Economics - Assignment Essays

question

opportunity cost

answer

includes both implicit and explicit

question

variable inputs

answer

can be increased or decreased in the short run

question

as output changes

answer

a variable cost is one that changes

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variable cost

answer

on a graph of production costs, the vertical distance between the fixed cost curve and the total cost curve at a specific quantity represents

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increasing

answer

when marginal product is decreasing, marginal cost is

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MC crosses AVC at its minimum

answer

describe the relationship between the marginal cost and average variable cost curves

question

TR-EC

answer

accounting profit equation

question

TR-(EC+IC)

answer

economic profit equation

question

accounting profit=implicit costs

answer

normal profit

question

the law of diminishing marginal returns

answer

the most important feature of production in the short run

question

FC+VC

answer

total cost equation

question

change in TC/q

answer

marginal cost equation

question

VC/q

answer

average variable cost equation

question

TC/q

answer

average total cost equation

question

planning horizon

answer

the long run is considered the

question

plan, produce

answer

firms __ in the long run and ___ in the short run

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economies of scale

answer

forces that reduce a firm's average cost as the sale of operation increases in the long run is known as

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diseconomies of scale

answer

if a firm becomes too large and LRAC increases as output expands, the firm is now experiencing

question

false

answer

True or False: in perfect competition, each firm's output is a large fraction of total market supply

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marginal revenue

answer

average revenue for a perfectly competitive firm is equal to

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maximizes the difference between TR and TC

answer

perfectly competitive firms that earn an economic profit in the short run choose the output that

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fixed cost

answer

in the short run if a firm shuts down its loss is equal to

question

answer

there are no ____ when a firm shuts down

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price equals MC

answer

to maximize profit a perfectly competitive firm that decides not to shut down will choose the rate of output at which

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AVC minimum

answer

point of indifference between staying open and shutting down

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eliminating EP

answer

the entry of new firms into competitive industry in the long run has the effect of

question

the industry is a constant cost industry

answer

Suppose that a long run adjustment in a perfectly competitive industry results in a decreased supply but leaves price unchanged

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allocatively efficient

answer

the sum of consumer and producer surplus is maximized

question

productive efficiency

answer

the production of a good at its lowest long run average cost

question

perfectly elastic

answer

shape of demand curve

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TR curve

answer

starts at the origin and has a positive slope

question

TC curve

answer

starts at fixed cost

question

answer

find price

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MR x q

answer

TR at profit maximizing point

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new price x q

answer

TC at profit maximizing point

question

difference between MR and new price times quantity

answer

total profit

question

MR minus new price

answer

profit per unit

question

maximize, minimize

answer

firms try to ___ profit or ___ loss

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minimum of ATC

answer

where is the break even point

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starts from minimum of AVC and goes up

answer

where is the short run supply curve

question

LxW

answer

how is loss determined on a graph?

question

shifts right

answer

when the market is in equilibrium and there is an increase in demand, what happens to supply?

question

increases

answer

what happens to the price of the product as demand increases

question

equilibrium

answer

firms are in the long run when economic profit returns to

question

loss

answer

if demand had decreased instead of increasing in the short run, firms would have suffered an economic___

question

increasing cost industry

answer

if in the long run both price and output rise, the result would be an

question

zero

answer

long run economic profit is always

question

entry and exit in the market

answer

perfect competition because of freedom of

question

horizontal

answer

in constant cost the supply curve is

question

increased, increasing

answer

if, as a result of an LR adjustment in a perfectly competitive industry to a change in demand, price, and output all rise, then demand must have ___ in this ___ cost industry

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MC goes down

answer

MR goes up

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MC goes up

answer

MR goes down

question

marginal pulls down average

answer

MC < AVC

question

marginal pulls up the average

answer

MC > AVC

question

declines

answer

(shape) MC < AVC

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increases

answer

MC > AVC (shape)

question

AVC

answer

U shape of ___ curve reflects law of diminishing marginal returns

question

economies of scale

answer

LRAC falls as output expands

question

diseconomies of scale

answer

LRAC increases as output expands

question

LRAC

answer

U shaped long run average cost curve (planning curve)

question

small

answer

firms are ___ in perfect competition

question

economic profit

answer

TR > TC

question

economic loss

answer

TR < TC

question

MR=MC

answer

a firm produces where

question

firm

answer

short run ___ supply curve is the upward sloping portion of the MC curve above minimum AVC curve

question

industry

answer

short run ___ supply curve is the horizontal sum of all firms' short run supply curve

question

productive efficiency

answer

making stuff right

question

productive efficiency

answer

produce output at least possible cost

question

productive efficiency

answer

minimum point on LRAC curve

question

productive efficiency

answer

P=minimum average cost in long run

question

allocative efficiency

answer

making the right stuff

question

allocative efficiency

answer

impossible to increase total utility

question

allocative efficiency

answer

produce goods and services that consumers value most

question

allocative efficiency

answer

marginal benefit (P) of the last unit produced=marginal cost

1 of 74

question

opportunity cost

answer

includes both implicit and explicit

question

variable inputs

answer

can be increased or decreased in the short run

question

as output changes

answer

a variable cost is one that changes

question

variable cost

answer

on a graph of production costs, the vertical distance between the fixed cost curve and the total cost curve at a specific quantity represents

question

increasing

answer

when marginal product is decreasing, marginal cost is

question

MC crosses AVC at its minimum

answer

describe the relationship between the marginal cost and average variable cost curves

question

TR-EC

answer

accounting profit equation

question

TR-(EC+IC)

answer

economic profit equation

question

accounting profit=implicit costs

answer

normal profit

question

the law of diminishing marginal returns

answer

the most important feature of production in the short run

question

FC+VC

answer

total cost equation

question

change in TC/q

answer

marginal cost equation

question

VC/q

answer

average variable cost equation

question

TC/q

answer

average total cost equation

question

planning horizon

answer

the long run is considered the

question

plan, produce

answer

firms __ in the long run and ___ in the short run

question

economies of scale

answer

forces that reduce a firm's average cost as the sale of operation increases in the long run is known as

question

diseconomies of scale

answer

if a firm becomes too large and LRAC increases as output expands, the firm is now experiencing

question

false

answer

True or False: in perfect competition, each firm's output is a large fraction of total market supply

question

marginal revenue

answer

average revenue for a perfectly competitive firm is equal to

question

maximizes the difference between TR and TC

answer

perfectly competitive firms that earn an economic profit in the short run choose the output that

question

fixed cost

answer

in the short run if a firm shuts down its loss is equal to

question

answer

there are no ____ when a firm shuts down

question

price equals MC

answer

to maximize profit a perfectly competitive firm that decides not to shut down will choose the rate of output at which

question

AVC minimum

answer

point of indifference between staying open and shutting down

question

eliminating EP

answer

the entry of new firms into competitive industry in the long run has the effect of

question

the industry is a constant cost industry

answer

Suppose that a long run adjustment in a perfectly competitive industry results in a decreased supply but leaves price unchanged

question

allocatively efficient

answer

the sum of consumer and producer surplus is maximized

question

productive efficiency

answer

the production of a good at its lowest long run average cost

question

perfectly elastic

answer

shape of demand curve

question

TR curve

answer

starts at the origin and has a positive slope

question

TC curve

answer

starts at fixed cost

question

answer

find price

question

MR x q

answer

TR at profit maximizing point

question

new price x q

answer

TC at profit maximizing point

question

difference between MR and new price times quantity

answer

total profit

question

MR minus new price

answer

profit per unit

question

maximize, minimize

answer

firms try to ___ profit or ___ loss

question

minimum of ATC

answer

where is the break even point

question

starts from minimum of AVC and goes up

answer

where is the short run supply curve

question

LxW

answer

how is loss determined on a graph?

question

shifts right

answer

when the market is in equilibrium and there is an increase in demand, what happens to supply?

question

increases

answer

what happens to the price of the product as demand increases

question

equilibrium

answer

firms are in the long run when economic profit returns to

question

loss

answer

if demand had decreased instead of increasing in the short run, firms would have suffered an economic___

question

increasing cost industry

answer

if in the long run both price and output rise, the result would be an

question

zero

answer

long run economic profit is always

question

entry and exit in the market

answer

perfect competition because of freedom of

question

horizontal

answer

in constant cost the supply curve is

question

increased, increasing

answer

if, as a result of an LR adjustment in a perfectly competitive industry to a change in demand, price, and output all rise, then demand must have ___ in this ___ cost industry

question

MC goes down

answer

MR goes up

question

MC goes up

answer

MR goes down

question

marginal pulls down average

answer

MC < AVC

question

marginal pulls up the average

answer

MC > AVC

question

declines

answer

(shape) MC < AVC

question

increases

answer

MC > AVC (shape)

question

AVC

answer

U shape of ___ curve reflects law of diminishing marginal returns

question

economies of scale

answer

LRAC falls as output expands

question

diseconomies of scale

answer

LRAC increases as output expands

question

LRAC

answer

U shaped long run average cost curve (planning curve)

question

small

answer

firms are ___ in perfect competition

question

economic profit

answer

TR > TC

question

economic loss

answer

TR < TC

question

MR=MC

answer

a firm produces where

question

firm

answer

short run ___ supply curve is the upward sloping portion of the MC curve above minimum AVC curve

question

industry

answer

short run ___ supply curve is the horizontal sum of all firms' short run supply curve

question

productive efficiency

answer

making stuff right

question

productive efficiency

answer

produce output at least possible cost

question

productive efficiency

answer

minimum point on LRAC curve

question

productive efficiency

answer

P=minimum average cost in long run

question

allocative efficiency

answer

making the right stuff

question

allocative efficiency

answer

impossible to increase total utility

question

allocative efficiency

answer

produce goods and services that consumers value most

question

allocative efficiency

answer

marginal benefit (P) of the last unit produced=marginal cost

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