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### 48 Cards in this Set

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 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