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28 Cards in this Set

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In the table, average costs when quantity = 0 are crossed out. Why?
Because you can’t divide by 0
In the table, marginal costs when quantity =0 is crossed out. Why?
Because you can’t increase production from a negative amount to zero.
Consider Figure 1 (last page of test). What type of market is this?
Purely competitive market
In Figure 1 ATC has a U shape because
AVC has a U shape
In Fig. 2 which MR curve shows the firm earning an economic loss and shutting down in the short run?
MR4
The place where every firm will operate in order to maximize profits is
Where MC = MR
In Fig. 1 which curve also is the firm’s demand curve?
MR
In Fig. 1 which curve also is the firms supply curve?
MC
Consider the market in Fig 3. What market is this?
Monopoly
The firm in Fig. 3 is a ________ while the firm in Fig. 1 is a ________.
Price searcher, price taker
In Fig. 3, ACE is
Competitive consumers surplus
In Fig. 3 PBDE IS
Profit captured from consumer’s surplus
In Fig. 3 BCD is
Dead weight loss
What type of market is figure 4?
Monopolistically competitive market
In fig 4, P2BYX represents
Economic profit
Free entry and exit larger number of buyers and sellers, homogeneous/ heterogeneous goods and perfect information. Which market do these characteristics not describe?
Monopoly
A group of firms which come together and act like a monopoly:
Cartel
If at quantity = 200, ATC= $15, and AVC=$10, TFC would =?
1401-1800
The theory of regulation which says that regulations are passed not to benefit the public but to benefit the industry being regulated:
Capture theory
The theory of regulation which says that regulations are passed to correct market failures:
Public interest theory
The theory of regulation which says that monopolies and very competitive industries most want to be regulated:
Economic theory of regulation ala Stigler/Peltzman
Section 1 of the Sherman Antitrust Act of 1890 says
Price fixing is illegal
Section 2 of the Sherman Antitrust Act says
Monopolization of the attempt to monopolize is a felony
Section 2 of the Clayton Act says
Price discrimination is illegal
There are 3 types of mergers. Which type describes a producer merging with a supplier?
Vertical merger
In a purely competitive market the firm owner is a
Price taker
Why does ATC have a 'U' shape?
Because AVC has a 'U' shape
What is the only antitrust crime which will put you in jail?
Sect. 1 of the Sherman Act