MicroFHess Essay Example | Topics and Well Written Essays - 1500 words

MicroFHess - Essay ExampleExample as more and more fertilizers are diligent by the famers, production of crops may increase by the same unit of fertilizers employed, ceteris paribus.3. Economic profit is the difference between revenues received from the sale of takings and opportunity cost (Mankiw, 1998). For example, the difference between incomes received from exchange a car and forgone alternatives of making that car.4. Law of diminishing returns states that when other factors are held constant any supererogatory unit of input leads to an increase in output at a declining rate till at a certain full stop where any additional input leads to a decline in output (Hall and Lieberman, 2010). For example, if more fertilizers are added in the production of wheat the output increases till a certain point when any additional unit of fertilizers added leads to a decline in output of wheat.5. Marginal product of repel is the additional amount of output that is being produced when a fi rm decide sto employ additional take in the production process (Hall and Lieberman, 2010). For example, a firm may produces 10 units of output with a compass of 5 people, and after adding another 5 people output may increases to 20 units.6. Monopolistic competition. Is a type of market structure with many sellers selling similar but differentiated products whereby each seller has the freedom of setting his or her own selling price (Mankiw, 2011). Example in the United States many sellers differentiate their products and the prices for those products (Mankiw, 2011).7. Sunk cost refers to the amount of money that has already been spent and can not be recovered (Hall and Lieberman, 2010). For example Amount of money incurred by investor to start and operate a business.8. The principal-agent problem refers to a conflict of interest that arises when the agent pursues the same interest as his principal (Mankiw, 2011). Example car head hires an agent to sell his cars to particular