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Old 07-28-2011, 01:39 PM   #7
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accelerated depreciation (H2)<br />An initial depreciation allowance greater than the annual wear and tear of a fixed capital asset. For an asset with an expected life of ten years, under the straightline method of depreciation the value of the asset would be deemed to depreciate by 10 per cent per year. But under accelerated depreciation, the value of the asset could perhaps be depreciated by 20 per cent in the first year. Governments have used this fiscal device to encourage private sector investment.

elasticity of substitution (DO)<br />The ease with which one factor of production can be substituted for another. If the elasticity of substitution is greater than unity for a FACTOR OF PRODUCTION, then an increase in its supply will increase its relative share of the national income. HICKS introduced this concept in his Theory of Wages (1926) to show the effect of a change in the supply of one factor, assuming two factors only and constant returns to scale, on the marginal productivity of the other. The concept has been extensively used in the study of PRODUCTION FUNCTIONS and the analysis of the effects of INVENTIONS.<br /> <br /><em>Reference</em><br />Bronfenbrenner, M. (1960) 'A note on relative shares and the elasticity of substitution', Journal of Political Economy 68: 284-7.
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Edgeworth box (DO, Fl)<br />This depicts the trading relationships between two persons or two countries using INDIFFERENCE CURVES and a CONTRACT CURVE which joins the points of tangency where each indifference curve of X touches an indifference curve of Y. In the figure, lx1- lx7 and ly1- ly7 are indifference curves of consumer X and consumer Y respectively. CC is the contract curve. The MARGINAL RATES OF SUBSTITUTIONS are equalized for each consumer.

International Monetary Market (G1)<br />A Chicago-based market established in 1982 for dealing in money futures.
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