Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
25 Cards in this Set
- Front
- Back
|
What does an economist consider economic cost?
|
Explicit (accounting costs) + Implicit
(Opportunity costs) |
|
|
What value is economics profit when there is a normal profit?
|
Zero (break-even)
|
|
|
Are accouting profits higher or lower than economic profits?
|
Higher
|
|
|
When does diminishing return start on a graph of marginal product?
|
When it turns downward (the vertex)
|
|
|
What happens to average product when marginal product lies above the average product?
|
Average Product is increasing
|
|
|
What is Total Fixed Cost?
|
The cost at zero units of production
|
|
|
In the long run all resources are ______.
In the short run at least one resource is ______. |
In the long run all resources are variable.
In the short run at least one resource is fixed. |
|
|
Economies of Scale (definition)
|
When quantity increases Average Total Cost decreases.
|
|
|
On a graph of TR and TC (Fish) where is the point of profit maximization?
|
Where the difference between the curves is the greatest.
|
|
|
The demand curve for what type of firm is perfectly elastic?
|
Purely competitive
|
|
|
What is the short run supply curve under pure competition?
|
The firm's supply curve is the Marginal Cost curve about the shutdown point (intersection of MC and AVC)
|
|
|
What industriy most closey approximates pure competition?
|
Agriculture
|
|
|
What can a purely competitive firm NOT earn in the long run?
|
Economic Profit
|
|
|
Is a monopoly a price maker or a price taker?
|
Price Maker
|
|
|
When a monopoly is producing at P=ATC what is it earning?
|
Normal Profit/Break even
|
|
|
What is price discrimination?
|
Selling the same product at different prices even the cost stayed the same.
|
|
|
What kind of long run supply line does an increasing cost industry have?
|
Upsloping
|
|
|
A monopolist will charge a ____price and produce ____outputs than a competitive firms.
|
A monopolist will charge a higher price and produce smaller outputs than a competitive firms.
|
|
|
What is the pure monopolist demand curve the same as?
|
The industry demand curve
|
|
|
Why can pure monopolies earn economic profit in the long run?
|
Because it there is barriers for entry into the industry
|
|
|
In a pure monopoly what is the point where ATC=P?
|
The Fair Return Price or Full-cost price for regulation
|
|
|
What type of firm is described?
Relatively Large Number of Sellers Differentiated Products Easy Entry and Exit Each Seller has a small market share No collusion |
Monopolistic Competition
|
|
|
What is the best example of an oligopoly?
|
Auto Industry
|
|
|
What is the concentration ratio of the top 4 firms of an oligopoly?
|
50% of the market share
|
|
|
Why does a kink exist in the demand curve of an oligopoly?
|
IN the interest of maintaining market share and profits, oligopoly firms are more likely to follow price cuts by competing firms in the industry than price increases.
|
