question
average variable costs
answer
cost that go up the more you produce. variable cost/quantity
question
average marginal costs
answer
es el costo de producir una unidad mas de tu producto. change of total cost/change in output
question
average fixed costs
answer
son costos que se mantienen constantes fixed cost/quantity. they decrease as more units are produced
question
average total cost
answer
fixed costs plus variable cost total cost/quantity
question
explicit costs
answer
out of pocket costslike worker wages .
question
implicit costs
answer
Indirect, non-purchased, or opportunity costs of resources provided by the entrepreneur
question
diminishing marginal returns
answer
the more you produce the less return you get.
question
competitive market
answer
There are many buyers and many sellers in the market.
The goods offered by the various sellers are largely the same.
firms here are price takers
The goods offered by the various sellers are largely the same.
firms here are price takers
question
in a perfetly competitive market, what can you do to maximize profits
answer
produce where price is equal to or above marginal cost
question
what is the diference between average revenue and marginal revenue
answer
average revenue es lo que ganas a cada venta y el marginal revenue es lo que le ganas a cada producto adicional que vendes.
question
A farmer sells wheat in a perfectly competitive market. Which action should the farmer take to maximize profits?
answer
Produce the quantity where the price equals the farmer's marginal cost
question
when should a company shut down in terms of its marginal revenue an costs
answer
shut down when your variable costs are more than your price
question
a monopoly
answer
the single entity owns a key resource
curve slopes downward
curve slopes downward
question
what is the ideal quantity that a monopoly should sell?
answer
where marginal revenue equals marginal cost. charge more and people wont buy
question
price discrimination
answer
monopolies may sell their product at diferent prices to tell people's willingness to buy at that price.
question
The profit-maximization problem for a monopolist differs from that of a competitive firm how?
answer
A competitive firm maximizes profit at the point where average revenue equals marginal cost; a monopolist maximizes profit at the point where average revenue exceeds marginal cost.
question
A monopoly can earn positive profits because it
answer
can maintain a price such that total revenues will exceed total costs.
question
Monopolistic Competition Characteristics
answer
many sellers, products that are diferent enough that there are no close substitute.
firms have some control over price
firms have some control over price
question
how is the demand curve for a monopolistic competitive firm ?
answer
it slopes downward like in a monopoly but has far more elasticity
question
what is the best output for a monopolistically competitive firm in the short run
answer
price greater than total cost
question
best output for a monopolistically competitive firm in the long run and why
answer
price equals average total cost. because it becomes perfect competition
question
Oligopoly Characteristics
answer
few sellers with identical or differentiated products. firms can charge whatever they want if they form a cartel
question
how is monopolistic competition similar to monopoly
answer
Monopolistic competition is similar to monopoly because both market structures are characterized by firms being price makers rather than price taker
question
Suppose a market is initially perfectly competitive with many firms selling an identical product. Over time, however, suppose the merging of firms results in the market being served by only three or four firms selling this same product. As a result, we would expect
answer
a decrease in market output and an increase in the price of the product.
question
In the prisoners' dilemma game, self-interest leads
answer
each prisoner to confess.
question
if oligopolists collude what would be the result for 2 firms colluding
answer
If duopolists successfully collude, then their combined output will be equal to the output that would be observed if the market were a monopoly.
question
If a certain market were a monopoly, then the monopolist would maximize its profit by producing 4,000 units of output. If, instead, that market were a duopoly, then which of the following outcomes would be most likely if the duopolists successfully collude?
answer
One duopolist produces 2,400 units of output and the other produces 1,600 units of output.
question
A consumer's budget constraint shows
answer
the possible combinations of different goods she can buy given her income and the prices of the goods.
question
An indifference curve shows
answer
the various bundles of goods that make the consumer equally happy.
question
what is income effect and substitution effect
answer
The income effect is the change in consumption that arises because a lower price makes the consumer better off. The substitution effect is the change in consumption that arises because a price change encourages greater consumption of the good that has become relatively cheaper.
question
On a graph we draw a consumer's budget constraint, measuring the number of pineapples on the horizontal axis and the number of pencils on the vertical axis. If the slope of the budget constraint is -6, then
answer
a. a pineapple costs six times as much as a pencil.
question
do indiference curves bow outward?
answer
no, they always bow inward
question
A good is an inferior good if the consumer buys less of it when
answer
b. his income rises.
question
When the price of a normal good increases,
answer
both the income and substitution effects encourage the consumer to purchase less of the good.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
