Define the following term using graphs and mathematical expression a)utility b)util c)iso cost d)indiffernce curve e)budget line f)monopolist g)d demand curve h)social exploitation i)profit j)perfect competation market.
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a) Utility: Utility refers to the satisfaction or value that an individual derives from consuming a good or service. In the context of economics, it can be represented graphically by an increasing utility function, which depicts how utility changes as the quantity of a good consumed increases. Mathematically, utility can be expressed using an equation, such as U(X,Y) = f(X,Y), where U represents utility, X and Y represent the quantities of two goods, and f represents the specific utility function.
b) Util: Util is a unit of measurement used to quantify the amount of utility derived from consuming a good or service. It is a hypothetical unit that allows economists to make comparisons and calculations regarding the levels of satisfaction between different choices or situations.
c) Iso Cost: Iso cost refers to the various combinations of two inputs (such as labor and capital) that can be used to produce a certain level of output, while maintaining a constant cost of production. These combinations are represented graphically by iso cost lines, which are straight lines that show all the different input combinations that can be purchased with a fixed total cost.
d) Indifference Curve: An indifference curve is a graph that represents different combinations of two goods that provide an individual with the same level of satisfaction or utility. It shows the various trade-offs a consumer is willing to make between two goods while remaining indifferent or equally satisfied. Indifference curves are typically downward sloping and convex to the origin, indicating diminishing marginal rate of substitution - as the quantity of one good increases, the individual is willing to give up less of the other good to maintain the same satisfaction level.
e) Budget Line: A budget line represents the different combinations of two goods that can be purchased with a given level of income or budget. It is typically depicted in a graph, showing the maximum quantity of one good that can be purchased given the price of that good and the price of the other good. The slope of the budget line indicates the relative prices of the two goods, while the point where the budget line intersects an indifference curve represents the optimal consumption choice for a consumer.
f) Monopolist: A monopolist refers to a single seller or producer who has exclusive control over the supply of a particular good or service in the market. As a result of this market power, monopolists can influence prices and restrict output to maximize their profits.
g) Kinked Demand Curve: The kinked demand curve is a concept used to explain price rigidity in oligopoly markets. It assumes that firms in an oligopoly market are highly interdependent, resulting in a situation where a change in price by one firm is often followed by similar price changes by other firms. This leads to a market demand curve that is relatively inelastic above the current price, due to the fear of competitors matching any price decrease, and relatively elastic below the current price, as firms are hesitant to raise prices due to potential loss of market share.
h) Social Exploitation: Social exploitation refers to a situation where one group or entity benefits at the expense or through the disadvantage of another group. It often involves the unfair or unjust use of power or resources to exploit or take advantage of individuals or communities, leading to social and economic inequalities.
i) Profit: Profit refers to the financial gain or the positive difference between total revenue and total cost that a business or individual earns from their economic activities. It can be calculated using the formula: Profit = Total Revenue - Total Cost.
j) Perfect Competition Market: Perfect competition is a market structure where there are many buyers and sellers of a homogeneous (identical) product. In a perfectly competitive market, no single buyer or seller has control over the market price. Key features include ease of entry and exit, perfect information, price-taking behavior by individual firms, and relatively low barriers to entry.