Economics Final Exam

Front 1

relationshop between the lowest attaaniable average total coast and output when both the plan and labor are varied

Back 1

long run average cost curve

Front 2

features of a firms technology that lead to a falling long run avg cost as output increases

Back 2

economies of scale

Front 3

features of a firms technology that lead to a rising long run avg cost as output increases

Back 3

diseconomies of scale

Front 4

features of a firms technology that lead to a constant long run avg cost as output increases

Back 4

constant returns to scale

Front 5

smalles quantity of output at which the long run avg cost reaches the lowest level

Back 5

minimum efficent scale

Front 6

what are the four characteristics of perfect competition?

Back 6

1. many firms sell identical products to many buyers
2. no restrictions to entry
3. established firms have no advantages over newer ones
4. sellers and buyers are well informed about prices

Front 7

what two conditions does perfect competition arise?

Back 7

1. firms min efficent scale is small relative to market demand so there is room for more in the industry
2. goods or services have no unique characteristics so consumers dont care which firm they buy from

Front 8

firms that cannont influence the price of a good or service

Back 8

price taker

Front 9

the price and quanity at which it is indifferent between producing and shutting down

point where avc is at its minimum and also where mc curve crosses avc curve

Back 9

shutdown point

Front 10

what are the two characteristics about a monopoly?

Back 10

restrictions to entry and a good or service with no close substitutes

Front 11

what are the three barriers to entry of a monopoly?

Back 11

1. naturally monopoly
2. ownership barriers
3. legal barriers

Front 12

industry in which economies of scale enable one firm to supply the entire market at the lowest possible cost

Back 12

natural monopoly

Front 13

occurs if one firm owns a significant portion of a key resource

Back 13

ownership barrier

Front 14

a market in which competition and entry are restricted by the granting of public franchise and patents of copyrights

Back 14

legal monopoly

Front 15

firms must sell each unit of its outputs for sam price to all its customers

Back 15

single- price monopoly

Front 16

practice of selling different units of a good or service for different prices.

Back 16

price discrimination

Front 17

true or false monopoly demand is always elastic

Back 17

true

Front 18

a company must___________ and ________ to be able to price discriminate

Back 18

indentify and seperate different buyer types AND sell a product that cannot be resold

Front 19

A perfectly competitive firms shutdown point occurs when the firms?

Back 19

revenue just equals its total variable cost

Front 20

A perfectly competitive firm is definitely earning an economic profit when?

Back 20

Price > average total cost

Front 21

In the long run fixed cost are _____ and variable cost are____

Back 21

zero; positive

Front 22

in the short run fixed cost are positive or negative?

Back 22

positive

Front 23

in a perfectly competitive market that is in long run equilibrium a permanent leftward shift in the market demand cure leads to?

Back 23

firms leaving the industry in the long run

Front 24

if price falls bellow the minimum point on avc, the best a perfecclty competitive firm can do is?

Back 24

shutdown and incurn an economic loss equal to total fixed cost

Front 25

in perfect competition the firms revenue curve is?

Back 25

the same as the demand curve

Front 26

in the short run a perfecctly competitive firm will shut down if?

Back 26

price is < AVC

Front 27

a perfectly competitive firm is producing at the point its marginal cost equals its marginal revenue. If the firm boosts its out, its total revenue will ____ and its profit will____?

Back 27

rise; fall

Front 28

for any perfectly competitive firm marginal recvenue is?

Back 28

equal to price

Front 29

in perfect competition a firm maximizes its economic profit if it produces the output at which?

Back 29

price equals marginal cost

Front 30

in the short run a perfectly competitive firms economic profit can either be?

Back 30

positive, negative, or zero (normal profit)

Front 31

perfect competition arises if the ______ efficent scale of a single producer is______ relative to the demand for the good or service

Back 31

minimum; small

Front 32

A natural monopoly under rate of return regulation has an incentive to?

Back 32

pad its costs

Front 33

for a single price monoply the demand curve lies

Back 33

aboce the marginal revenue curve

Front 34

a price discriminating monopolist produces more outout than that produced by>

Back 34

a single price monopolist

Front 35

a single price monopoly produces less output than it would if it could?

Back 35

price discriminate

Front 36

if a monopolist can perfectly price discriminate it will?

Back 36

charge a different price for every unit sold

Front 37

producer surplus is equal to?

Back 37

producers revenue minus the opportunity cost of production

Front 38

A monopoly firm expands its output and lowers its price . The firm finds that total revenue falls hence the firm is producing in the?

Back 38

inelastic range of the demand curve

Front 39

if a monopolist is maxing profits then it is producing an amount of output so that

Back 39

mr=mc