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During the short run a firm cannot
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change
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A fixed resource is one that
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any resources that cannot be varied in the short run.
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The time period during which all factors of production can be varied is the
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Long Run
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If the marginal product is negative then...
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firm is producing at a loss
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Average physical product is calculated by dividing a total product by the
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variable input
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Marginal physical product is...
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the change in total output that results from changing the fixed input by one unit.
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The law of diminishing marginal product indicates that...
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- As more units of a variable input are employed with a fixed input, marginal physical product eventually begins to decline.
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Marginal cost is defined as...
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- The change in total costs due to a one-unit change in production rate
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9. The long run for a business is a period of time that...
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all factors of production can be varied
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10. Which of the following is a characteristic of perfect competition?
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*NOT NONE OF THE ABOVE*
it's a price taker, because:
1. Large number of buyers and sellers
2. Homogenous products are perfect substitutes
3. Buyers and sellers have equal access to information
4. No barriers to entry or exit
it's a price taker, because:
1. Large number of buyers and sellers
2. Homogenous products are perfect substitutes
3. Buyers and sellers have equal access to information
4. No barriers to entry or exit
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In a perfectly competitive industry...what happens?
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- A market structure in which the decisions of individual buyers and sellers have no effect on market price
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A price taker is a firm that...
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- A competitive firm that must take the price of its product as given because the firm cannot influence its price
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If a firm is a perfect competitor then...
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it's a price taker, because:
1. Large number of buyers and sellers
2. Homogenous products are perfect substitutes
3. Buyers and sellers have equal access to information
4. No barriers to entry or exit
1. Large number of buyers and sellers
2. Homogenous products are perfect substitutes
3. Buyers and sellers have equal access to information
4. No barriers to entry or exit
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At the short run rate even point the perfectly competitive firm is?
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The firm is just making a normal rate of return on its capital investments.
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15. Where does marginal revenue come from? How do you get marginal revenue, what did you do to get it?
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change is total revenue resulting from a one unit change in output and sales of the product in question
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16. The rate of production at which marginal revenue equals marginal costs is?
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Profit maximization occurs at the rate of output at which marginal revenue equals marginal cost.
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17. A perfectly competitive firm can produce 20,000 bushels of corn in a year. At the output where the marginal cost equals the marginal revenue. At this time the market price of corn per bushel is 2.00$, the firms total cost per year is 50,000$, of which the fixed cost are 25,000$ a year. In the short run what should this firm do?
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lose more if they go out of business
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18. The opportunity cost to society of producing one more unit of the good is...
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marginal cost
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19. In a perfectly competitive industry if p> mc... then what?
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Too little is being produced because price is greater than cost to society
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20. In a perfectly competitive industry if p<mc... then what?
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Then too much is being produced because cost to society is too great
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Which of the following is a characteristic of a monopoly market?
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- A single supplier of a good or service for which there is no close substitute
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A tax that is imposed on an imported good is called what?
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Tariff
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The demand curve that is faced by the monopolist is what?
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Downward-sloping demand curve
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For a monopolist marginal revenue is always... (Talking about price)
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• Marginal revenue equals the change in total revenue due to a one-unit change in the quantity produced and sold
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The more substitutes that are for a monopolist product, what happens?
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Lower the price
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In Maximizing economic profit, the monopolist will do what?
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Price output combination
- The monopolist is a price searcher= A firm that must determine the price-output combination that maximizes profit because it faces a downward-sloping demand curve
- The monopolist is a price searcher= A firm that must determine the price-output combination that maximizes profit because it faces a downward-sloping demand curve
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Price discrimination is
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Selling a given product at more than one price, with the difference being unrelated to differences in cost
Answer A: IS NOT RIGHT
Answer A: IS NOT RIGHT
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A firm will practice price discrimination when it believes that by doing so it will be able to increase total what?
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total revenue
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Which of the following is a characteristic of a monopolistic competition?
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1. Significant numbers of sellers in a highly competitive market
2. Differentiated products
3. Sales promotion and advertising
4. Easy entry of new firms in the long run
2. Differentiated products
3. Sales promotion and advertising
4. Easy entry of new firms in the long run
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The demand curve for the product of a monopolistic competitor is?
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*It is not a double transfer hyperbole* Demand curve slopes downward
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In the long run firms in a monopolistically competitive market do what?
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Zero Economic profits
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A monopolistic competitor will maximize its profits at the output level at which
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marginal costs intersect marginal from below
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A monopolistic competition and a perfect competition are similar in that each market structure is characterized by...
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If both a monopolistic and perfect competitor make zero economic profit in the long run
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Any computer game is an example of
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information product
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The product that must be actually consumed before the quality of the product can be determined is?
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experience good
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The first unit of an information product is produced at a high fixed cost...producing additional units entails relatively low
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marginal cost
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Which of the following is a characteristic of oligopoly?
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- Small number of firms
- Interdependence
- Interdependence
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A market situation in which there are very few sellers is?
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Oligopoly
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Vertical merger occurs when?
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- The joining of a firm with another to which it sells an output or from which it buys an input
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Which of the following is an example of a vertical merger?
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...
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Which of the following is an example of a horizontal merger?
answer
...
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Horizontal merger occurs when?
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- The joining of firms that are producing or selling a similar product
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A game in which any games 1 player makes is offset by equal law suits by another player is known as a...?
answer
Zero- Sum Game
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A game at which player collectively loses are known as what?
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Negative Sum Game
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A cartel is...
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An association of producers in an industry that agree to set common prices and output quotas to prevent competition.
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The two basic types of government regulation are?
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1. Economic regulation
2. Social regulation
2. Social regulation
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One key purpose of economic regulation is?
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- Aimed at controlling prices in industries considered natural monopolies
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An automobile manufacturer voluntarily recalls certain models to fix a defective part at no cost to the owners. This example has the effect of?
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Social Regulation- positive market feedback
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49. The federal trade commission regulates which of the following?
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Consumer protection- ex. Avoiding monopolies
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50. The first major law created to control the growth of monopoly powers was the?
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Sherman Act
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51. Financial markets are regulated by?
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1. Securities and Exchange Commission (SEC) 2.Commodity Futures Trading Commission (CFTC).
Economic regulation
Economic regulation
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