Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

9 Cards in this Set

  • Front
  • Back
Accounting Profit vs Economic Profit
Accounting: TR - explicit costs
Economic: TR - explicit costs - implicit costs (forgone salary, forgone interest)
The 3 types of firms
Proprietorship- 1 person, all liability
Partnership- 2 or more, liability shared between them
Corporation- stockholders with limited liability, not required to use personal wealth to pay corp's debts
Types of market concentration measures
4 firm: % of sales accounted for by largest 4 firms in industry
Herfindahl-Hirschman Index: Square of market share of top 50 firms, added up
What is supply? Law of supply?
All the price and quantity combinations that producers are willing and able to offer. As price increases, quantity supplied incrseases.
"Explain the decline in falling income on the housing market."
Demand decreases because housing is a normal good. Supply decreases because of decrease in business expectations.
What is the significance of price elasticity?
%change in quantity demanded, over %change in price >1 = elastic (responsive), <1 = inelastic (unresponsive)
What does elastic and inelastic demand mean to the firm?
Elastic: lowering price will increase revenue
Inelastic: increasing price will increase revenue
What is the significance of cross-price elasticity?
%change in price of one good, over %change in quantity demanded of another good.
>0 = substitutes
<0 = complements
What is the significance of income elasticity?
%change in quantity demanded, over %change in income.
>0 = normal good
<0 = inferior good