The marginal efficiency of capital (MEC) is that rate of discount which would equate the price of a fixed capital asset with its present discounted value of expected income. The term “marginal efficiency of capital” was introduced by John Maynard Keynes in his General Theory, and defined as “the rate of discount which would make the present value of the series of annuities given by the returns expected from the capital asset during its life just equal its supply price”. The MEC is the net rate of return that is expected from the purchase of additional capital. It is calculated as the profit that a firm is expected to earn considering the cost of inputs and the depreciation of capital. It is influenced by expectations about future input costs and demand. The MEC and capital outlays are the elements that a firm takes into account when deciding about an investment project. The MEC needs to be higher than the rate of interest, r, for investment to take place. This is because the present value PV of future returns to capital needs to be higher than the cost of capital, Ck.These variables can be expressed as follows: * where n is the number of years during which the capital will be productive, and Ri is the net return in year i; * where Ck is the upfront capital outlays; this equation defines the MEC. Hence, for investment to take place, it is necessary that PV > Ck; that is, MEC > r.As a consequence, an inverse relationship between the rate of interest and investment is found (i.e.: a higher rate of interest generates less investment). With the European Commission according to its data bank "AMECO" (Annual Macro-Economic Data) the marginal efficiency of capital is defined as "Change in GDP at constant market prices of year T per unit of gross fixed capital formation at constant prices of year T-.5 [that is, lagged by half a year]. (Wikipedia).
Unit 5 - practice problem 1 solution
From playlist Courses and Series
In this video we cover the idea of marginal cost. This is simply the derivative of the cost function. We can roughly define marginal cost as the cost of producing one additional item. For more videos please visit http://www.mysecretmathtutor.com
From playlist Calculus
Ex 1: Cost Function Applications - Marginal Cost, Average Cost, Minimum Average Cost
This video explains how several application of the cost function including total cost, marginal cost, average cost, and minimum average cost. The total cost function is a quadratic function. Site: http://mathispower4u.com
From playlist Applications of Differentiation – Maximum/Minimum/Optimization Problems
From playlist Courses and Series
Unit 5 - practice problem 1 question
From playlist Courses and Series
Ex 2: Cost Function Applications - Marginal Cost, Average Cost, Minimum Average Cost
This video explains how several application of the cost function including total cost, marginal cost, average cost, and minimum average cost. The total cost function is a quadratic function. Site: http://mathispower4u.com
From playlist Applications of Differentiation – Maximum/Minimum/Optimization Problems
Unit 7 - no price discrimination part 2
From playlist Courses and Series
From playlist Courses and Series
Mod-01 Lec-30 Keynesian economics
History of Economic Theory by Dr. Shivakumar, Department of Humanities and Social Sciences IIT Madras, For more details on NPTEL visit http://nptel.iitm.ac.in
From playlist IIT Madras: History of Economic Theory | CosmoLearning.org Economics
MIT 14.01 Principles of Microeconomics, Fall 2018 Instructor: Prof. Jonathan Gruber View the complete course: https://ocw.mit.edu/14-01F18 YouTube Playlist: https://www.youtube.com/playlist?list=PLUl4u3cNGP62oJSoqb4Rf-vZMGUBe59G- This lecture continues the discussion about producer theory
From playlist MIT 14.01 Principles of Microeconomics, Fall 2018
Lec 9 | MIT 14.01SC Principles of Microeconomics
Lecture 9: Productivity and Costs Instructor: Jon Gruber, 14.01 students View the complete course: http://ocw.mit.edu/14-01SCF10 License: Creative Commons BY-NC-SA More information at http://ocw.mit.edu/terms More courses at http://ocw.mit.edu
From playlist MIT 14.01SC Principles of Microeconomics
This video explains how to use fundamental analysis to determine if a company may be undervalued or overvalued by using valuation ratios such as the price to book ratio, price to sales, & price to earnings ratio. It also explains how to determine if a company may go bankrupt using the deb
From playlist Stocks and Bonds
MIT 14.01 Principles of Microeconomics, Fall 2018 Instructor: Prof. Jonathan Gruber View the complete course: https://ocw.mit.edu/14-01F18 YouTube Playlist: https://www.youtube.com/playlist?list=PLUl4u3cNGP62oJSoqb4Rf-vZMGUBe59G- This video introduces the second unit of the course about p
From playlist MIT 14.01 Principles of Microeconomics, Fall 2018
Unit 5 - pareto optimal allocations part 5
From playlist Courses and Series
Deeparnab Chakrabarty: Polynomial Lower Bounds for Parallel Submodular Function Minimization
HIM Workshop: Continuous approaches to discrete optimization
From playlist Workshop: Continuous approaches to discrete optimization
Lec 8 | MIT 14.01SC Principles of Microeconomics
Lecture 8: Introduction to Producer Theory Instructor: Jon Gruber, 14.01 students View the complete course: http://ocw.mit.edu/14-01SCF10 License: Creative Commons BY-NC-SA More information at http://ocw.mit.edu/terms More courses at http://ocw.mit.edu
From playlist MIT 14.01SC Principles of Microeconomics
Bitcoin Q&A: Solar Energy & Mining in Space
Solar energy efficiency advances and proof-of-work. Factoring in capital costs of/ access to solar panels & mining equipment, access to internet, opportunity cost for excess energy and storage capacity. Energy scarcity is a fundamental issue. Sudoku as a proof-of-work algorithm. Bitcoin mi
From playlist English Subtitles - aantonop Videos with subtitles in English
Mod-01 Lec-28 The centrality of the idea of efficiency in the study of market
History of Economic Theory by Dr. Shivakumar, Department of Humanities and Social Sciences IIT Madras, For more details on NPTEL visit http://nptel.iitm.ac.in
From playlist IIT Madras: History of Economic Theory | CosmoLearning.org Economics
The benefits of a centralised margin infrastructure
David Maloy, COO of NetOTC, speaks to PwC Partner, Chris Matten about how NetOTC has been affected by centralised margin infrastructure at Risk Minds International 2015 in Amsterdam. Twitter: www.twitter.com/RiskMinds Linked In: www.linkedin.com/groups/3263290 Facebook: www.facebook.com/R
From playlist RiskMinds Live 2015
From playlist Courses and Series