Question

Please Define and Provide examples

1.Equilibrium

2.Capital

3.Learning curve

4.Average revenue

5.Demand

6.Supply

7.Shortage

8.Surplus   

9.Endogenous variables

10.Exogenous variables   

Answer 1

1. Equilibrium is a condition in the supply and demand in a market are in a balance condition which made the prices also to became stable within the market. Example is any product having a stable supply and demand in the market.

2). Capital are those assets which are used in any stages of the production. Examples are raw materials, money, machineries etc..

3). Learning curve is a graphical representation which showing how much an individual is attaining new skills, experience and ideas.

Example is if ₹100 is used by a worker to make a product in the first attempt, if there is a 90% learning curve, then the worker will make the product at ₹90 in his second attempt.

4). Average revenue is the price obtained per commodity.

Example is if a firm sells 50 products and it total revenue is $100. Then it average revenue is $2 which is obtained by dividing total revenue by number of products sold.

5). Demand is the desire of an individual to buy goods and services and readiness to pay price for it. Example is if two shops sells a same product at different prices, then demand will be more for the shop selling the product at lower price.

6). Supply refers to the amount of goods and services which are available to the people in an economy. Example is a taxi can take five peoples at a time and that represents its supply.

7). Shortage is a condition at which demand corresponding to a products is higher than its availability in the market. Example is if i want to buy 100 similar products from a market, and if there are only 50 exists in that market. Then there is a shortage exists.

8). Surplus is a situation by which a product is available at a market whose amount is much greater than its utilization of the consumers.

Example is if i want to buy a pen from a markets, if the market contains thousands of pens, then a surplus condition exists.

9). Endogenous variables are variable whose value get changed or it is determined by other variables which are related to it in the specific statistical model. Example is price of a goods is an endogenous variable in supply and demand model. Because manufacturer can change the price of a product according to its demand in the market.

10). Exogenous variables are those variables whose values are determined from the outside of the statistical model amd not from inside. Example : weather is an exogenous variable to crop production.

Thanks !..