Managerial Economics and Business Strategy 10th edition PDF summary Chapter 4 Questions and Answers 2023

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indifference curve - -A curve that defines the combinations of two goods that give a consumer the same level of satisfaction. -Marginal rate of substitution (MRS) - -The rate at which a consumer is... willing to substitute one good for another good and still maintain the same level of satisfaction. -budget set - -The bundles of good a consumer can afford. -budget line - -The bundles of goods that exhaust a consumer's income. -market rate of substitution - -The rate which one good may be traded for another in the market; slope of the budget line. -consumer equilibrium - -The equilibrium consumption bundle is the affordable bundle that yields the greatest satisfaction to the consumer. -substitution effect - -The movement along a given indifference curve that results from a change in the relative prices of goods, holding real income constant. -income effect - -The movement from one indifference curve to another that results from the change in real income caused by a price change. -production function - -A function that defines the maximum amount of output that can be produced with a given set of inputs. -fixed and variable factors of production - -Fixed factors are the inputs the manager cannot adjust in the short run. Variable factors are the inputs a manager can adjust to alter production. [Show More]

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