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Sheet1 13 - 6 Stock market - 2 Chapter 8 ----------------------Marginal Rate of Substitution - the rate at which a person will give up good y (good measured on y-axis) to get an additional u Perfect substitutes have straight indifference curves that slope downwards. Chapter 9 ----------------------Firm - institution that hires factors of production and organizes those factors to produce and sell goods and services Explicit Costs - Costs paid in money Implicit Costs - When a firm forgoes an alternative action but does not make a payment. For example when a firm uses its ow Implicit rental rate of capital - the rental income rate forgone (opportunity cost of a firm using its own capital). This consists of e Economic depreciation: the change in the market value of capital over a given period Normal profit: tge return that an entrepreneur can expect to receive on the average Economic profit: total revenue - opportunity cost (oc = explicit costs + implicit costs, which includes normal profit)********
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