Microeconomics Week 5 - Assignment Essays %

question

Accounting profit

answer

equals Revenue - Explicit Costs

question

Economic profit

answer

equals Accounting Profit - Implicit Costs

question

Economic profit - summary

answer

=Total Revenue - Explicit Costs - Implicit Costs

question

Short Run

answer

Limited by fixed plant

question

Long Run

answer

All inputs are variable

question

Varies from industry

answer

Short run and long run ________ to industry

question

Marginal product

answer

change of total product divide by change in labor input.

question

fall

answer

At some point, marginal product will _____. (Law of diminishing return)

question

fixed costs

answer

rent, insurance, taxes

question

variable costs

answer

labor, raw materials, maintenance

question

Economies of Scale

answer

Specialization, labor, managerial - Efficient Capital (larger machines) - other factors

question

Diseconomies of scale

answer

Control and coordination problems

question

Adam Smith

answer

Invisible hand concept is win, win, win - manufacturer, consumer and society as a whole.

question

Pure competition

answer

price taker - little to no differentiation between products

question

oligopoly

answer

US auto industry

question

pure competition

answer

Very large number of sellers
Standardized product
Easy entry and exit
Perfectly elastic demand - firms produce as much or as little as they want at the price

question

Marginal revenue

answer

extra revenue from 1 more unit

question

short run does not

answer

The long run allow firms to enter and exit the market, the short run ______

question

recession

answer

temporary shutdown of firms is most widespread during a _________

question

Three questions

answer

Should we produce? How much? How much profit/loss? slide 7-15

question

easy entry and exit

answer

The only consideration for long run profit maximization

question

entry and exit does not affect resource prices

answer

what is a constant cost industry

question

22 percent - 2 years

answer

Approximately ___ of start-up firms in the US go bankrupt in the first ___ years

question

Creative destruction

answer

not beneficial to those in destroyed industries.

1 of 24

question

Accounting profit

answer

equals Revenue - Explicit Costs

question

Economic profit

answer

equals Accounting Profit - Implicit Costs

question

Economic profit - summary

answer

=Total Revenue - Explicit Costs - Implicit Costs

question

Short Run

answer

Limited by fixed plant

question

Long Run

answer

All inputs are variable

question

Varies from industry

answer

Short run and long run ________ to industry

question

Marginal product

answer

change of total product divide by change in labor input.

question

fall

answer

At some point, marginal product will _____. (Law of diminishing return)

question

fixed costs

answer

rent, insurance, taxes

question

variable costs

answer

labor, raw materials, maintenance

question

Economies of Scale

answer

Specialization, labor, managerial - Efficient Capital (larger machines) - other factors

question

Diseconomies of scale

answer

Control and coordination problems

question

Adam Smith

answer

Invisible hand concept is win, win, win - manufacturer, consumer and society as a whole.

question

Pure competition

answer

price taker - little to no differentiation between products

question

oligopoly

answer

US auto industry

question

pure competition

answer

Very large number of sellers
Standardized product
Easy entry and exit
Perfectly elastic demand - firms produce as much or as little as they want at the price

question

Marginal revenue

answer

extra revenue from 1 more unit

question

short run does not

answer

The long run allow firms to enter and exit the market, the short run ______

question

recession

answer

temporary shutdown of firms is most widespread during a _________

question

Three questions

answer

Should we produce? How much? How much profit/loss? slide 7-15

question

easy entry and exit

answer

The only consideration for long run profit maximization

question

entry and exit does not affect resource prices

answer

what is a constant cost industry

question

22 percent - 2 years

answer

Approximately ___ of start-up firms in the US go bankrupt in the first ___ years

question

Creative destruction

answer

not beneficial to those in destroyed industries.

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