selling one more unit of a good or service.
Original toplevel document (pdf)
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Parent (intermediate) annotation
Open itFor a firm in a perfectly competitive market, all units are sold at the same price regardless of quantity, so that average revenue and marginal revenue are both equal to the market price, or AR = MR = price.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918119
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
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Parent (intermediate) annotation
Open itFor a firm in a perfectly competitive market, all units are sold at the same price regardless of quantity
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918125
| status | not learned | measured difficulty | 37% [default] | last interval [days] | |||
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Parent (intermediate) annotation
Open itFor a firm in a perfectly competitive market, all units are sold at the same price regardless of quantity, so that average revenue and marginal revenue are both equal to the market price, or AR = MR = price.
Original toplevel document (pdf)
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Parent (intermediate) annotation
Open itFirms operating under imperfect competition face downward-sloping demand curves. Unlike firms operating under perfect competition, firms in imperfect competition must decide what price to charge for their product. For this reason, firms that face
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918139
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Parent (intermediate) annotation
Open itFirms operating under imperfect competition face downward-sloping demand curves.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918145
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Parent (intermediate) annotation
Open itFirms operating under imperfect competition face downward-sloping demand curves.
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Parent (intermediate) annotation
Open itFirms operating under imperfect competition face downward-sloping demand curves. Unlike firms operating under perfect competition, firms in imperfect competition must decide what price to charge for their product. For this reason, firms that face downward- sloping demand curves are referred to as price searchers.
Original toplevel document (pdf)
cannot see any pdfsFlashcard 150918155
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Parent (intermediate) annotation
Open itfirms in imperfect competition must decide what price to charge for their product. For this reason, firms that face downward- sloping demand curves are referred to as price searchers.
Original toplevel document (pdf)
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Flashcard 150918165
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Parent (intermediate) annotation
Open itTo sell a greater quantity, price- searcher firms must decrease the price.