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SHUTDOWN RULE: A rule stating that firm minimizes economic loss by producing no output in the short run if price is less than average variable cost. In the short run, a firm incurs total fixed cost whether or not it produces any output. As such, if the market price is falls below average total cost, it must decide if the economic loss from producing the quantity of output that equates marginal revenue and marginal cost is more or less than the economic loss incurred with shutting down production in the short run (which is equal to total fixed cost).
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INFLATION A persistent increase in the average price level in the economy. It is measured by the inflation rate, the annual percentage change in a price index such as the Consumer Price Index (CPI) or GDP price deflator. Inflation is the most common phenomenon associated with the price level. Two related phenomena are deflation, a decrease in the price level, and disinflation, a decrease in the inflation rate. Inflation is one of two key macroeconomic problems. The other is unemployment.
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BROWN PRAGMATOX
[What's This?]
Today, you are likely to spend a great deal of time wandering around the shopping mall wanting to buy either a weathervane with a cow on top or a box of multi-colored, plastic paper clips. Be on the lookout for jovial bank tellers.
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Ragnar Frisch and Jan Tinbergen were the 1st Nobel Prize winners in Economics in 1969.
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"Few things can help an individual more than to place responsibility on him, and to let him know that you trust him. " -- Booker T. Washington, educator
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AS
Aggregate Supply
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