econ 201 ch 13

because both direct and roundabout production take time- time during which goods and services are not available from current production

• consumers value present consumption more than future consumption
• consumer is willing to pay more now that wait

interest per year as a percentage of the amount saved or borrowed

the marginal revenue product of capital expressed as a percentage of its marginal cost

an intangible asset created by human knowledge and ideas

the value today of income to be received in the future

converting future dollar amounts into present value

a given sum of money received each year for a specified number of years