–ė—Ā–ļ–Ľ—é—á–Ķ–Ĺ–ł—Ź–ľ–ł —Ź–≤–Ľ—Ź—é—ā—Ā—Ź –ļ–ĺ–Ĺ—ā–Ķ–Ļ–Ĺ–Ķ—Ä—č –≤ –ļ–į—Ą–Ķ –ł —Ä–Ķ—Ā—ā–ĺ—Ä–į–Ĺ–į—Ö
Made by¬†Mykyta Siedov
The¬†article is not¬†ready yet. The¬†forecast of¬†completion is 08.08.2021
The¬†purpose of¬†the¬†project is to¬†make caged bike parking within the¬†city.
BikeBox, for¬†investors Author: Daniil Kovekh. Models and¬†photos are intended for¬†informational purposes.
The¬†project‚Äôs purpose was to¬†get the¬†highest score in¬†the¬†university‚Äôs idea competition to¬†continue the¬†project in¬†the¬†future.
There were five members in¬†a¬†team. With the¬†team, we created the¬†business canvas, video, the¬†presentation. We counted costs and¬†potential income. We found the¬†target audience and¬†market size.
Unfortunately, only I was ready to¬†continue the¬†project due to¬†the¬†project‚Äôs high costs and¬†legal problems.
I am looking for¬†a¬†new team with a¬†technical, economic, programming, design, and¬†law background.
If you are interested in¬†this project
Write an¬†email to¬†Daniil@koveh.com, or¬†leave a¬†comment below.
Due to¬†the¬†domain loss, Coldcaller is not¬†available for¬†registering and¬†using the¬†profile. This happened because I set PHP and¬†SQL for¬†coldcaller.ru. Most of¬†the¬†project files are still available, which means that I can set everything as¬†it was before.
An¬†online bookcrossing p2p and¬†b2c platform. The¬†target audience: Russian population, 14-30, 55-75 years old, living in¬†big cities.
What people do on¬†Bookchange
On¬†Bookchange, people find books, bookstores, bookcrossing points, libraries, and¬†readers‚Äô clubs. Bookchange is also a¬†place where people buy, sell, give away, and¬†rent books. Bookstores sell books in¬†case if the¬†book is not¬†available on¬†the¬†p2p platform.
Bookchange aims to¬†create a¬†community of¬†readers, make reading less expensive, and¬†protect our nature.
How to¬†monetize the¬†project
Money comes from advertisements in¬†bookshops (online/offline), libraries, and¬†cafes.
Furthermore, we can advertise publishers, books, audiobooks, and¬†podcasts.
Bookchange can be responsible for¬†rent and¬†trading activities, where we guarantee to¬†receive full payment.
What happened with the¬†project
Unfortunately, I have suspended the¬†project since 2019. I did not¬†have enough knowledge to¬†start with design and¬†end with the¬†backend alone. I am still willing to¬†continue this project but¬†in¬†Vienna. The¬†bookcrossing infrastructure here is more developed than in¬†Moscow.
bookchange.org (link to¬†the¬†mirror of¬†a¬†site)
Guitar AI 2018
project of¬†self-playing physical guitar that I made as¬†a¬†school project. I used C, Arduino, Bluetooth technology, and¬†web programming to¬†make it work.
Due to¬†financial restrictions, the¬†total cost of¬†a¬†project was less than 35‚ā¨, so the¬†main part was the¬†code.
Case study 1
Mr x is a¬†resident in¬†country A, and¬†he has a¬†wife and¬†two children.
- Salary¬†‚Äď Taxable
- Consulting fee made once¬†‚Äď Non-taxable if made once.
- Bank interest payment¬†‚Äď usually not¬†taxable?
- Capital gain from selling market shares¬†‚Äď Taxable usually.
- Rent payments or¬†inheritance¬†‚Äď Taxable in¬†AT, but¬†typically not.
- Lottery wins¬†‚Äď in¬†Russia, yes, but¬†generally not¬†taxable. Professional players must pay taxes.
Taxable income: typical sources
- employment¬†‚Äď most popular type of¬†income
- agriculture¬†‚Äď not¬†a¬†high piece in¬†developed countries
- investment income
- use of¬†intangibles (royalties)
- Capital gains = sales¬†‚Äď cost.
Do all sources of¬†income suffer the¬†same tax burden?
For¬†investment income, we have a¬†27.5 percent tax.
For¬†real estate, we have a¬†30% tax.
Income tax rates
- there is no¬†natural rate of¬†tax.
- It depends only on¬†policy.
- People usually mean income tax when saying about tax rates.
- Income taxes take a¬†considerable part with nothing in¬†return. It creates anger.
Income taxpayers and¬†nontaxpayers are voters. So the¬†social needs have to¬†be solved by¬†taxes.
Ways to¬†design rates
- Flat rate¬†‚Äď the¬†easiest to¬†count.
- Progressive rate increases with higher income.
If you have >1m‚ā¨ per¬†year in¬†Austria, you pay 55% of¬†tax; >100k‚ā¨ 50% of¬†tax.
Political parties use the¬†lowering of¬†low-income taxpayers (30-40% of¬†the¬†population) even though they pay too low taxes.
How is income tax levied?
- on¬†annual bass
- Taxpayer files a¬†tax return
- The¬†tax office assesses the¬†tax due
by¬†withholding tax (tax levied by¬†payor), e.¬†g., for:
- Employment income
- Investment income
- In¬†some countries: capital gains
Withholding taxes are outsourcing for¬†tax regulators. Withholding tax makes
The¬†employer pays all the¬†taxes instead of¬†the¬†employee.
Tax administration then always gets money at¬†a¬†time without minor problems as¬†in¬†case if employee paid it.
Withholding taxes employers pay monthly.
Pros and¬†cost of¬†withholding taxes
- WHT secures tax revenues
- WHT is efficient for¬†tax administrations (but¬†creates risks for¬†payors)
- WHT usually works on¬†a¬†gross basis (no¬†deductions from WHT base)
Case study: which expenses are tax-deductible?
Mr. X has made the¬†following expenses in¬†Y1:
- ‚ā¨1000 for¬†expert literature (for¬†his job)¬†‚Äď Tax-deductible, because the¬†book can be helpful only with his job
- ‚ā¨500 for¬†the¬†business suit¬†‚Äď generally tax-deductible, but¬†in¬†some cases, the¬†government can say that you bought these clothes for¬†everyday use. Example with McDonald‚Äôs outfit¬†‚Äď Tax-Deductible, because no¬†one uses this outfit, not¬†on¬†work.
- Travel cost to¬†the¬†work¬†‚Äď Can be tax-deductible and¬†can be not, depends on¬†policies.
- Renovation of¬†the¬†apartment last year with¬†‚ā¨0 for¬†rent¬†‚Äď renovation is made once in¬†10-20 years, so this year was nothing made, so no¬†taxes.
- A¬†donation to¬†the¬†Red Cross of¬†‚ā¨200¬†‚Äď Is not¬†tax-deductible. It is not¬†based on¬†business will but¬†the¬†will of¬†a¬†person. Sometimes policies incentivize donations in¬†specific organizations.
Is income tax based on¬†a¬†gross or¬†net basis?
Tax, commonly based on¬†net income:
- as¬†a¬†consequence of¬†the¬†ability to¬†pay principle
- Expenses related to¬†items of¬†taxable income are generally tax-deductible
Tax, based on¬†gross taxation
- In¬†scheduler systems for¬†specific categories of¬†income
- Where WHTs are applied¬†‚Äď then voluntary tax assessment could be possible.
Specific types of¬†expenses might be declared non-deductible, e.¬†g.,
- if relating to¬†private life
- if relating to¬†non-taxable income
- criminal fines, penalties
Sometimes generally, non-deductible are specifically made deductible:
- Various policy reasons for¬†granting deductions
- E.g., housing loan, interest, specific donations, etc.
Mr. X has family-related expenses in¬†Y1:
- Child support¬†‚ā¨500¬†‚Äď
- School fees¬†‚ā¨5000
Overall, Mr. X covers the¬†general cost of¬†living for¬†his entire family.
Income tax and¬†family situation
Various design options to¬†reflect family situations for¬†income tax purposes.
Individual taxation¬†‚Äď not¬†reflected at¬†all:
- Instead, typically, tax credits (or¬†other family subsidies) are granted.
- Overall, family income irrelevant to¬†progressive tax rates.
Family/household taxation¬†‚Äď overall family income as¬†a¬†tax base:
-Divided by¬†the¬†number of¬†family members (e.¬†g., was in¬†France)
- Strong lowering effect on¬†progressive tax rates.
Marriage split¬†‚Äď Family taxation for¬†married couples:
A¬†limited form of¬†family taxation
- Equal treatment of¬†unmarried couples/singles
- All policy options have different effects
Why are taxes necessary?
- for¬†government¬†‚Äď a¬†source of¬†revenue
- for¬†business¬†‚Äď the¬†cost of¬†(food, income are taxed) business/living
- for¬†society¬†‚Äď a¬†price for¬†civilization (Oliver Wendell Holmes)
How to¬†measure the¬†importance of¬†taxes?
- tax to¬†GDP ratio
- ‚ÄúHigh‚ÄĚ and¬†‚Äúlow‚ÄĚ tax countries
- Is there a¬†‚Äúright‚ÄĚ / ‚Äúfair‚ÄĚ level of¬†tax?
Austria has Tax/GDP = 40%. The¬†government wants to¬†lower it, but¬†it is not¬†possible for¬†now. The¬†re are low and¬†high tax countries: AT¬†and¬†Germany are high-tax, Hungary and¬†Switzerland have low-tax.
There is a¬†suitable level of¬†tax: high tax countries provide better services: Free universities, free insurance, and¬†high pensions.
In¬†low-tax countries, services are mostly paid: In¬†Switzerland, citizens should pay for¬†insurance.
VAT is 20% for¬†every consumption is significant.
There are income taxes of¬†40%-50% in¬†AT. Taxes have a¬†significant impact on¬†the¬†taxpayers‚Äô budget.
Government should adequately justify the¬†amount of¬†tax paid.
Public deficit: Gov spends more money than it gains.
Taxes can help to¬†attract businesses: Ireland was one of¬†the¬†poorest nations in¬†The¬†EU. At¬†the¬†end of¬†20 century, Ireland decreased the¬†tax to¬†12.5% from 25%. The¬†population increased by¬†25%, and¬†before, it was the¬†immigration country. The¬†Republic of¬†Ireland has become so successful that the¬†UK fears that Northern Ireland will become a¬†part of¬†Ireland.
What is a¬†tax?
- Imposed by¬†legislation / levied by¬†the¬†government
- Under the¬†rule of¬†law
- For¬†a¬†public purpose
- Not¬†paid in¬†exchange for¬†a¬†specific service to¬†the¬†taxpayer
In¬†the¬†UK, there was a¬†discussion that Social networks do not¬†pay enough taxes. People say that they have to¬†pay more. The¬†law did not¬†require that, but¬†there was a¬†public opinion. Some companies voluntarily pay more taxes to¬†the¬†budget to¬†satisfy the¬†public.
There should be a¬†law where it stays that a¬†taxpayer has to¬†pay the¬†taxes. It goes deep into history.
The¬†rule of¬†law means that the¬†payment should be within the¬†limits of¬†the¬†law. High-income people pay more taxes than others, and¬†this is due to¬†democracy: The¬†majority wants wealthy people to¬†pay more.
After the¬†last financial crisis in¬†2008, many countries asked banks to¬†pay additional taxes to¬†a¬†fund. The¬†government spends money to¬†rescue packages. So they were forced to¬†pay more without any return, even though that banks pay the¬†highest taxes.
Government imposes (–ĺ–Ī–Ľ–į–≥–į—ā—Ć—Ā—Ź) / levies (–≤–∑—č–ľ–į—ā—Ć—Ā—Ź) taxes on¬†different levels of¬†States:
States are free to¬†choose the¬†amount of¬†state income taxes.
Florida is an¬†example of¬†a¬†no-state tax, but¬†it still has the¬†federal tax.
There are such municipal taxes (fees) in¬†Vienna as¬†property-related taxes.
What types of¬†taxes may exist?
- Income tax¬†‚Äď has become less critical over time.
- Corporate income tax¬†‚Äď Corporate income tax is relatively low
- Value-added tax (VAT)/ goods and¬†services taxes (GST)/ sales taxes. Most important, biggest tax in¬†the¬†EU
- Wealth taxes
- Inheritance and¬†gift taxes
- Real estate transfer taxes
- Consumption taxes
- Energy taxes¬†‚Äď e.¬†g., help to¬†decrease the¬†carbon footprint.
Is there a¬†perfect tax mix?
The¬†US does not¬†have the¬†VAT, but¬†it has the¬†sales tax much lower than VAT in¬†the¬†EU. However, the¬†corporate income is much higher than in¬†the¬†EU.
There are not¬†enough consumption and¬†income taxes in¬†developing countries, so the¬†corporate tax is high.
Inflation is essential now. In¬†some decades, money will lose half of¬†its cost due to¬†inflation. That means that people have to¬†spend their money, consume. The¬†government will get its VAT.
What is a¬†purpose of¬†a¬†tax?
- to¬†generate revenue for¬†public budgets
- to¬†influence behavior
- To¬†price-in external cost (Pigouvian Taxes)¬†‚Äď A¬†carbon tax.
- To¬†purpose non-tax goals. e.¬†g., many tax-exemptions, non-deductions.
Tobacco taxes are paid for¬†centuries even though the¬†harm from them was discovered only in¬†the¬†20th century. The¬†tax was not¬†about behavior before, but¬†the¬†way how to¬†get extra cash. If gov wants to¬†get rid of¬†tobacco behavior, then gov has to¬†raise tobacco taxes in¬†New Zealand significantly.
In¬†AT¬†salaries as¬†5k‚ā¨ and¬†more cannot be tax-deductable because the¬†income was too high.
People in¬†retail, supermarket workers, have a¬†low payment. The¬†government wants to¬†increase the¬†income of¬†these workers by¬†deducting some taxes.
Is a¬†specific purpose/justification legally needed at¬†all?
For¬†the¬†tax as¬†such?/ For¬†the¬†design of¬†a¬†specific tax?
Germany has a¬†problem with introducing carbon taxes. The¬†constitution stays that people and¬†companies pay taxes on¬†consumption, but¬†carbon emission is not¬†consumption; it is production.
Austria can do that, but¬†then everyone will have to¬†pay taxes on¬†the¬†breath.
Who decides on¬†a¬†tax system?
Taxes are at¬†the¬†core of¬†State sovereignty.
‚ÄúThe¬†power to¬†tax is the¬†power to¬†govern‚ÄĚ¬†‚Äď ‚ÄúTaxes are politics converted into money.‚ÄĚ
Tax sovereignty may result in¬†tax competition between states¬†‚Äď pros and¬†cons.
- VAT¬†‚Äď fully harmonized (but¬†not¬†on¬†the¬†tax rate: standard rate from 15% to¬†27%. E.g., Hungary has 27%)
- Income tax¬†‚Äď not¬†harmonized
- Corporate income tax¬†‚Äď Common (Consolidated) Corporate Tax Base (CC(C)TB) proposed
- Anti Tax Avoidance Directive (ATAD)
- EU fundamental Freedoms¬†‚Äď to¬†ensure non-discrimination in¬†the¬†Single Market
- Prohibition of¬†State Aid¬†‚Äď to¬†ensure fair competition
International Agreements (Tax treaties)¬†‚Äď to¬†avoid international double taxation.
Absolute advantage. when country a¬†can produce a¬†good cheaper than another.
Accounting cost. actual expenses + depreciation for¬†capital equipment.
Actual return. return that an¬†asset earns.
Actuarially fair. situation where an¬†insurance payment = the¬†expected payout.
Adverse selection. market failure, where companies sell products of¬†different qualities at¬†a¬†single price due to¬†asymmetric information.
Advertising elasticity of¬†demand. % change in¬†quantity demanded resulting from 1% increase of¬†advertising expenditures.
Advertising-to-sale ratio. advertising expenditures/ sales
Agent. the¬†Individual employed by¬†a¬†principal (director) to¬†achieve the¬†principal‚Äôs objective.
Amortization. Policy of¬†treating a¬†one-time expenditure as¬†an¬†annual cost spread out over some years.
Anchoring (—Ź–ļ–ĺ—Ä–Ĺ–ĺ—Ā—ā—Ć). Tendency to¬†rely heavily on¬†one prior piece of¬†information when making a¬†decision.
Antitrust laws. Rules and¬†regulations prohibit actions that can restrain competition.
Arbitrage. the¬†practice of¬†buying at¬†a¬†low price in¬†one place and¬†selling higher in¬†another.
Arc elasticity demand. price elasticity that is calculated over a¬†range of¬†prices.
Asset. Something that provides a¬†flow of¬†money or¬†services to¬†the¬†owner.
? Asset beta. constant that measures the¬†sensitivity of¬†an¬†asset‚Äôs return to¬†market movements and, therefore, the¬†asset‚Äôs non-diversifiable risk.
Asymmetric information. a¬†situation in¬†which a¬†buyer and¬†a¬†seller possess different information about a¬†transaction.
Auction market. a¬†market in¬†which products are bought and¬†sold through formal bidding processes.
Average expenditure curve. supply curve representing the¬†price per¬†unit that a¬†firm pays for¬†a¬†good.
Average expenditure. the¬†price paid per¬†unit of¬†a¬†good.
Average fixed cost. Fixed cost / the¬†level of¬†output(?).
Average product. Output per¬†unit of¬†a¬†particular input.¬†
Average total cost. Firm‚Äôs total cost / the¬†level of¬†output.¬†
Average variable cost. variable cost / the¬†level of¬†input.
Bad. the¬†good that is less preferred than more.
Bandwagon (–ľ–į—Ā—Ā–ĺ–≤–ĺ–Ķ –ī–≤–ł–∂–Ķ–Ĺ–ł–Ķ)effect. when a¬†person buys something because others do it either. Positive network externality in¬†which a¬†consumer wishes to¬†possess good in¬†part because others do.¬†
Barrier to¬†entry. Conditions impede (block) entry by¬†new competitors. E.g., when the¬†prices to¬†start are too high or¬†if the¬†monopolists prohibit you from being a¬†partner with anyone.
? Bertrand model. Oligopoly model in¬†which firms produce a¬†homogeneous good, each firm treats the¬†price of¬†its competitors as¬†fixed, and¬†all firms decide simultaneously what price to¬†change.
Bilateral monopoly. Market with one seller and¬†one buyer.
Block pricing. charging different prices for¬†different quantities (‚Äúblocks‚ÄĚ) of¬†a¬†good.
Bond. contract in¬†which a¬†borrower agrees to¬†pay the¬†bondholder (the¬†lender) a¬†stream of¬†money
Bubble. An¬†increase of¬†price not¬†based on¬†fundamentals of¬†demand or¬†value, but¬†instead on¬†a¬†belief that the¬†price will keep going up.
Budget constraints. Constraints that consumers face as¬†a¬†result of¬†limited incomes.
Budget line. All combinations of¬†goods for¬†which the¬†total amount of¬†money spent = income.
Bundling. Practice selling two or¬†more products as¬†a¬†package.
Capital Asset Pricing Model (CAPM). Model in¬†which the¬†risk premium for¬†a¬†capital investment depends on¬†the¬†correlation of¬†the¬†investments return with the¬†return on¬†the¬†entire stock market. (If your return less the¬†market return, then you‚Äôll be paid on¬†this amount?)
? Cardinal utility function. Utility function describing by¬†how much one market basket is preferred to¬†another.
Cartel. Market in¬†which some of¬†all firms explicitly collude (cooperate in¬†a¬†secret by¬†the¬†unlawful way), coordinating prices and¬†output levels to¬†maximize joint profits.
Chain-weighted price index. Cost-of-living index that accounts for¬†changes in¬†quantities of¬†goods and¬†services.
?Coase theorem. Principle that when parties can bargain without cost and¬†to¬†their mutual advantage, the¬†resulting outcome will efficient regardless of¬†how property rights are specified
Cobb-Douglas production function. q = AK^√•L^√ü, where q is the¬†rate of¬†output, K is the¬†quantity of¬†capital, and¬†L is the¬†quantity of¬†labor, and¬†where A, √•, and¬†√ü are constants.
Cobb-Douglas utility function. U(X, Y) = A^√•*Y^(1-√•), where X and¬†Y are two goods and¬†a¬†is a¬†constant.¬†
Common property resource. a¬†resource to¬†which anyone has free access.
Common-value auction. Auction in¬†which the¬†item has the¬†same value to¬†all bidders, but¬†bidders don‚Äôt know. That value precisely and¬†their estimates of¬†it vary.
Company cost of¬†capital. Weighted avatar of¬†the¬†expected return on¬†a¬†company‚Äôs stock and¬†the¬†interest Tate that it pays for¬†debt.
Comparative advantage. situation, in¬†which country 1 has an¬†advantage over country 2 in¬†producing a¬†good because the¬†cost of¬†producing the¬†good in¬†1, relative to¬†the¬†cost of¬†producing other goods in¬†1, is lower than the¬†cost of¬†producing the¬†good in¬†2, relative to¬†the¬†cost of¬†producing other goods in¬†2.¬†
Complements. two goods for¬†which an¬†increase in¬†the¬†price of¬†one leads to¬†a¬†decrease in¬†the¬†quantity demanded of¬†the¬†ofter.
Completely inelastic demand. Principle that consumers will buy a¬†fixed quantity of¬†a¬†good regardless of¬†its price.
Condominium. A¬†housing unit that is individually owned but¬†provides access to¬†common facilities that are paid for¬†and¬†controlled jointly by¬†an¬†association of¬†owners.¬†
Constant returns to¬†scale. Situation in¬†which output doubles when all inputs are doubled.¬†
Constant-cost Industry. Industry whose long-run supply curve is horizontal.¬†
Consumer Price Index. Measure of¬†the¬†aggregate (—Ā–ĺ–≤–ĺ–ļ—É–Ņ–Ĺ—č–Ļ) price level.¬†
Consumer surplus. Difference between what a¬†consumer is willing to¬†pay for¬†a¬†good and¬†the¬†amount actually paid.¬†
Constant curve. curve showing all efficient allocations of¬†goods between who consumers, or¬†of¬†two inputs between two production functions.
Cooperative. Association of¬†businesses, or¬†people jointly owned and¬†operated by¬†members for¬†mutual benefit.¬†
Cooperative game. game in¬†which participants can negotiate binding contracts that allow them to¬†plan joint strategies.
Corner solution. a¬†situation in¬†which the¬†marginal rate of¬†substitution of¬†one good for¬†another in¬†a¬†chosen market basket is not¬†equal to¬†the¬†slope of¬†the¬†budget line.
Cost function. Function relating the¬†cost of¬†production to¬†the¬†level of¬†output and¬†other variables that the¬†firm can control.
Cost-of-living index. Ration of¬†the¬†present cost of¬†a¬†typical bundle of¬†consumer goods and¬†services compared with the¬†cost during a¬†base period.¬†
Cournot equilibrium. Equilibrium in¬†the¬†Cournot model
Cournot model. Oligopoly model in¬†which firms produce a¬†homogeneous (same) good, each firm treats the¬†output of¬†its competitors as¬†fixed, and¬†all firms decide simultaneously (at¬†the¬†same time) how much to¬†produce.
Cross-price elasticity of¬†demand. Percentage change in¬†the¬†quantity demanded of¬†one good resulting from a¬†1-percent increase in¬†the¬†price of¬†another.
Cyclical industries. Industries in¬†which sales tend to¬†magnify cyclical changes in¬†GDP and¬†national income
Deadweight loss. Net loss of¬†total (consumer and¬†producer) surplus.
Decreasing returns to¬†scale. Situation in¬†which output less than doubles when all inputs are doubled. (Less productive if more products)
Decreasing-cost industry. industry, whose long-run supply curve is downward sloping.
Degree of¬†economies of¬†scope (SC). Percentage of¬†cost-saving resulting when two or¬†more products are produced jointly (together) rather than individually. (Mb means by¬†one or¬†two companies)
Demand curve. Relationship between the¬†quantity of¬†a¬†good that consumers are willing to¬†buy and¬†the¬†price of¬†the¬†good.
Derived demand. Demand for¬†an¬†input that depends on, and¬†is derived from, both the¬†firms‚Äô level of¬†output and¬†the¬†cost of¬†inputs.
Deviation. Difference between expected payoff and¬†actual payoff (–≤—č–Ņ–Ľ–į—ā–į).
Diminishing marginal utility. principle that as¬†more of¬†a¬†good is consumed, the¬†consumption of¬†additional amounts will yield smaller additions to¬†utility (–≤—č–≥–ĺ–ī–į, –Ņ—Ä–į–ļ—ā–ł—á–Ĺ–ĺ—Ā—ā—Ć, –Ņ–ĺ–Ľ—Ć–∑–į). The¬†more you consume, the¬†less you need to¬†get the¬†benefit.
Discount rate. The¬†rate used to¬†determine the¬†value today of¬†a¬†dollar received in¬†the¬†future.
Diseconomies of¬†scale. A¬†situation in¬†which a¬†doubling of¬†output requires more than a¬†doubling of¬†cost.
Diseconomies of¬†scope. A¬†situation in¬†which the¬†joint output of¬†a¬†single firm is less than could be achieved by¬†separate firms when each produces a¬†single product.¬†
Diversifiable risk. Risk that can be eliminated either by¬†investing in¬†many projects or¬†by¬†holding the¬†stocks of¬†many companies.
Diversification. Practice of¬†reducing risk by¬†allocating resources to¬†a¬†variety of¬†activities whose outcomes are not¬†closely related.
Dominant Firm. Firm with a¬†large share of¬†total sales that sets the¬†price to¬†maximize profits, taking into account the¬†supply response of¬†smaller firms.
Dominant strategy. Strategy that is optimal no¬†matter what an¬†opponent does.
Double marginalization. when each firm in¬†a¬†vertical chain marks up its price above its marginal cost, thereby increasing the¬†price of¬†the¬†final product.
Duality. Alternative way of¬†looking at¬†the¬†consumer‚Äôs utility maximization decision: Rather than choosing the¬†highest indifference curve, given a¬†budget constraint, the¬†consumer chooses the¬†lowest budget line that touches a¬†given indifference curve.
Duopoly. Market in¬†which two firms compete with each other (Airbus and¬†Boeing).
Dutch auction. Auction in¬†which a¬†seller begins by¬†offering a¬†relatively high price, then reduces it by¬†fixed amounts until the¬†item is sold.
Economic cost. cost to¬†a¬†firm utilizing economic resources in¬†production.
Economic efficiency. Maximisation of¬†aggregate consumer and¬†producer surplus.
Economic rent. Amount that firms are willing to¬†pay for¬†input less the¬†minimum amount necessary to¬†obtain it.
Economics of¬†scale. a¬†situation in¬†which output can be doubled for¬†less than a¬†doubling of¬†cost (So then more, then more effective production).
Economics of¬†scope. Situation in¬†which joint (—Ā–ĺ–≤–ĺ–ļ—É–Ņ–Ĺ—č–Ļ) output of¬†a¬†single firm is greater than output that could be achieved by¬†2 different firms when each produces a¬†single product.
Edgeworth box. a¬†diagram showing all possible allocation of¬†either 2 goods between 2 people or¬†of¬†2 inputs between 2 production processes.
Effective yield (rate of¬†return). percentage return that one receives by¬†investing in¬†a¬†bond.
Efficiency wage. Wage that a¬†firm will pay to¬†an¬†employee as¬†an¬†incentive not¬†to¬†shirk (—Ā—ā–ł–ľ—É–Ľ —á—ā–ĺ–Ī—č –Ĺ–Ķ —É–ļ–Ľ–ĺ–Ĺ—Ź—ā—Ć—Ā—Ź –ĺ—ā —Ä–į–Ī–ĺ—ā—č, —ā–Ķ–ľ —Ā–į–ľ—č–ľ —É–ľ–Ķ–Ĺ—Ć—ą–į—Ź –Ī–Ķ–∑—Ä–į–Ī–ĺ—ā–ł—Ü—É).
Efficiency wage theory. Explanation for¬†the¬†presence of¬†unemployment and¬†wage discrimination which recognizes that labor productivity may be affected by¬†the¬†wage rate.
Elasticity. Percentage change in¬†one variable resulting from a¬†1-percent increase in¬†another variable.
Emissions fee. Charge levied on¬†each unit of¬†a¬†firm‚Äôs emissions.
Emissions standard. Legal limit in¬†the¬†number of¬†pollutants that a¬†firm can emit.
? Endowment (–Ņ–ĺ–∂–Ķ—Ä—ā–≤–ĺ–≤–į–Ĺ–ł–Ķ) effect. Tendency of¬†individuals to¬†value an¬†item more when they own it than when they don‚Äôt.
Engel curve. Curve relating the¬†quantity of¬†a¬†good consumed to¬†income.¬†
English auction. Auction in¬†which a¬†seller actively solicits progressively higher bids from a¬†group of¬†potential buyers.
? Equal marginal principle. Principle that utility is maximised when the¬†consumer has equalised the¬†marginal utility per¬†dollar of¬†expenditure across all goods.
Equilibrium (market clearing) price. Price that equates the¬†quantity supplied to¬†the¬†quantity demanded.¬†
? Equilibrium in¬†dominant strategies. Outcome of¬†a¬†game in¬†which each firm is doing the¬†best it can regardless of¬†what its competitors are doing.
Excess demand. When the¬†quantity demanded of¬†a¬†good exceeds the¬†quantity supplied.
Excess supply. When the¬†quantity supplied of¬†a¬†good exceeds the¬†quantity demanded.
Exchange economy. Market in¬†which 2 or¬†more consumers trade 2 goods among themselves.
? Expansion path. Curve passing through points of¬†tangency between a¬†firm‚Äôs isocost lines and¬†its isoquants.
Expected return. Return that an¬†asset should earn on¬†average.¬†¬†
Expected utility. Sum of¬†the¬†utilities associated with all possible outcomes, weighted by¬†the¬†probability that each outcome will occur.
Expected value. Probability-weighted average of¬†the¬†payoffs associated with all possible outcomes.
? Extensive form or¬†a¬†game. Representation of¬†possible moves in¬†a¬†game in¬†the¬†form of¬†a¬†decision tree.
Extent of¬†a¬†market. Boundaries of¬†a¬†market, both geographical and¬†in¬†terms of¬†range of¬†products produced and¬†sold within it.
? Externality. Action by¬†either a¬†producer or¬†a¬†consumer which affects other producers or¬†consumers, but¬†is not¬†accounted for¬†in¬†the¬†market price.
Factors of¬†production. Inputs into the¬†production process (e.¬†g. Labor, capital, materials).
First-degree price discrimination. Practice of¬†charging each customer her reservation price.
First-price auction. Auction in¬†which the¬†sales price is equal to¬†the¬†highest bid.
Fixed cost (FC). Cost that does not¬†vary with the¬†level of¬†output and¬†that can be eliminated only by¬†shutting down.
Fixed input. Production factor that cannot be varied.
? Fixed-proportions production function. Production function with L-shaped isoquants, so that only one combination of¬†labor and¬†capital can be used to¬†produce each level of¬†output.
Fixed-weight index. Cost-of-living index in¬†which the¬†quantities of¬†goods and¬†services remain unchanged.
Framing. Tendency to¬†rely on¬†the¬†context in¬†which a¬†choice is described when making a¬†decision.
Free entry (or¬†exit). Condition under which there are no¬†special costs that make it difficult for¬†a¬†firm to¬†enter (or¬†exit) an¬†industry.
Free rider. Consumer or¬†producer who does not¬†pay for¬†a¬†nonexclusive good in¬†the¬†expectation that others will.
Game. Situation in¬†which players (participants) make strategic decisions that take into account each other‚Äôs actions and¬†responses.
General equilibrium analysis. Simultaneous (–ĺ–ī–Ĺ–ĺ–≤—Ä–Ķ–ľ–Ķ–Ĺ–Ĺ–ĺ–Ķ, —Ā–ł–Ĺ—Ö—Ä–ĺ–Ĺ–Ĺ–ĺ–Ķ) determination of¬†the¬†prices and¬†quantities in¬†all relevant markets, taking feedback effects into account.
? Giffen good. Good whose demand curve slopes upward because the¬†(negative) income effect is larger than the¬†substitution (–∑–į–ľ–Ķ—Č–Ķ–Ĺ–ł–Ķ) effect. (e.¬†g. with luxury good when price is low, then demand falls, or¬†cheap fast food or¬†cheap fruits**. if it‚Äôs to¬†cheap, then people will be afraid to¬†buy it).
Hicksian substitution effect. alternative to¬†the¬†Slutsky equation for¬†decomposing price changes without resource to¬†indifference curves.
Horizontal integration. Organisational form in¬†which several plants produce the¬†same or¬†related products for¬†a¬†firm.
Human capital. Knowledge, skills, and¬†experience that make an¬†individual more productive and¬†thereby able to¬†earn a¬†higher income over a¬†lifetime¬†
Ideal cost-of-living index. cost of¬†attaining a¬†given level of¬†utility at¬†current prices relative to¬†the¬†cost of¬†attaining the¬†same utility at¬†base-year prices.
Import quota. Limit on¬†the¬†quantity of¬†a¬†good that can be imported
Income effect. Change in¬†consumption of¬†a¬†good resulting from an¬†increase in¬†purchasing power, with relative prices held constant.
Income elasticity of¬†demand. Percentage change in¬†the¬†quantity demanded resulting from a¬†1-percent increase in¬†income
Income-consumption curve. Curve tracing the¬†utility-maximizing combinations of¬†2 goods as¬†a¬†consumer‚Äôs income changes.
Increasing returns to¬†scale. Situation in¬†which output more than doubles when all inputs are doubled.
Increasing-cost industry. Industry whose long-run supply curve is upward sloping.
Indifference curve. Curve representing all combinations of¬†market baskets that provide a¬†consumer with the¬†same level of¬†satisfaction. (2 indifference curves can‚Äôt intersect).
Indifference map. Graph containing a¬†set of¬†indifference curves showing the¬†market baskets among which a¬†consumer is indifferent.
Individual demand curve. Curve relating the¬†quantity of¬†a¬†good that a¬†single consumer will buy to¬†its price.
Inferior (–Ņ–ĺ–ī—á–ł–Ĺ—Ď–Ĺ–Ĺ—č–Ļ) good. A¬†good that has a¬†negative income effect.
Infinitely elastic demand. Principle that consumers will buy as¬†much of¬†a¬†good as¬†they can get at¬†a¬†single price, but¬†for¬†any higher price, the¬†quantity demanded drops to¬†zero, while for¬†any lower price, the¬†quantity demanded increases without limit.
Informational cascade. An¬†assessment (e.¬†g., of¬†investment opportunity) based in¬†part on¬†the¬†actions of¬†others, which in¬†turn were based on¬†the¬†actions of¬†others.
Interest rate. the¬†rate at¬†which one can borrow or¬†lend money.
? Intertemporal price discrimination. Practice of¬†separating consumers with different demand functions into different groups by¬†charging different prices at¬†different points in¬†time. (Hardcover and¬†paperback books difference at¬†a¬†price is high)
Isocost line. Graph, showing all possible combinations of¬†labor and¬†capital that can be purchased for¬†a¬†given total cost.
Isoelastic demand curve. Demand curve with constant price elasticity.
Isoquant. curve showing all possible combinations of¬†inputs that yield the¬†same output.¬†
Isoquant map. graph combining a¬†number of¬†isoquants used to¬†describe a¬†production function.
Kinked demand curve model. oligopoly model in¬†which each firm faces a¬†demand curve kinked at¬†the¬†currently prevailing price: at¬†higher prices, demand is very elastic, whereas at¬†lower prices, it is inelastic.
Labor productivity. Average product of¬†labor for¬†an¬†entire industry or¬†for¬†the¬†economy as¬†a¬†whole.
Lagrangian. function to¬†be maximized or¬†minimised, plus a¬†variable (the¬†Long-range multiplier) multiplied by¬†the¬†constraint.
Laspeyres price index. Amount of¬†money at¬†current-year prices that an¬†individual requires to¬†purchase a¬†bundle of¬†goods and¬†services chosen in¬†a¬†base year / cost of¬†purchasing the¬†same bundle at¬†base-year prices.
Law of¬†diminishing marginal returns. Principle that as¬†the¬†use of¬†an¬†input increases with other inputs fixed, the¬†resulting additions to¬†output will eventually decrease.
Law of¬†small numbers. Tendency to¬†overstate the¬†probability that a¬†certain event will occur when faced with relatively little information.¬†
Learning curve. Graph relating amount of¬†inputs needed by¬†a¬†firm to¬†produce each unit of¬†output to¬†its cumulative output.
Least-squares criterion. Criterion of¬†‚Äúbest fit‚ÄĚ used to¬†choose values for¬†regression parameters, usually by¬†minimising the¬†sum of¬†squared residuals between the¬†actual values of¬†the¬†dependent variable and¬†the¬†fitted values.
Lerner Index of¬†Monopoly Power. Measure of¬†monopoly power = excess of¬†price / marginal cost as¬†a¬†fraction of¬†price.
Linear demand curve. Demand curve that is a¬†straight line.
? Linear regression. Model specifying a¬†linear relationship between a¬†dependent variable and¬†several independent (or¬†explanatory) variables and¬†an¬†error term
Long run. Amount of¬†time needed to¬†make all production inputs variable.
Long-run average cost curve (LAC). Curve relating average cost of¬†production to¬†output when all inputs, including capital, are variable.
Long-run competitive equilibrium. All firms in¬†an¬†industry are maximizing profit, no¬†firm has an¬†incentive (—Ā—ā–ł–ľ—É–Ľ) to¬†enter or¬†exit, and¬†price is such that quantity supplied equals quantity demanded.
Long-run marginal cost curve (LMC). Curve showing the¬†change in¬†long-run total cost as¬†output is increased incrementally by¬†1 unit.
Loss aversion. Tendency for¬†individuals to¬†prefer avoiding losses over acquiring gains.
Macroeconomics. branch of¬†economics that deals with aggregate economic variables, such as¬†the¬†level and¬†growth rate of¬†national output, interest rates, unemployment, and¬†inflation.
Marginal benefit. Benefit from the¬†consumption of¬†one additional unit of¬†a¬†good.
Marginal cost. Cost of¬†one additional unit of¬†a¬†good.
Marginal expenditure. Additional cost of¬†buying one more unit of¬†a¬†good
Marginal expenditure curve. curve describing the¬†additional cost of¬†purchasing one additional unit of¬†a¬†good.
Marginal external benefit. Increased benefit that accrues (–Ĺ–į—Ä–į—Č–ł–≤–į–Ķ—ā –Ņ—Ä–ĺ—Ü–Ķ–Ĺ—ā) to¬†other parties as¬†a¬†firm increases output by¬†one unit.
Marginal external cost. Increase in¬†cost imposed external as¬†one or¬†more firms increase output by¬†one unit.
Marginal product. Additional output produced as¬†an¬†input is increased by¬†one unit.
Marginal rate of¬†substitution (MRS). Maximum amount of¬†a¬†good that a¬†consumer is willing to¬†give up in¬†order to¬†obtain one additional unit of¬†another good.
Marginal rate of¬†technical substitution (MRTS). Amount by¬†which the¬†quantity of¬†one input can be reduced when one extra unit of¬†another input is used, so that output remains constant.¬†
? Marginal rate of¬†transformation. Amount of¬†one good that must be given up to¬†produce one additional unit of¬†a¬†second good.
Marginal revenue. Change in¬†revenue resulting from an¬†increase in¬†output by¬†one unit.
Marginal revenue product. Additional revenue resulting from the¬†sale of¬†output created by¬†the¬†use of¬†one additional unit of¬†an¬†input.
Marginal social benefit. Sum of¬†the¬†marginal private benefit + marginal external benefit.
Marginal social cost. Sum of¬†the¬†marginal cost of¬†production and¬†the¬†marginal external cost.
Marginal utility (MU). Additional satisfaction obtained from consuming one additional unit of¬†a¬†good.
Marginal value. Additional benefit derived from purchasing one more unit of¬†a¬†good.
Market. Collection of¬†buyers and¬†sellers that, through their actual or¬†potential interactions, determine the¬†price of¬†product or¬†set of¬†products.
Market basket (or¬†bundle). List with specific quantities of¬†one or¬†more goods.¬†
Market definition. Determination of¬†the¬†buyers, sellers, and¬†range of¬†products that should be included in¬†a¬†particular market.
Market demand curve. curve relating the¬†quantity of¬†a¬†good that all consumers in¬†a¬†market will buy to¬†its price.¬†
? Market failure. Situation in¬†which an¬†unregulated competitive market is inefficient because prices fail to¬†provide proper signals to¬†consumers and¬†producers.
Market mechanism. Tendency In¬†a¬†free market for¬†price to¬†change until the¬†market clears.
Market power. Ability of¬†a¬†seller or¬†buyer to¬†affect the¬†price of¬†a¬†good.
Market price. Price prevailing (–Ņ—Ä–Ķ–ĺ–Ī–Ľ–į–ī–į—é—Č–į—Ź) in¬†a¬†competitive market.
Market signalling. Process by¬†which sellers send signals to¬†buyers conveying information about product quality.
Maximin strategy. strategy that maximises the¬†minimum gain that can be earned.
Method of¬†Lagrange multipliers. Technique to¬†max or¬†min a¬†function subject to¬†one or¬†more constraints.
Microeconomics. a¬†branch of¬†economics that deals with the¬†behavior of¬†individual economic units¬†‚Äď consumers, firms, workers, and¬†investors¬†‚Äď as¬†well as¬†the¬†markets that these units comprise.
Mixed bundling. Selling two or¬†more goods both as¬†a¬†package and¬†individually (MB like gel and¬†shampoo for¬†gifts and¬†normally separately)
Mixed strategy. Strategy in¬†which a¬†player makes a¬†random choice among two or¬†more possible actions based on¬†a¬†set of¬†chosen probabilities.
Monopolistic competition. Market in¬†which firms can enter freely, each producing its own brand or¬†version of¬†a¬†differentiated product.¬†
Monopoly. Market with only one seller.
Monopsony. Market with only one buyer.
Monopsony power. buyer‚Äôs ability to¬†affect the¬†price of¬†a¬†good.
Moral hazard. when a¬†party whose actions are unobserved can affect the¬†probability or¬†magnitude of¬†a¬†payment associated with an¬†event.
Multiple regression analysis. Statistical procedure for¬†quantifying economic relationships and¬†testing hypotheses about them.
Mutual fund. Organisation that pools funds of¬†individual investors to¬†buy a¬†large number of¬†different stocks or¬†other financial assets.
Nash equilibrium. set of¬†strategies or¬†actions in¬†which each firm does the¬†best it can given its competitors‚Äô actions.¬†
Natural monopoly. Firm that can produce the¬†entire output of¬†the¬†market at¬†a¬†cost lower than what it would be if there were several firms.
Negatively correlated variables. Variables having a¬†tendency to¬†move in¬†opposite directions.
Net present value (NPV) criterion. Rule holding that one should invest in¬†the¬†present value of¬†the¬†expected future cash flow from on¬†investment is larger than the¬†cost of¬†the¬†investment.
Network externality. Situation in¬†which each Individual‚Äôs demand depends on¬†the¬†purchases of¬†other individuals. (If everyone buys Tesla, I buy too)
Nominal price. Absolute price of¬†a¬†good, unadjusted for¬†inflation.
Noncooperative game. Game in¬†which negation (–ĺ–Ņ—Ä–ĺ–≤–Ķ—Ä–≥–į—é—Č–ł–Ķ) and¬†enforcement of¬†binding (–ĺ–Ī—Ź–∑—č–≤–į—é—Č–ł–Ķ) contracts are not¬†possible.
Nondiversifiable risk. Risk that cannot be eliminated by¬†investing in¬†many projects or¬†by¬†holding the¬†stocks of¬†many companies.
? Nonexclusive good. Good that is difficult or¬†impossible to¬†charge for¬†its use, and¬†this good can‚Äôt be excluded from consumption.
Nontrivial good. Good for¬†which the¬†marginal cost of¬†its provision to¬†an¬†additional consumer is zero (e.¬†g., a¬†game license for¬†the¬†second friend)
Normative analysis. Analysis examining questions of¬†what ought to¬†be.
Oligopoly. Market in¬†which only a¬†few firms compete with one another, and¬†entry by¬†new firms is impeded (barrier)
Oligopsony. market with only a¬†few buyers.
Opportunity cost. Cost associated with opportunities forgone the¬†firm‚Äôs resources are not¬†put to¬†their best alternative use.
Opportunity cost of¬†capital. Rate of¬†return that one could earn by¬†investing in¬†an¬†alternate project with similar risk.
**Optimal strategy. -Strategy that maximizes a¬†player‚Äôs expected payoff.
Ordinal utility function. Utility function that generates a¬†ranking of¬†market baskets in¬†order of¬†most to¬†least preferred.
Overconfidence. Overestimating an¬†Individual‚Äôs prospects or¬†abilities.
Over-optimism. An¬†unrealistic belief that things will work out well.
Over-precision. An¬†unrealistic belief that one can accurately predict outcomes.
Paasche index. Amount of¬†money at¬†current-year prices that an¬†individual requires to¬†purchase a¬†current bundle of¬†goods and¬†services / the¬†cost of¬†purchasing the¬†same bundle in¬†a¬†base year.
Pareto efficient allocation. Allocation of¬†goods in¬†which no¬†one can be made better off unless someone else is made worse off.
Parallel conduct. Form of¬†implicit (—Ā–ļ—Ä—č—ā—č–Ļ) collusion (—Ā–≥–ĺ–≤–ĺ—Ä) in¬†which one firm consistently follows actions of¬†another.
Partial equilibrium analysis. Determination of¬†equilibrium prices and¬†quantities in¬†a¬†market independent of¬†effects from other markets.
Payoff. (–≤—č–Ņ–Ľ–į—ā–į) value associated with a¬†possible outcome.
Payoff matrix. Table showing profit (or¬†payoff) to¬†each firm given its decision and¬†the¬†decision of¬†its competitor.
Peak-load pricing. Practice of¬†charging higher prices during peak periods when capacity constraints (–ĺ–≥—Ä–į–Ĺ–ł—á–Ķ–Ĺ–ł—Ź) cause marginal costs to¬†be high (e.¬†g., in¬†winter people need ski, but¬†the¬†production is restricted).
Perfect complements. Two goods for¬†which the¬†Marginal Rate of¬†Substitution (MRS is how much of¬†one good you‚Äôre ready to¬†give up for¬†another) is zero or¬†infinite; The¬†indifference curves are shaped as¬†right angles.
Perfect substitutes. Two goods for¬†which the¬†Marginal Rate of¬†Substitution of¬†one for¬†the¬†other is constant.¬†¬†
Perfectly competitive market. Market with many many buyers and¬†sellers, so that no¬†single buyer or¬†seller has a¬†significant impact on¬†price.
Perpetuity. Bond paying out a¬†fixed amount of¬†money each year forever.
Point of¬†elasticity of¬†demand. Price elasticity at¬†a¬†particular point on¬†the¬†demand curve.
Positive analysis. Analysis describing relationships of¬†cause and¬†effect
Positively correlated variables. Variables having a¬†tendency to¬†move in¬†the¬†same direction.
Predatory pricing. Practice of¬†pricing to¬†drive current competitors out of¬†business and¬†to¬†discourage new entrants in¬†a¬†market so that a¬†firm can enjoy higher future profits.
Present discounted value (PDV). The¬†current value of¬†an¬†expected future cash flow.
Price discrimination. Practice of¬†charging different prices to¬†different consumers for¬†similar goods.
Price elasticity of¬†demand. Percentage change in¬†quantity demanded of¬†a¬†good resulting from a¬†1-percent increase in¬†price.
Price elasticity of¬†supply. Percentage change in¬†quantity supplied of¬†a¬†good resulting from a¬†1-percent increase in¬†price.
Price leadership. Pattern of¬†pricing in¬†which one firm regularly announces price changes that other firms should match.
Price of¬†risk. Extra risk that an¬†investor must incur to¬†enjoy a¬†higher expected return.
? Price rigidity. characteristic of¬†oligopolistic markets by¬†which firms are reluctant (unwilling) to¬†change prices even if costs of¬†demands change.
Price signaling. form of¬†implicit collusion (—Ā–ļ—Ä—č—ā—č–Ļ —Ā–≥–ĺ–≤–ĺ—Ä) in¬†which a¬†firm announces a¬†price increase in¬†the¬†hope that other firms will follow suit.
Price support. Price set by¬†government above free-market level and¬†maintained by¬†governmental purchases of¬†excess supply.
Price taker. Firm that has no¬†influence over market price and¬†thus takes the¬†price as¬†given.
Price-consumption curve. Curve tracing the¬†utility-maximizing combinations of¬†two goods as¬†the¬†price of¬†one changes.
Principal. (Director) Individual who employs one or¬†more agents to¬†achieve an¬†objective.
Principal-agent problem. Problem arising when agents (e.¬†g., firm‚Äôs managers) pursue their own goals rather than the¬†goals of¬†principals (e.¬†g., the¬†firm‚Äôs owners).
Prisoners‚Äô dilemma. Game theory example in¬†which two prisoners must separately decide whether to¬†sell the¬†other prisoner out or¬†not**. if he does, he will not¬†get a¬†sentence, when another gets ten years; if they both don‚Äôt confess, then they get one year, and¬†if both confess, then they will get 15 years (Time can differ).
Private-value auction. Auction in¬†which each bidder knows his or¬†her individual valuation of¬†the¬†object up for¬†bid, with valuations differing from bidder to¬†bidder.
Profitability. Likelihood that a¬†given outcome will occur.¬†
Producer Price Index. Measure of¬†the¬†aggregate price level for¬†intermediate products and¬†wholesale goods.
Producer surplus. Sum over all units produced by¬†a¬†firm of¬†differences between the¬†market price of¬†a¬†good and¬†the¬†marginal cost of¬†production.¬†
? Product transformation curve. Curve showing the¬†various combination of¬†two different outputs (products) that can be produced with a¬†given set of¬†inputs.
Production function. Function showing the¬†highest output that a¬†firm can produce for¬†every specified combination of¬†inputs.
Production possibilities frontier. Curve showing the¬†combinations of¬†two goods that can be produced with fixed quantities of¬†inputs.
Profit. Difference between revenue and¬†total cost.
Property rights. Legal rules stating what people or¬†firms may do with their property.
Public good. Nonexclusive and¬†non-rival (–Ĺ–Ķ–ļ–ĺ–Ĺ–ļ—É—Ä–Ķ–Ĺ—ā–ĺ—Ā–Ņ–ĺ—Ā–ĺ–Ī–Ĺ—č–Ļ) good: the¬†marginal cost of¬†provision to¬†an¬†additional consumer is zero, and¬†people cannot be excluded from consuming it.
Pure bundling. Selling products only as¬†a¬†package.
Pure strategy. Strategy in¬†which a¬†player makes a¬†specific choice or¬†takes a¬†specific action.
Quantity forcing. Use of¬†a¬†sales quota or¬†other incentives to¬†make downstream firms sell as¬†much as¬†possible.
Rate-of-return regulation. Maximum price allowed by¬†a¬†regulatory agency is based on¬†the¬†(expected) rate of¬†return that a¬†firm will earn.
Reaction curve. Relationship between a¬†firm‚Äôs profit-maximizing output and¬†the¬†amount that the¬†firm thinks its competitor will produce.
Real price. Price of¬†a¬†good relative to¬†an¬†aggregate measure of¬†prices; price adjusted for¬†inflation.
Real return. Simple (or¬†nominal) return on¬†an¬†asset**. the¬†rate of¬†inflation.
Reference point. The¬†point from which an¬†individual makes a¬†consumption decision.
Rent-seeking. Spending money in¬†socially unproductive efforts to¬†acquire, maintain, or¬†exercise monopoly.
Rental rate. Cost per¬†year of¬†renting one unit of¬†capital.
Repeated game. Game in¬†which actions are taken, and¬†payoffs received over and¬†over again.
Reservation price. Maximum price that a¬†customer is willing to¬†pay for¬†a¬†good.
Return. Total monetary flow of¬†an¬†asset as¬†a¬†fraction of¬†its price.
Returns to¬†scale. Rate at¬†which output increases as¬†inputs are increased proportionately.¬†
Rist averse (opposition). Condition of¬†preferring a¬†certain income to¬†a¬†risky income with the¬†same expected value.
Risk loving. Condition of¬†preferring a¬†risky income to¬†a¬†certain income with the¬†same expected value.
Risk neutral. Condition of¬†being indifferent between a¬†certain income and¬†an¬†uncertain income with the¬†same expected value.¬†
Risk premium. Maximum amount of¬†money that a¬†risk-averse individual will pay to¬†avoid taking a¬†risk.
Riskless (risk-free) asset. Asset that provides a¬†flow of¬†money or¬†services that is known with certainty.
Risky asset. Asset that provides an¬†uncertain flow of¬†money or¬†services to¬†its owner.
? R-squared (R^2). the¬†percentage of¬†the¬†variation in¬†the¬†independent variable that is accounted for¬†by¬†all the¬†explanatory variables.
Salience. (–∑–Ĺ–į—á–ł–ľ–ĺ—Ā—ā—Ć) The¬†perceived importance of¬†a¬†good or¬†service.
Sample. Set of¬†observations for¬†study, drawn from a¬†larger universe.
Sealed-bid auction. Auction in¬†which all bids are made simultaneously in¬†sealed (–Ņ–Ķ—á–į—ā–Ĺ—č–Ļ) envelopes (–ļ–ĺ–Ĺ–≤–Ķ—Ä—ā), the¬†winning bidder being the¬†Individual who has submitted the¬†highest bid.
Second-degree price discrimination. Practice of¬†charging different prices per¬†unit for¬†different quantities of¬†the¬†same good or¬†service.
Second-price auction. Auction in¬†which the¬†sales price is equal to¬†the¬†second-highest bid. (Hmm, what if I say an¬†infinity on¬†the¬†bet of¬†1$?)
Sequential game. Game in¬†which players move in¬†turn, responding to¬†each other‚Äôs actions and¬†reactions.
? Shirking (avoiding) model. Principle that workers still have an¬†incentive to¬†shirk (=avoid) if a¬†firm pays them a¬†market-clearing wage because fired workers can be hired somewhere else for¬†the¬†same wage.
Short-run. Period of¬†time in¬†which quantities of¬†one or¬†more production factors cannot be changed.
Short-run average cost curve (SAC). Curve relating average cost of¬†production to¬†output when level of¬†capital is fixed.
Shortage. Situation in¬†which the¬†quantity demanded exceeds the¬†quantity supplied.
? Slutsky equation. Formula for¬†decomposing the¬†effects of¬†a¬†price change into effects of¬†substitution (–∑–į–ľ–Ķ–Ĺ—č) and¬†income.
? Snob effect. Negative network externality in¬†which a¬†consumer wishes to¬†own an¬†exclusive or¬†unique good.
Social rate of¬†discount. Opportunity cost to¬†society as¬†a¬†whole of¬†receiving an¬†economic benefit In¬†the¬†future rather than in¬†the¬†present.
Social welfare function. Measure describing the¬†well-being of¬†society as¬†a¬†whole in¬†terms of¬†the¬†utilities of¬†individual members.
Specific tax. Tax of¬†a¬†certain amount of¬†money per¬†unit sold.
Speculative demand. Demand-driven not¬†by¬†the¬†direct benefits one obtains from owning or¬†consuming a¬†good but¬†instead by¬†an¬†expectation that the¬†price of¬†the¬†goodwill increase.¬†
? Stackelberg model. Oligopoly model in¬†which one firm sets its output before other firms do.
Standard deviation. Square root of¬†weighted average of¬†the¬†squares of¬†the¬†deviations (–ĺ—ā–ļ–Ľ–ĺ–Ĺ–Ķ–Ĺ–ł–Ļ) of¬†the¬†payoffs associated with each outcome from their expected values.
Standard error of¬†the¬†regression. estimate of¬†the¬†standard deviation of¬†the¬†regression error.
Stock of¬†capital. Total amount of¬†capital available for¬†use in¬†production.
? Stock externality. Accumulated result of¬†action by¬†a¬†producer of¬†the¬†consumer which, though not¬†accounted for¬†in¬†the¬†market‚Äôs price, affects other producers or¬†consumers.
Strategy. Rule or¬†plan of¬†action for¬†playing a¬†game
Subsidy. (negative tax) Payment reducing the¬†buyer‚Äôs price below the¬†seller‚Äôs price.¬†
Substitutes. two goods for¬†which an¬†increase in¬†the¬†price of¬†one leads to¬†an¬†increase in¬†the¬†quantity of¬†the¬†other.
Substitution effect. Change in¬†consumption of¬†a¬†good associated with a¬†change in¬†its price, with the¬†level of¬†utility held constant.
Sunk cost. Expenditure that has been made and¬†cannot be recovered.
Supply curve. Relationship between the¬†quantity of¬†a¬†good that producers are willing to¬†sell and¬†the¬†price of¬†a¬†good.
Surplus. Situation in¬†which the¬†quantity supplied exceeds the¬†quantity demanded.
Tariff. Tax on¬†an¬†imported good.
?Technical efficiency. Condition under which (different?) firms combine inputs to¬†produce a¬†given output as¬†inexpensively as¬†possible.
Technological change. Development of¬†new technologies allowing factors of¬†production to¬†be used more effectively.
Theory of¬†consumer behavior. Description of¬†how consumers allocate incomes among different goods and¬†services to¬†maximize their well-being.
Theory of¬†the¬†firm. Explanation of¬†how a¬†firm makes cost-minimizing production decisions and¬†how a¬†firm makes cost-minimizing production decisions, and¬†how its cost varies with its output.
Third-degree price discrimination. Practice of¬†dividing consumers into two or¬†more groups with separate demand curves and¬†charging different prices to¬†each group.
Tit-for-tat strategy. Repeated-game strategy in¬†which a¬†player responds in¬†kind to¬†an¬†opponent‚Äôs previous play, cooperating with cooperative opponents and¬†retaliating (make an¬†attack in¬†return) against uncooperative ones.¬†
Total cost (TC or¬†C). Total economic cost of¬†production, consisting of¬†fixed and¬†variable costs (TC = FC + VC).
Transfer prices. Internal prices at¬†which parts and¬†components from upstream divisions are ‚Äúsold‚ÄĚ to¬†downstream divisions within a¬†firm.
Tradeable emissions permit. System of¬†marketable permits, allocated among firms, specifying the¬†maximum level of¬†emissions that can be generated.
Two-part tariff. Form of¬†pricing in¬†which consumers are charged both an¬†entry and¬†a¬†usage fee.
Tying. Practice of¬†requiring a¬†customer to¬†purchase one good in¬†order to¬†purchase another.
User cost of¬†capital. The¬†annual cost of¬†owning and¬†using a¬†capital asset = economic depreciation + forgone interest.
User cost of¬†production. The¬†opportunity cost of¬†producing and¬†selling a¬†unit today and¬†so making it unavailable for¬†production and¬†sale in¬†the¬†future.
? Utility. (–ü–ĺ–Ľ–Ķ–∑–Ĺ–ĺ—Ā—ā—Ć/–Ņ—Ä–į–ļ—ā–ł—á–Ĺ–ĺ—Ā—ā—Ć) Numerical score representing the¬†satisfaction that a¬†consumer gets from a¬†given market basket.
Utility function. Formula that assigns a¬†level of¬†utility to¬†the¬†individual market basket.
Utility possibilities frontier. Curve showing all efficient allocations of¬†resources measured in¬†terms of¬†the¬†utility levels of¬†two individuals.
? Value of¬†complete information. Difference between the¬†expected value of¬†a¬†choice when there is complete information and¬†the¬†expected value when information is incomplete.
Variability. Extent to¬†which possible outcomes of¬†an¬†uncertain event differ.
Variable cost (VC). Cost that varies as¬†output varies.¬†
Variable profit. Sum of¬†profits on¬†each incremental unit produced by¬†a¬†firm that means profit ignoring fixed costs.
Vertical Integration. Organisational form in¬†which a¬†firm contains several divisions, with some producing parts and¬†components that others use to¬†produce finished products.
Welfare economics. Normative (through norms and¬†standards) evaluation of¬†markets and¬†economic policy.
Welfare effects. Gains and¬†losses to¬†consumers and¬†producers.
Winner‚Äôs curse. Situation in¬†which the¬†winner of¬†a¬†common-value auction is worse off as¬†a¬†consequence of¬†overestimating the¬†value of¬†the¬†item and¬†thereby overbidding (—Ā–ł—ā—É–į—Ü–ł—Ź, –≤ –ļ–ĺ—ā–ĺ—Ä–ĺ–Ļ –Ņ–ĺ–Ī–Ķ–ī–ł—ā–Ķ–Ľ—Ć –į—É–ļ—Ü–ł–ĺ–Ĺ–į —Ā –ĺ–Ī—Č–Ķ–Ļ —Ā—ā–ĺ–ł–ľ–ĺ—Ā—ā—Ć—é –Ĺ–į—Ö–ĺ–ī–ł—ā—Ā—Ź –≤ —Ö—É–ī—ą–Ķ–ľ –Ņ–ĺ–Ľ–ĺ–∂–Ķ–Ĺ–ł–ł –≤ —Ä–Ķ–∑—É–Ľ—Ć—ā–į—ā–Ķ –∑–į–≤—č—ą–Ķ–Ĺ–ł—Ź —Ā—ā–ĺ–ł–ľ–ĺ—Ā—ā–ł –Ņ—Ä–Ķ–ī–ľ–Ķ—ā–į –ł, —Ā–Ľ–Ķ–ī–ĺ–≤–į—ā–Ķ–Ľ—Ć–Ĺ–ĺ, –Ņ–Ķ—Ä–Ķ–ļ—É–Ņ–ļ–ł).
Zero economic profit. A¬†firm is earning a¬†normal return on¬†its investment, which means that it is doing as¬†well as¬†it could by¬†investing its money elsewhere.
–ú–Ķ–ī–ł–į–Ĺ—č —Ā–ĺ–∑–ī–į—é—ā —É–∑–ļ—É—é —ā–ĺ—á–ļ—É –ī–Ľ—Ź –ī–≤–ł–∂–Ķ–Ĺ–ł—Ź –≤ —Ü–Ķ–Ĺ—ā—Ä–Ķ –Ņ—Ä–ĺ–Ķ–∑–∂–Ķ–Ļ —á–į—Ā—ā–ł –ł –ľ–ĺ–≥—É—ā —É–ľ–Ķ–Ĺ—Ć—ą–ł—ā—Ć —Ä–į—Ā—Ā—ā–ĺ—Ź–Ĺ–ł–Ķ –ī–ĺ –Ņ–Ķ—ą–Ķ—Ö–ĺ–ī–Ĺ—č—Ö –Ņ–Ķ—Ä–Ķ—Ö–ĺ–ī–ĺ–≤
–ź–Ĺ—ā–ł–ļ–į—Ä–ľ–į–Ĺ—č —Ā—É–∂–į—é—ā —É–Ľ–ł—Ü—É, —á—ā–ĺ–Ī—č –į–≤—ā–ĺ–ľ–ĺ–Ī–ł–Ľ–ł—Ā—ā—č —Ä–į–∑–≥–ĺ–Ĺ—Ź–Ľ–ł—Ā—Ć. –Ę–į–ļ –∂–Ķ –į–Ĺ—ā–ł–ļ–į—Ä–ľ–į–Ĺ—č —Ä–į—Ā—ą–ł—Ä—Ź—é—ā –Ņ—Ä–ĺ—Ā—ā—Ä–į–Ĺ—Ā—ā–≤–ĺ —ā—Ä–ĺ—ā—É–į—Ä–ĺ–≤ –ī–Ľ—Ź –Ņ–Ķ—ą–Ķ—Ö–ĺ–ī–ĺ–≤.
–®–ł–ļ–į–Ĺ—č –∑–į–ľ–Ķ–ī–Ľ—Ź—é—ā –≤–ĺ–ī–ł—ā–Ķ–Ľ–Ķ–Ļ, —á–Ķ—Ä–Ķ–ī—É—Ź –Ņ–į—Ä–ļ–ĺ–≤–ļ—É –ł–Ľ–ł —Ä–į—Ā—ą–ł—Ä–Ķ–Ĺ–ł–Ķ –Ī–ĺ—Ä–ī—é—Ä–į –≤–ī–ĺ–Ľ—Ć –ļ–ĺ—Ä–ł–ī–ĺ—Ä–į.
–°–ī–≤–ł–≥ –Ņ–ĺ–Ľ–ĺ—Ā—č –ī–≤–ł–∂–Ķ–Ĺ–ł—Ź
–°–ī–≤–ł–≥ –Ņ–ĺ–Ľ–ĺ—Ā—č –ī–≤–ł–∂–Ķ–Ĺ–ł—Ź –Ņ–ĺ –≥–ĺ—Ä–ł–∑–ĺ–Ĺ—ā–į–Ľ–ł –ĺ—ā–ļ–Ľ–ĺ–Ĺ—Ź–Ķ—ā —ā—Ä–į–Ĺ—Ā–Ņ–ĺ—Ä—ā–Ĺ–ĺ–Ķ —Ā—Ä–Ķ–ī—Ā—ā–≤–ĺ –ł –ľ–ĺ–∂–Ķ—ā –Ī—č—ā—Ć —Ā–Ņ—Ä–ĺ–Ķ–ļ—ā–ł—Ä–ĺ–≤–į–Ĺ —Ā —á–Ķ—Ä–Ķ–ī–ĺ–≤–į–Ĺ–ł–Ķ–ľ, —Ä–į—Ā—ą–ł—Ä–Ķ–Ĺ–ł–Ķ–ľ –Ī–ĺ—Ä–ī—é—Ä–į –ł–Ľ–ł –Ņ–į—Ä–ļ–ĺ–≤–ļ–ĺ–Ļ.
–°–ļ–ĺ—Ä–ĺ—Ā—ā–Ĺ—č–Ķ –≥–ĺ—Ä–Ī—č –≤–Ķ—Ä—ā–ł–ļ–į–Ľ—Ć–Ĺ–ĺ –ĺ—ā–ļ–Ľ–ĺ–Ĺ—Ź—é—ā —ā—Ä–į–Ĺ—Ā–Ņ–ĺ—Ä—ā–Ĺ—č–Ķ —Ā—Ä–Ķ–ī—Ā—ā–≤–į –ł –ľ–ĺ–≥—É—ā –Ī—č—ā—Ć –ĺ–Ī—ä–Ķ–ī–ł–Ĺ–Ķ–Ĺ—č —Ā –Ņ–Ķ—ą–Ķ—Ö–ĺ–ī–Ĺ—č–ľ –Ņ–Ķ—Ä–Ķ—Ö–ĺ–ī–ĺ–ľ —Ā—Ä–Ķ–ī–Ĺ–Ķ–≥–ĺ –Ī–Ľ–ĺ–ļ–į.
–£–Ľ–ł—Ü–į —Ā –ī–≤—É—Ā—ā–ĺ—Ä–ĺ–Ĺ–Ĺ–ł–ľ –ī–≤–ł–∂–Ķ–Ĺ–ł–Ķ–ľ
–£–Ľ–ł—Ü—č —Ā –ī–≤—É—Ā—ā–ĺ—Ä–ĺ–Ĺ–Ĺ–ł–ľ –ī–≤–ł–∂–Ķ–Ĺ–ł–Ķ–ľ, –ĺ—Ā–ĺ–Ī–Ķ–Ĺ–Ĺ–ĺ —Ā –Ī–ĺ–Ľ–Ķ–Ķ —É–∑–ļ–ł–ľ –Ņ—Ä–ĺ—Ą–ł–Ľ–Ķ–ľ, –Ņ–ĺ–Ī—É–∂–ī–į—é—ā –į–≤—ā–ĺ–ľ–ĺ–Ī–ł–Ľ–ł—Ā—ā–ĺ–≤ –Ī—č—ā—Ć –Ī–ĺ–Ľ–Ķ–Ķ –ĺ—Ā—ā–ĺ—Ä–ĺ–∂–Ĺ—č–ľ–ł –ł –ĺ–Ņ–į—Ā–į—ā—Ć—Ā—Ź –≤—Ā—ā—Ä–Ķ—á–Ĺ–ĺ–≥–ĺ –ī–≤–ł–∂–Ķ–Ĺ–ł—Ź.
–ö—Ä—É–≥–ĺ–≤—č–Ķ –Ņ–Ķ—Ä–Ķ–ļ—Ä–Ķ—Ā—ā–ļ–ł —Ā–Ĺ–ł–∂–į—é—ā
—Ā–ļ–ĺ—Ä–ĺ—Ā—ā—Ć –ī–≤–ł–∂–Ķ–Ĺ–ł—Ź –Ĺ–į –Ņ–Ķ—Ä–Ķ–ļ—Ä–Ķ—Ā—ā–ļ–į—Ö, —ā—Ä–Ķ–Ī—É—Ź –ĺ—ā –į–≤—ā–ĺ–ľ–ĺ–Ī–ł–Ľ–ł—Ā—ā–ĺ–≤ —Ā–ĺ–Ī–Ľ—é–ī–į—ā—Ć –ĺ—Ā—ā–ĺ—Ä–ĺ–∂–Ĺ–ĺ—Ā—ā—Ć –≤ –ľ–Ķ—Ā—ā–į—Ö –ļ–ĺ–Ĺ—Ą–Ľ–ł–ļ—ā–ĺ–≤.
–ě—ā–ļ–Ľ–ĺ–Ĺ–ł—ā–Ķ–Ľ—Ć –ī–≤–ł–∂–Ķ–Ĺ–ł—Ź —Ä–į–∑–Ī–ł–≤–į–Ķ—ā —É–Ľ–ł—á–Ĺ—É—é —Ā–Ķ—ā–ļ—É, —Ā–ĺ—Ö—Ä–į–Ĺ—Ź—Ź –Ņ—Ä–ł —ć—ā–ĺ–ľ –Ņ—Ä–ĺ—Ö–ĺ–ī–ł–ľ–ĺ—Ā—ā—Ć –ī–Ľ—Ź –Ņ–Ķ—ą–Ķ—Ö–ĺ–ī–ĺ–≤ –ł –≤–Ķ–Ľ–ĺ—Ā–ł–Ņ–Ķ–ī–ł—Ā—ā–ĺ–≤.
–°–ł–≥–Ĺ–į–Ľ—č, –Ņ—Ä–ł—É—Ä–ĺ—á–Ķ–Ĺ–Ĺ—č–Ķ –ļ —Ü–Ķ–Ľ–Ķ–≤–ĺ–Ļ —Ā–ļ–ĺ—Ä–ĺ—Ā—ā–ł —É–Ľ–ł—Ü—č, –ľ–ĺ–≥—É—ā —Ā–ĺ–∑–ī–į–≤–į—ā—Ć –Ī–ĺ–Ľ–Ķ–Ķ –Ĺ–ł–∑–ļ–ł–Ķ —Ā–ļ–ĺ—Ä–ĺ—Ā—ā–ł –≤–ī–ĺ–Ľ—Ć –ļ–ĺ—Ä–ł–ī–ĺ—Ä–į.
–ü–Ľ–ĺ—ā–Ĺ–į—Ź –∑–į—Ā—ā—Ä–ĺ–Ķ–Ĺ–Ĺ–į—Ź —Ā—Ä–Ķ–ī–į
–Ī–Ķ–∑ —Ā—É—Č–Ķ—Ā—ā–≤–Ķ–Ĺ–Ĺ—č—Ö —Ā–Ī–ĺ–Ķ–≤ –ĺ–≥—Ä–į–Ĺ–ł—á–ł–≤–į–Ķ—ā –Ľ–ł–Ĺ–ł–ł –ĺ–Ī–∑–ĺ—Ä–į, –ī–Ķ–Ľ–į—Ź –≤–ĺ–ī–ł—ā–Ķ–Ľ–Ķ–Ļ –Ī–ĺ–Ľ–Ķ–Ķ –Ī–ī–ł—ā–Ķ–Ľ—Ć–Ĺ—č–ľ–ł –ł –ĺ—Ā–≤–Ķ–ī–ĺ–ľ–Ľ–Ķ–Ĺ–Ĺ—č–ľ–ł –ĺ —Ā–≤–ĺ–Ķ–ľ –ĺ–ļ—Ä—É–∂–Ķ–Ĺ–ł–ł
–Ē–Ķ—Ä–Ķ–≤—Ć—Ź —Ā—É–∂–į—é—ā –Ņ–ĺ–Ľ–Ķ –∑—Ä–Ķ–Ĺ–ł—Ź –≤–ĺ–ī–ł—ā–Ķ–Ľ—Ź –ł —Ā–ĺ–∑–ī–į—é—ā —Ä–ł—ā–ľ –≤–ī–ĺ–Ľ—Ć —É–Ľ–ł—Ü—č.
–ü–į—Ä–ļ–ĺ–≤–ļ–į –Ě–į –£–Ľ–ł—Ü–Ķ
–ü–į—Ä–ļ–ĺ–≤–ļ–į –Ĺ–į —É–Ľ–ł—Ü–Ķ —Ā—É–∂–į–Ķ—ā —É–Ľ–ł—Ü—É –ł –∑–į–ľ–Ķ–ī–Ľ—Ź–Ķ—ā –ī–≤–ł–∂–Ķ–Ĺ–ł–Ķ, —Ā–ĺ–∑–ī–į–≤–į—Ź —ā—Ä–Ķ–Ĺ–ł–Ķ –ī–Ľ—Ź –ī–≤–ł–∂—É—Č–ł—Ö—Ā—Ź —ā—Ä–į–Ĺ—Ā–Ņ–ĺ—Ä—ā–Ĺ—č—Ö —Ā—Ä–Ķ–ī—Ā—ā–≤.
–ė–Ĺ—Ą–ĺ—Ä–ľ–į—Ü–ł—Ź –≤–∑—Ź—ā–į –ł–∑ –ļ–Ĺ–ł–≥–ł ‚ÄúUrban Street Design Guide‚ÄĚ, –Ĺ–į–Ņ–ł—Ā–į–Ĺ–Ĺ–į—Ź National Association of¬†City Transportation Officials. –í —ć—ā–ĺ–Ļ –ļ–Ĺ–ł–≥–Ķ —Ā–ĺ–Ī—Ä–į–Ĺ—č –ī–Ķ—Ā—Ź—ā–ļ–ł –Ņ—Ä–ł–ľ–Ķ—Ä–ĺ–≤ —ā–ĺ–≥–ĺ, –ļ–į–ļ —Ā–ī–Ķ–Ľ–į—ā—Ć —É–Ľ–ł—Ü—č –Ī–Ķ–∑–ĺ–Ņ–į—Ā–Ĺ—č–ľ–ł, —ć–ļ–ĺ–Ľ–ĺ–≥–ł—á–Ĺ—č–ľ–ł –ł –Ņ—Ä–ł—Ź—ā–Ĺ—č–ľ–ł –ī–Ľ—Ź –Ľ—é–ī–Ķ–Ļ –ł –Ī–ł–∑–Ĺ–Ķ—Ā–į. –Į –Ņ—Ä–ĺ—á–ł—ā–į–Ľ –ĺ–ļ–ĺ–Ľ–ĺ 20 –ļ–Ĺ–ł–≥ –Ņ–ĺ —ā–Ķ–ľ–Ķ –≥–ĺ—Ä–ĺ–ī—Ā–ļ–ĺ–≥–ĺ –Ņ–Ľ–į–Ĺ–ł—Ä–ĺ–≤–į–Ĺ–ł—Ź –ł —ć—ā–į –ļ–Ĺ–ł–≥–į —Ā—ā–ĺ–ł—ā –Ĺ–į –≤—ā–ĺ—Ä–ĺ–ľ –ľ–Ķ—Ā—ā–Ķ –ľ–ĺ–Ķ–≥–ĺ —Ä–Ķ–Ļ—ā–ł–Ĺ–≥–į, –Ņ–ĺ—Ā–Ľ–Ķ ‚Äú–Į–∑—č–ļ–į –®–į–Ī–Ľ–ĺ–Ĺ–ĺ–≤‚ÄĚ –ö—Ä–ł—Ā—ā–ĺ—Ą–Ķ—Ä–į –ź–Ľ–Ķ–ļ—Ā–į–Ĺ–ī—Ä–į.