CH_5_Economics_Notes_Website
... A fixed cost is a cost that does not change, regardless of how much of a good is produced. Examples: rent and salaries Variable costs are costs that rise or fall depending on how much is produced. Examples: costs of raw materials, some labor costs. The total cost equals fixed costs plus variable cos ...
... A fixed cost is a cost that does not change, regardless of how much of a good is produced. Examples: rent and salaries Variable costs are costs that rise or fall depending on how much is produced. Examples: costs of raw materials, some labor costs. The total cost equals fixed costs plus variable cos ...
change in - Humble ISD
... satisfaction someone gets from the use of a product • Marginal utility is the extra satisfaction one gets from getting one more unit of the product • Diminishing marginal utility is the decreasing satisfaction as additional units of a product are acquired ...
... satisfaction someone gets from the use of a product • Marginal utility is the extra satisfaction one gets from getting one more unit of the product • Diminishing marginal utility is the decreasing satisfaction as additional units of a product are acquired ...
Practice Problems
... What is one reason why monopolies are considered inefficient? (A)They don’t produce enough and therefore resources are underallocated in that market (B)They produce at an output level where marginal cost > price (C)They produce more output than does a competitive industry (D)They produce too much a ...
... What is one reason why monopolies are considered inefficient? (A)They don’t produce enough and therefore resources are underallocated in that market (B)They produce at an output level where marginal cost > price (C)They produce more output than does a competitive industry (D)They produce too much a ...
Factors of Production
... • MRP = demand curve for Factors of Production • MRP = marginal product of input x market price of output – Measures the value in dollars of output produced ...
... • MRP = demand curve for Factors of Production • MRP = marginal product of input x market price of output – Measures the value in dollars of output produced ...
Word
... In the Home X industry, labor is paid the value of its marginal product. That marginal product has increased by 10% due to the improved technology, so labor’s wage in units of X has gone up by that amount. However, the price of X has fallen, and we don’t know by how much. If the price falls by less ...
... In the Home X industry, labor is paid the value of its marginal product. That marginal product has increased by 10% due to the improved technology, so labor’s wage in units of X has gone up by that amount. However, the price of X has fallen, and we don’t know by how much. If the price falls by less ...
Example 12.1 Minimizing Costs for a Cobb
... 2. Capital Costs: For accountants capital costs are the historical price of a machine, adjusted for depreciation. Here the economists cost notion is quite different. For economists the cost of machine is the implicit value of the machine – that is, economic cost is assessed in terms of alternative u ...
... 2. Capital Costs: For accountants capital costs are the historical price of a machine, adjusted for depreciation. Here the economists cost notion is quite different. For economists the cost of machine is the implicit value of the machine – that is, economic cost is assessed in terms of alternative u ...
Multiple Choice
... $15, and MC = $14. In order to maximize profits, this monopolist should A) change price and let production adjust to the new price. B) shut down. C) decrease production and increase price. D) not change his output level, because he is currently at the profit-maximizing output level. E) increase prod ...
... $15, and MC = $14. In order to maximize profits, this monopolist should A) change price and let production adjust to the new price. B) shut down. C) decrease production and increase price. D) not change his output level, because he is currently at the profit-maximizing output level. E) increase prod ...
Public Goods
... At the efficient quantity of a public good, the marginal social benefit is equal to the marginal social cost. Governments provide public goods because an individual’s marginal benefit is less than the marginal social benefit, and so individuals do not have an incentive to pay for providing the effic ...
... At the efficient quantity of a public good, the marginal social benefit is equal to the marginal social cost. Governments provide public goods because an individual’s marginal benefit is less than the marginal social benefit, and so individuals do not have an incentive to pay for providing the effic ...
Economics - cloudfront.net
... Explain the four conditions for a perfectly competitive market. ii. Explain and demonstrate the relationship between the market price for a perfectly competitive market and the marginal revenue of the firm in a perfectly competitive market. Be sure to use two graphs side by side to demonstrate this ...
... Explain the four conditions for a perfectly competitive market. ii. Explain and demonstrate the relationship between the market price for a perfectly competitive market and the marginal revenue of the firm in a perfectly competitive market. Be sure to use two graphs side by side to demonstrate this ...
An Artificially Scarce Good
... estimate the social costs and social benefits of providing a public good. • Although governments should rely on cost-benefit analysis to determine how much of a public good to supply, doing so is problematic because individuals tend to overstate the good’s value to them. ...
... estimate the social costs and social benefits of providing a public good. • Although governments should rely on cost-benefit analysis to determine how much of a public good to supply, doing so is problematic because individuals tend to overstate the good’s value to them. ...
Answers to Homework #4
... c. Suppose you are told that there is an increase in input prices so that at every price the market supply changes by 90 units. What is the new market supply curve given this information? What is the new equilibrium price and quantity in this market? What quantity will a representative firm produce ...
... c. Suppose you are told that there is an increase in input prices so that at every price the market supply changes by 90 units. What is the new market supply curve given this information? What is the new equilibrium price and quantity in this market? What quantity will a representative firm produce ...