question
3 shifters of PPS
answer
1) Trade 2) Technology 3) resource quantity or quality
question
shifters of demand
answer
Number of consumers, Future Expectations, Price of Related Goods, Income, Taste and Preferences
question
shifters of supply
answer
Technology, Opportunity Cost of Alternative Production, Price/Availability of Inputs, Number of Sellers, Future Expectations, Government Action
question
3 shifters of resource demand
answer
1) changes in demand of Product (Price goes up, MRP and Demand go up), 2) Changes in productivity (technology goes up, MRP and Demand go up), 3) Changes in price of other resources (complementary, substitutes)
question
3 shifters of supply of labor
answer
1) Number of qualified workers (Education, Training, etc...), 2) Government regulation/licensing, 3) Personal values regulating leisure time and social roles
question
Demand and Price go up
answer
value of workers goes down
question
Productivity and MP go up
answer
value of workers goes up
question
Labor Market Imperfections
answer
1) Unions (strikes=higher Eq wages)
2) Insufficient/misleading info (prevents workers from seeking better employment)
3) Geographical Immobility
2) Insufficient/misleading info (prevents workers from seeking better employment)
3) Geographical Immobility
question
Free Market
answer
1) Laissez Faire
2) Individuals own Resources and determine what to produce how to produce and for whom.
3) Profit gives incentive to produce quality items
4) Wide variety of goods
5) Competition and self interest regulate the economy
2) Individuals own Resources and determine what to produce how to produce and for whom.
3) Profit gives incentive to produce quality items
4) Wide variety of goods
5) Competition and self interest regulate the economy
question
4 Origins of Monopoly
answer
1) Geographic barriers
2) Government is the Barrier to Entry (patents to protect inventors)
3) Technology and Common Use is the Barrier to Entry
4) Mass Production and Low Costs are Barriers to Entry
2) Government is the Barrier to Entry (patents to protect inventors)
3) Technology and Common Use is the Barrier to Entry
4) Mass Production and Low Costs are Barriers to Entry
question
5 Characteristics of Monopoly
answer
1) High Barriers to Entry
2) Some "Nonprice" Competition (they still advertise to increase demand)
3) Products with no close substitutes
4) Firm is the industry
5) Price Maker (can manipulate the price by changing the quantity it produces)
2) Some "Nonprice" Competition (they still advertise to increase demand)
3) Products with no close substitutes
4) Firm is the industry
5) Price Maker (can manipulate the price by changing the quantity it produces)
question
Cartel=Colluding Oligopoly
answer
1)Cartels set price and output at an agreed upon level
2) Firms require identical or highly similar demand and costs
3) Cartel must have a way to punish cheaters
4) Together they act as a monopoly
2) Firms require identical or highly similar demand and costs
3) Cartel must have a way to punish cheaters
4) Together they act as a monopoly
question
Natural Monopoly
answer
One firm can produce the socially optimal quantity at the lowest cost due to economies of scale
question
FC changes
answer
TC, AFC, ATC change
question
VC changes
answer
TC, MC, AVC and ATC change
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