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14 Cards in this Set

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  • Back
UTILITY
BENEFIT OR SATISFACTION THAT A PERSON GETS FROM THE CONSUMPTION OF A GOOD OR SERVICE
FIRM
AN ECONOMIC UNIT THAT HIRES FACTORS OF PRODUCTION AND ORGANIZES THOSE FACTORS TO PRODUCE AND SELL GOODS AND SERVICES
NORMAL PROFIT
THE EXPECTED RETURN FOR SUPPLYING ENTREPRENEURIAL ABILITY
ECONOMIC PROFIT
A FIRMS' TOTAL REVENUE MINUS ITS OPPURTUNITY COST
PERFECT COMPETITION
A MARKET IN WHICH THERE ARE MANY FIRMS EACH SELLING AN IDENTICAL PRODUCT, ETC
OLIGOPOLY
A MARKET STRUCTURE IN WHICH A SMALL NUMBER OF FIRMS COMPETE
MONOPOLY
A MARKET STRUCTURE IN WHICH THERE IS ONE FIRM, WHICH PRODUCES A GOOD OR SERVICE THAT HAS NO CLOSE SUBSTITUTE, PREVENTION OF ENTRY OF NEW FIRMS.
4-FIRM CONCENTRATION RATIO
A MEASURE OF MARKET POWER THAT IS CALCULATED AS THE PERCENTAGE OF THE VALUE OF SALES ACCOUNTED FOR BY THE 4 LARGEST FIRMS IN AN INDUSTRY.
HERFINDAHL-HIRSCHMAN INDEX
A MEASURE OF MARKET POWER THAT IS CALCULATED AS THE SQUARE OF THE MARKET SHARE OF EACH FIRM (%) SUMMED OVER THE LARGEST 50 FIRMS OR LESS IN A MARKET.
SHORT RUN (FIRM)
PERIOD OF TIME IN WHICH QUATINTY OF 1+ INPUT IS FIXED AND QUANTITIES OF OTHER INPUTS CAN BE VARIED
SHORT RUN: (INDUSTRY)
PERIOD OF TIME IN WHICH EACH FIRM HAS A GIVEN PLANT SIZE AND THE NUMBER OF FIRMS IN THE INDUSTRY IS FIXED.
LONG RUN
PERIOD OF TIME IN WHICH THE QUANTITIES OF ALL RESOURCES CAN BE VARIED
SUNK COST
THE PAST COST OF BUYING A PLANT THAT HAS NO RESALE VALUE
LAW OF DIMINISHING RETURNS
AS A FIRM USES MORE OF A VARIABLE INPUT, WITH A GIVEN QUANTITY OF OTHER INPUTS (FIXED), THE MARGINAL PRODUCT OF THE VARIABLE INPUT EVENTUALLY DIMINISHES.