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