Final Exam - Econ. 202

Front 1

shows the amount of goods that can be produced given the amount of land, labor, machinery, and technology available

Back 1

Production Possibilities Frontier (PPF)

Front 2

who can produce the good at a lower cost; formula:
what you must give up/ what you want

Back 2

comparative advantage

Front 3

as price falls, quantity demanded rises and as price rises, quantity demanded falls; states that price and quantity are inversely related

Back 3

Law of demand

Front 4

how much will be purchased at any given price

Back 4

demand

Front 5

the amount that will be purchased at a particular price

Back 5

quantity demanded

Front 6

If there is a decrease in price, there will be an increase in ___________________.

Back 6

quantity demanded

Front 7

all other things held equal

Back 7

CETERIS PARIBUS

Front 8

5 common reasons demand will change

Back 8

1)a change in tastes and preferences 2)a change in law 3)a change in expectations 4)a change in income 5)a change in the price of other goods

Front 9

when incomes rise, demand for the good will fall

Back 9

inferior good

Front 10

when incomes rise, demand for the good will also rise

Back 10

norman good

Front 11

with ______________, the price of one falls and the demand for the other rises; the price rises, and the demand for the other falls

Back 11

complements

Front 12

With _______________, the price of one rises and the demand for the other also rises

Back 12

substitutes

Front 13

as price rises, quantity supplied will also rise; as price falls, quantity supplied will also fall

Back 13

law of supply

Front 14

what brings more of the good to the market at a lower price?

Back 14

competition

Front 15

what is caused by firms entering or leaving the industry?

Back 15

change in supply

Front 16

where quantity demanded equals quantity supplied and there are no unintended shortages or surpluses

Back 16

equilibrium

Front 17

coming together of buyers and sellers whose joint decisions determine the price

Back 17

market

Front 18

when quantity supplied is less than quantity demanded at a specific price;

Back 18

shortage

Front 19

when quantity supplied is greater than quantity demanded at a specific price

Back 19

surplus

Front 20

what says that it is against the law to raise a price of a good right after a disaster occurs?

Back 20

anti-price gouging laws

Front 21

legal maximum price which can be charged for a good or service; always lies below the equilibrium; always causes a shortage; in the long run, always hurts society

Back 21

price ceiling

Front 22

a legal minimum price which can be charged for a good or service; result in a surplus; always lies above the equilibrium; in the long run, always hurts society

Back 22

price floor

Front 23

the amount that consumers are willing to pay for a good or service, but did not have to

Back 23

consumers surplus

Front 24

what is the equation for producers opportunity cost (POC)?

Back 24

total revenue - producers surplu

Front 25

a measure of the responsiveness of consumers to a change in economic variable (such as price)

Back 25

elasticity

Front 26

the amount of satisfaction you receive from a good or service

Back 26

utility

Front 27

stay the same no matter how much is produced; include opportunity cost of producing that good or service; ex: rent, property tax, salary

Back 27

fixed costs

Front 28

costs that vary, change with production; ex: wages, inputs, utilities, transportation, unemployment insurance

Back 28

total variable costs

Front 29

given a fixed amount of capital, additional inputs will initially increase production; however, at some point adding more inputs will lower production because the capital is fixed

Back 29

law of diminishing marginal production

Front 30

1)large # of buyers and seller 2)homogenous good or service 3)free entry and exit 4)perfect information

Back 30

purely competitive market

Front 31

a price taker

Back 31

purely competitive market

Front 32

where will every firm operate in order to maximize profit?

Back 32

where MR = MC

Front 33

a time period short enough that at least one factor of production can't be changed

Back 33

short run

Front 34

a time period long enough that all factors of production can be changed

Back 34

long run

Front 35

single producer of a good or service (1 graph); price searcher

Back 35

monopoly

Front 36

economic activity lost due to monopoly presence

Back 36

dead weight loss

Front 37

"someone will build the better mousetrap" by joseph schumpeter

Back 37

schumpetarian monopoly

Front 38

says that the only way a monopoly can exist today is through government coersion; by Gordon Tolluck

Back 38

Tolluckian monopoly

Front 39

a group of firms which come together and act like a monopoly; ex: OPEC (Organization of Petroleum Exporting Countries)

Back 39

cartel

Front 40

regulations are passed to correct market failures

Back 40

public interest theory of regulation

Front 41

turned us into the consumer industry we are today; popularized mass production

Back 41

Samuel Insull

Front 42

regulations are passed, not to benefit the public, but to benefit the industry being regulated

Back 42

capture theory of regulation

Front 43

laws and regulations which seek to preserve business competition

Back 43

Antitrust laws

Front 44

when 2 competitors go together and agree to set a price; section I of the sherman act makes it illegal

Back 44

price fixing

Front 45

makes monopolization or the attempt to monopolize a felony

Back 45

section II of the sherman act

Front 46

makes price discrimination illegal

Back 46

the clayton act of 1914

Front 47

when was the sherman act formed?

Back 47

1890

Front 48

charging 2 different prices to 2 different groups where the difference in price is not based on a difference in cost

Back 48

price discrimination

Front 49

what 3 things must you have for price discrimination to occur?

Back 49

1)at least 2 different, easily identifiable groups 2)the firm must have some form of monopoly power 3)there can be no arbitrage

Front 50

makes tying arrangements, requirements contracts, exclusive dealings, and territorial restraints illegal where the effects of such may be to substantially decrease competition or tend to create a monopoly

Back 50

Section III of the Clayton act

Front 51

made all unfair methods of competition in commerce illegal

Back 51

the FTC act (federal trade commerce)

Front 52

a measure of the degree to which the largest firms in an industry account for total industry assets, sales, or some other factor

Back 52

concentration ratios

Front 53

# 1 way that firms tend to move towards monopolization

Back 53

mergers

Front 54

mergers in the same industry; always challenged by the government

Back 54

horizontal

Front 55

merging with a supplier; often challenged by the government

Back 55

vertical

Front 56

firms in separate industries merging together; never challenged by the government

Back 56

conglomerate

Front 57

5 steps firms have to go through to merge

Back 57

1)define the market
2)examine pre and post merger HHI
3)examine entry conditions
4)look at all other factors
5)judge must ask "Is it possible to increase efficiency without the merger?"

Front 58

1)unionized labor 2)the state action doctrine 3)patents 4)agricultural cooperatives 5)Noerr-Pennington Doctrine 6)professional sports

Back 58

antitrust exemptions

Front 59

comes from sherman act; "does not prohibit 2 or more persons from associating together in an attempt to persuade the legislature to take particular action with respect to a law that would produce or restrain monopoly

Back 59

Noerr-Pennington Doctrine

Front 60

4 great environmental myths

Back 60

1)anthropogenic global warming
2)hole in the ozone
3)disappearing forest
4)mass extinctions

Front 61

come from Norman Myers - 1976; wrote a book "the sinking ark"; said by 2000, 25% of all species of life on earth would be extinct

Back 61

mass extinction