to discourage new entrants in amarket so that a firm can enjoy higher future profits. Present discouted value ((page 535)The current value of an expected future cash fow Price-consumption curve (page 102)A curve tracing the utility-maximizing combinations of two goods as the price of one changes. Price diserimination (page 371)Practice of charging different prices to different consumers for similar goods. of demand(page 3)Percentage change in quantity demanded ofa rom a percent increase in its price. Price elasticity of supply (page 33)Percentage change in quantity supplied resulting from a 1-percent increase in price. Price leadership (page 447)Pattern of pricing in which one firm regularly announces price changes that other ms then match. Price rigidity (Page 446)Characteristic of oligopolistic markets by which firms are reluctant to change prices even if costs or demands change Price signaling (Page 447)Form of implicit collusion in which a firm announces a price increase in the hope that other firms will follow suit. Price support(Page 302)Price set by government above free-maket level and maintained by governmental purchases of supply Principal-agent problem(page 609)Problem arising when managers(agents)pursue their own goals even when doing so entails lower profits for a firm's owners(the principals). Prineipal (page609)Individual who employs one or more agents to achieve an objective. Prisoners'dilemma (page 443)Game rs must decide sepa ratey wheth r to cont recive a light and his accomplice will receive a heavier one,but if neither confesses,sentences will be lighter than if both confess. Private-value auction (Page 492)Auction in which each bidder knows his individual valuation of the object up for bid,with valuations differing from bidder to bidder Probability (Page 150)Likelihood that a given outcome will occu Producer surplus (Page 269)Sum (over all units produced by a firm)of differences between market price of a good and marginal costs of production. Product transformation curve (page 230)Curve showing the various combinations of two different ouputs (products)that can be produced with a givens of inputs. Production act curve (page 580)Curve show all technically fcient combinations of inputs Production function(Page 178)Function showing the highest output that a firm can produce for every specified combination.of inputs. Prodtionp rtier(p)Curvewng the mnofdtha can be produced with fixed quantitic of inputs Profit(Page255)Diff rence bet cen total revenue and total co Profit maximization (Page 254)The goal of a firm;it is achieved when the marginal revenue of the firm is equal to the marginal cost of production. Property rights (Page 638)Legal rules stating what people or firms may do with their property Prospective sunk cost (Page 205)A cost that has not yet been incurred but that cannot beto discourage new entrants in a market so that a firm can enjoy higher future profits. Present discounted value (贴现值)(page 535) The current value of an expected future cash flow Price-consumption curve (page 102) A curve tracing the utility-maximizing combinations of two goods as the price of one changes. Price discrimination (page 371) Practice of charging different prices to different consumers for similar goods. Price elasticity of demand (page 30) Percentage change in quantity demanded of a good resulting from a 1-percent increase in its price. Price elasticity of supply (page 33) Percentage change in quantity supplied resulting from a 1-percent increase in price. Price leadership (page 447) Pattern of pricing in which one firm regularly announces price changes that other firms then match. Price of risk (page 170) Extra risk that an investor must incur to enjoy a higher expected return. Price rigidity (Page 446) Characteristic of oligopolistic markets by which firms are reluctant to change prices even if costs or demands change. Price signaling (Page 447) Form of implicit collusion in which a firm announces a price increase in the hope that other firms will follow suit. Price support (Page 302) Price set by government above free-market level and maintained by governmental purchases of excess supply Principal-agent problem (page 609) Problem arising when managers (agents) pursue their own goals even when doing so entails lower profits for a firm’s owners (the principals). Principal (page 609) Individual who employs one or more agents to achieve an objective. Prisoners' dilemma (page 443) Game theory example in which two prisoners must decide separately whether to confess to a crime; if a prisoner confesses, he will receive a lighter sentence and his accomplice will receive a heavier one, but if neither confesses, sentences will be lighter than if both confess. Private-value auction (Page 492) Auction in which each bidder knows his individual valuation of the object up for bid, with valuations differing from bidder to bidder Probability (Page 150) Likelihood that a given outcome will occur. Producer surplus (Page 269) Sum (over all units produced by a firm) of differences between market price of a good and marginal costs of production. Product transformation curve (page 230) Curve showing the various combinations of two different outputs (products) that can be produced with a given set of inputs. Production contract curve (page 580) Curve show all technically efficient combinations of inputs. Production function (Page 178) Function showing the highest output that a firm can produce for every specified combination .of inputs. Production possibilities frontier (page 581) Curve showing the combinations of two goods that can be produced with fixed quantities of inputs. Profit (Page 255) Difference between total revenue and total cost. Profit maximization (Page 254) The goal of a firm; it is achieved when the marginal revenue of the firm is equal to the marginal cost of production. Property rights (Page 638) Legal rules stating what people or firms may do with their property Prospective sunk cost (Page 205) A cost that has not yet been incurred but that cannot be