# Questions tagged [marginal]

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### MR Diagrams touching y axis

The following is from an exam question: To my mind this is plain nonsense. If Q is zero, AR and MR are zero, not some point above P1. My question: is there any significance in drawing this diagram ...
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### Where does the optimal point of production occur in the graph of short-run cost curves?

When MC, ATC, AVC, and AFC are in the same diagram, where does the optimal point of production occur? I know production is optimal when MR=MC but the question doesn't give you the price of the good. ...
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### why is the MRS same for everyone?

If the consumers are optimizing and at interior solutions and facing the same prices, then the MRS=p1/p2 will be the same for everyone no matter the preferences and income. but why? I don't understand ...
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### Basics of MRS. Interpretation and constant utility

I am sure this question has been asked before but I didn't know what to search for since its a quite long question. Say, I have a utility function U = sqrt(x)*sqrt(y) and the MRS = y/x. Say I have y = ...
24 views

### Finding Quantity when Profit = 0

I'm struggling to find the correct answer which is (B). So far what I've done is say that P=MC as we're in a perfectly competitive market. So profit = PQ - TC which gives 0 = (2Q)Q -(VC+4) ? But we ...
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### Relationship between average cost and marginal cost

I cannot seem to reason why option B is a correct statement. From what I understood when AC = MC we're at a competitive equilibrium or break-even point and after that the more we move to the right the ...
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### What are the real world consequences of diminishing marginal utility?

I've just started a microeconomics course and the instructor has talked about diminishing marginal utility. I understand what it is, but I'm struggling to understand why it matters. What are the real ...
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### What is meant by "marginal disutility of labor" in Keynes General Theory

Sorry for the newby question, started reading Keynes general theory (1936) and am confused by this paragraph in Chapter 2: The traditional theory maintains, in short, that the wage bargains between ...
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### Why does marginal return decrease and marginal cost increase? [duplicate]

I somewhat understand why marginal returns decrease more so than I understand why marginal costs increases. If it costs you 5 dollars to make 1 unit of something, why would it cost you more to make ...
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### Is there a name for relative diminishing returns, or relative increasing opportunity cost?

Consider the following hypothetical situation: You are producing something where the total amount produced, $A$, is equal to the product of two factors, $X$ and $Y$. Hence $A=X*Y$. $X$ and $Y$ both ...
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### What happens to marginal revenue when quantity does not change?

The marginal revenue is defined (at least in my Econ 101 course) as $\Delta TR/\Delta Q$. However, say I am examining a town with $10,000$ people, and at a nonzero certain price, $10,000$ people ...
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### Fundamental question on marginal utility

I was just thinking back to some introductory economics courses, but now I'm extremely confused on a fundamental concept. How is marginal utility interpreted as the additional "happiness" ...
1 vote
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### Unsolveable Demand/Utility Problem?

A consume has a preference relation on $\mathbb{R}^4_+$ with a utility function defined as $$U(x_1,x_2,x_3)=(\ln(3x_1+2x_2+x_3))^3$$ Find the demand at prices $p=(1,1,1)$ and wage $4$. Attempt I ...
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### Demand curve is same as Marginal Benefit curve?

Demand curve is same as Marginal Benefit curve [Source: Microeconomics by Pindyck & Rubinfeld, Chapter 10, Section 5 - Monopsony]. I have only seen intuitive explanations for this statement. Can ...
1 vote
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### Equivalence of producer surplus areas

I really can't understand how the sum of the rectangles leads to the sum of the triangle. My book's(Chapter 12, page 430) explanation is: Equivalence of these areas can be shown by recognizing that ...
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### Determine marginal revenue given demand curve and marginal cost

a)Determine marginal revenue curve if firm can only charge 1 price,List demand curve,marginal revenue curve,,marginal cost,average total cost equations. b)What is optimal price and quantity? c)If firm ...
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### Relation between marginal cost and output elasticities

Does anyone know of any results that show the link between marginal cost and the output elasticities analytically? I am looking at production and cost theory books but can't find any results that ...
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### Competitive wages under imperfect information

Do competitive wages always have to be defined by marginal productivity? Can we have competitive wages which are not based on productivity, when the information is not perfect? To put it in context, ...
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### Why marginal benefit is decreasing as more and more pizzas are being produced?

I'm taking one of my initial courses in Economics on my own and currently reading Economics by McConnel, Brue and Flynn. On the page 13, the book is trying to explain about Optimal Allocation. They ...
1 vote
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### About marginal cost setting on Jordi Gali's work

I'm studying Gali's work with the paper(or book?) which is "Jordi Gali, Monetary policy inflation and the business cycle_An introduction to the new keynesian framework(2015)" and wonder one ...
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### Explaining negative "cyclic" unemployment with a production function

First of all, here is a related post. Unfortunately, it does not answer my question. I have heard that there is an understanding of negative unemployment in economic theory. Obviously, absolute ...