recovered once it is incurred. Pure bundling (page 397)Practice of selling products only as a package Pure strategy (Page 470)Strategy in which a player makes a specific choice or takes a specific action. 个 -sqed(Page 659)Percentage of the variation in the dependent variable that is accounted fo by all the explanatory variables. Rate-of-return regulation (page 351)Whereby the maximum price allowed by a regulatory agency is based on the (expected)rate of return that a firm will earn. Reaction curve (Page 432)Relationship between a firm's profit-maximizing output and the 一e(Theowhen competito will produce .e.,after netting out inflation. Real price(page 11)Price of a good relative to an aggregate measure of prices,price adjusted for inflation. Real return(Page 167)Simple(or nominal) ,less the rate of inflation Regulatory lag (page 351)Delays that are ust change Rent seeking (Page 34)Spending money in socially unproductive efforts to acquire,maintain,or exercise monopoly power. Rental rate(page 216)Cost per year of renting one unit of capital. Repeated game(Page 472)Game in which actionsae taken and payoffs received over and ove Reservation price(Page 371)Maximum price that a customer is willing to pay for a good Return(Page 167)Total monetary flow of an asset as a fraction of its price. Returns to scale(page 198)Rate at which output increases as inputs are increased proportionately Revealed preference(Page 86)An approach to consumer theory in which preferences are determined by ob ving the choices make each outcome is known Risk averse (Page 157)Preferring a certain income to a risky income with the same expected value Risk-free return (Page 167)A return which is free of risk,whether of default or interest rate le is the.Treasury bills Risk loving (Page 157)Preferring a risky income to a certain income with the same expected value Risk neutral(page 157)Being indifferent between a certain income and an uncertain income with the same expected value Risk pre m(page 158)Maximum amount of money that arisk-averse person will pay to avoid taking arisk Riskless (or risk-free)asset (Page 167)Asset that provides a flow of money or services that is known with certainty Risky asset (Page 166)Asset that provides an uncertain flow of money or services recovered once it is incurred. Public good (Page 593) Nonexclusive and nonrival good: the marginal cost of provision to an additional consumer is zero and people cannot be excluded from consuming it. Pure bundling (page 397) Practice of selling products only as a package. Pure strategy (Page 470) Strategy in which a player makes a specific choice or takes a specific action. R R-squared (Page 659) Percentage of the variation in the dependent variable that is accounted for by all the explanatory variables. Rate-of-return regulation (page 351) Whereby the maximum price allowed by a regulatory agency is based on the (expected) rate of return that a firm will earn. Reaction curve (Page 432) Relationship between a firm’s profit-maximizing output and the amount it thinks its competitor wi1l produce. Real discount rate (page 544) The discount rate that applies when cash flows are in real terms, i.e., after netting out inflation. Real price (page 11) Price of a good relative to an aggregate measure of prices; price adjusted for inflation. Real return (Page 167) Simple (or nominal) return on an asset, less the rate of inflation. Regulatory lag (page 351) Delays that are usually required to change a regu1ated price. Rent seeking (Page 348) Spending money in socially unproductive efforts to acquire, maintain, or exercise monopo1y power. Rental rate (page 216) Cost per year of renting one unit of capital. Repeated game (Page 472) Game in which actions are taken and payoffs received over and over again. Reservation price (Page 371) Maximum price that a customer is wi1ling to pay for a good. Return (Page 167) Total monetary flow of an asset as a fraction of its price. Returns to scale (page 198) Rate at which output increases as inputs are increased proportionately Revealed preference (Page 86) An approach to consumer theory in which preferences are determined by observing the choices consumers make. Risk (page 150) The possibility of several different outcomes occurring when the probability of each outcome is known. Risk averse (Page 157) Preferring a certain income to a risky income with the same expected value. Risk-free return (Page 167) A return which is free of risk, whether of default or interest rate fluctuations. An example is the return on U.S' Treasury bills. Risk loving (Page 157) Preferring a risky income to a certain income with the same expected value. Risk neutral (page 157) Being indifferent between a certain income and an uncertain income with the same expected value. Risk premium (page 158) Maximum amount of money that a risk-averse person will pay to avoid taking a risk. Riskless (or risk-free) asset (Page 167) Asset that provides a flow of money or services that is known with certainty Risky asset (Page 166) Asset that provides an uncertain flow of money or services