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48 Cards in this Set

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  • Back
Name the percentage of U.S. firms, average size, and percentage of total business revenues of a proprietorship.
73%, 50,000, 5.1
Name the percentage of U.S. firms, average size, and percentage of total business revenues of a partnership.
7%, 540,000, 5.5
Name the percentage of U.S. firms, average size, and percentage of total business revenues of a corporation.
20%, 3 mil, 89.4
How much a company has paid stockholders in the past year in dollars per share.
Dividend
dividend divided by stock price at closing
Yield %
price of stock divided by earnings per share
PE
number of shares traded per day in hundreds
Vol 100s
The time line that the first Hi/Lo includes
past year
The time frame that the second Hi/Lo includes
past day
net change in price from previous day's closing price
Net Change
Name two solutions to the Moral-Hazard Problem.
Collateral, Incentive-Compatible contract
How do you calculate average fixed cost?
fixed cost over output level
How do you calculate average variable cost?
total variable cost over output level
how do you calculate total cost?
Fixed cost plus variable cost
What are two ways to calculate average total cost?
average fixed cost plus average variable cost; total cost over output level
Where does average cost take its minimum value?
at Marginal Cost=Average Cost
What curve plummets quickly, then evens out?
fixed cost
what curve looks like a "J"?
average variable cost
what curve looks like a "U"?
average total cost
What is an envelope of all short run cost curves for different plant levels?
Long run cost curves
At low output levels, long run average cost falls as output rises
economies of scale
at high output levels, long run average cost rises as output rises
Diseconomies of scale
Name three causes of economies of scale.
specialization, dimiensional factor, improved equipment
Name one cause of diseconomies of scale.
difficulty of management
What does the long run average cost curve look like?
a stretched out "U", with a long minimum point
lowest output level where the constant returns to scale region
minimum efficient scale
In the long run average cost curve, what is the name of the minimum point of the "U" called?
scale region
high competition, room for many efficiently sized plants
Small minimum efficiency scale
low competition, no room for many efficiently sized plants
large minimum efficiency scale
give an example of an industry with a small minimum efficiency scale and an industry with a large minimum efficiency scale.
Small MES-pizza parlor
Large MES-aircraft producer
all sellers are price takers, no one can influence market price
perfect competition
In a perfect competition, if marginal revenue is greater than marginal cost, what should the firm do?
produce more
If the marginal revenue is less than the marginal cost in a perfect competition, what should the firm do?
produce more
When are profits maximized in a perfect competition?
when marginal revenue is equal to marginal cost
Name two ways to calculate profit.
total revenue minus total cost;
(Price-ATC) x Output sold
At the profit maximizing rate of output in a perfect competition, what is the break-even price?
price equals average total cost
At the profit maximizing rate of output in a perfect competition, what is the shut-down price?
Price equals average variable cost
the horizontal summation of all individual firms' supply curves
market supply
the intersection of market demand and market supply
market price
Name the chain of events that occurs in a perfect competition when price is greater than average total cost.
new firms develop, supply increases, market price decreases
Name the chain of events that occurs when price is less than average total cost in a perfectly competition.
firms exit, supply decreases, market price increases
In the long run in perfect competition, what does equilibrium earn?
its normal rate of return
Name three barriers to entry of a monopoly.
ownership of essential resources by a single firm, economies of scale, legal and governmental restrictions
Do monopolies have large or small minimum efficiency levels?
large
What demand curve is the demand curve for monopolists the same as?
market demand curve
In a monopoly, what is always less than the price? What does this mean?
marginal revenue; if the monopoly sells one more unit, the average price of the unit decreases
can marginal revenue be negative?
yes
How does a monopoly maximize profits?
by equalizing marginal revenue and marginal cost