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RISK PREMIUM: This has two very closely related uses. First, it's what risk averse people are willing to pay to avoid a risky situation. For example, if you would be equally happy with a guaranteed $900 or a 50-50 chance of getting either $500 or $1,500, then you're risk premium is $100. Second, it's the extra percentage points added to an interest rate to compensate for the risk of a loan. As a general rule, each 1 percent chance of default on a loan adds a risk premium of about 1 percent to the interest rate.

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PERFECT COMPETITION, REVENUE DIVISION

The marginal approach to analyzing a perfectly competitive firm's short-run profit maximizing production decision can be used to identify the division of total revenue among variable cost, fixed cost, and economic profit. The U-shaped cost curves used in this analysis provide all of the information needed on the cost side of the firm's decision. The demand curve facing the firm (which is also the firm's average revenue and marginal revenue curves) provides all of the information needed on the revenue side.

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Today, you are likely to spend a great deal of time at a flea market seeking to buy either a set of steel-belted radial snow tires or a wall poster commemorating the 2000 Presidential election. Be on the lookout for florescent light bulbs that hum folk songs from the sixties.
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This isn't me! What am I?

Natural gas has no odor. The smell is added artificially so that leaks can be detected.
"Don't be afraid of the space between your dreams and reality. If you can dream it, you can make it so."

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