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ASSUMPTIONS, KEYNESIAN ECONOMICS: The macroeconomic study of Keynesian economics relies on three key assumptions--rigid prices, effective demand, and savings-investment determinants. First, rigid or inflexible prices prevent some markets from achieving equilibrium in the short run. Second, effective demand means that consumption expenditures are based on actual income, not full employment or equilibrium income. Lastly, important savings and investment determinants include income, expectations, and other influences beyond the interest rate. These three assumptions imply that the economy can achieve a short-run equilibrium at less than full-employment production.
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LAW OF DIMINISHING MARGINAL UTILITY A principle stating that as the quantity of a good consumed increases, eventually each additional unit of the good provides less additional utility--that is, marginal utility decreases. Each subsequent unit of a good is valued less than the previous one. The law of diminishing marginal utility helps to explain the negative slope of the demand curve and the law of demand.
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WHITE GULLIBON
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Today, you are likely to spend a great deal of time searching for rummage sales seeking to buy either a set of luggage without wheels or a how-to book on wine tasting. Be on the lookout for pencil sharpeners with an attitude.
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The first U.S. fire insurance company was established by Benjamin Franklin in 1752 in Philadelphia.
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"It is not the straining for great things that is most effective; it is the doing of the little things, the common duties, a little better and better." -- Elizabeth Stuart Phelps, Writer
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IJIO
International Journal of Industrial Organization
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