Chapter 11
... In the long run, firms only break even on their investment in producing high-technology goods. That result implies that investors in these firms are also unlikely to earn an economic profit in the long run. ...
... In the long run, firms only break even on their investment in producing high-technology goods. That result implies that investors in these firms are also unlikely to earn an economic profit in the long run. ...
Optimum Factor Combination: Definition: Explanation:
... These are beyond the reach of the producer with CD outlay. Hence point Q is the least cost point. It is the point which is the least cost factor combination for producing 400 units of output with OC units of factor Y and OD units of factor X. Point Q is the equilibrium of the producer. At this poin ...
... These are beyond the reach of the producer with CD outlay. Hence point Q is the least cost point. It is the point which is the least cost factor combination for producing 400 units of output with OC units of factor Y and OD units of factor X. Point Q is the equilibrium of the producer. At this poin ...
Perfect Competition - History with Mr. Bayne
... of societies scarce resources •Perfect Competition forces producers to use limited resources to their fullest. •Inefficient firms have higher costs and are the first to leave the industry. •Perfectly competitive industries are extremely efficient There are two kinds of efficiency: ...
... of societies scarce resources •Perfect Competition forces producers to use limited resources to their fullest. •Inefficient firms have higher costs and are the first to leave the industry. •Perfectly competitive industries are extremely efficient There are two kinds of efficiency: ...
Eco 201 Name______________________________
... a. In a perfectly competitive industry, the industry demand curve is horizontal, whereas for a monopoly it is downward-sloping. False. The industry demand curve is downward sloping in both cases, but from the individual perfectly competitive firm’s point of view, the demand curve is horizontal. Beca ...
... a. In a perfectly competitive industry, the industry demand curve is horizontal, whereas for a monopoly it is downward-sloping. False. The industry demand curve is downward sloping in both cases, but from the individual perfectly competitive firm’s point of view, the demand curve is horizontal. Beca ...
Intermediate Microeconomics
... Specifically, since monopolist chooses market supply, it essentially picks a point on the market demand curve to operate on. This means that for a monopolist, equilibrium price is a function of the quantity they supply, so they effectively get to choose both i.e. choose where to operate on p(q) (“ ...
... Specifically, since monopolist chooses market supply, it essentially picks a point on the market demand curve to operate on. This means that for a monopolist, equilibrium price is a function of the quantity they supply, so they effectively get to choose both i.e. choose where to operate on p(q) (“ ...
Consumer Choice
... willing to pay for it. – Utility: the pleasure or satisfaction obtained from using a good or service. – Total utility: the amount of satisfaction obtained from the consumption of a series of products. – Marginal utility: the change in total utility obtained by consuming one additional (marginal) uni ...
... willing to pay for it. – Utility: the pleasure or satisfaction obtained from using a good or service. – Total utility: the amount of satisfaction obtained from the consumption of a series of products. – Marginal utility: the change in total utility obtained by consuming one additional (marginal) uni ...
File - AP MICROECONOMICS
... These requirements are indivisible, in the sense that a firm cannot keep only half its book or use half of its telephone. As the firm grows, these inputs do not have to be increased much, and so their costs per unit of output fall. Average cost falls, and thus, there are economies of scale bec ...
... These requirements are indivisible, in the sense that a firm cannot keep only half its book or use half of its telephone. As the firm grows, these inputs do not have to be increased much, and so their costs per unit of output fall. Average cost falls, and thus, there are economies of scale bec ...
IPPTChap011
... Explain why the demand curve facing a perfectly competitive firm is perfectly elastic and serves as the firm’s marginal revenue curve Find short‐run profit‐maximizing output, derive firm and industry supply curves, and identify producer surplus Explain characteristics of long‐run competitive e ...
... Explain why the demand curve facing a perfectly competitive firm is perfectly elastic and serves as the firm’s marginal revenue curve Find short‐run profit‐maximizing output, derive firm and industry supply curves, and identify producer surplus Explain characteristics of long‐run competitive e ...
UTILITY and DEMAND
... CONSUMER EQUILIBRIUM • If MU/P for one product equals MU/P for another product the consumer is in equilibrium. They will not change their spending pattern. They have maximised their total utility. ...
... CONSUMER EQUILIBRIUM • If MU/P for one product equals MU/P for another product the consumer is in equilibrium. They will not change their spending pattern. They have maximised their total utility. ...
Answers to Second Midterm
... 4. Suppose the marginal cost curve is increasing as output increases. Then a. Average fixed cost must be decreasing. b. Average variable cost must be decreasing. 5. Suppose that marginal revenue is greater than marginal cost for a firm. Then to profit maximize this firm should produce a a. Higher le ...
... 4. Suppose the marginal cost curve is increasing as output increases. Then a. Average fixed cost must be decreasing. b. Average variable cost must be decreasing. 5. Suppose that marginal revenue is greater than marginal cost for a firm. Then to profit maximize this firm should produce a a. Higher le ...
ECON 1900-2 Chapter 3 Review Quiz One economic principle
... a) if the price of mink coats falls, consumers will purchase more mink coats b) if the price of mink coats falls, there must have been a decrease in the demand for clothes made of fur c) if the price of mink coats falls and there are no important changes in the other factors affecting their demand, ...
... a) if the price of mink coats falls, consumers will purchase more mink coats b) if the price of mink coats falls, there must have been a decrease in the demand for clothes made of fur c) if the price of mink coats falls and there are no important changes in the other factors affecting their demand, ...
Ch05_lec
... historically in allocating resources. Theft, taking property of others without their consent, also plays a large role. But force provides an effective way of allocating resources—for the state to transfer wealth from the rich to the poor and establish the legal framework in which voluntary exchange ...
... historically in allocating resources. Theft, taking property of others without their consent, also plays a large role. But force provides an effective way of allocating resources—for the state to transfer wealth from the rich to the poor and establish the legal framework in which voluntary exchange ...
Producer Choice - The Costs of Production
... Example: As more workers are hired at a firm, each additional worker contributes less and less to the production because the firm has a limited amount of equipment. It explains the shape of the marginal physical product curve ...
... Example: As more workers are hired at a firm, each additional worker contributes less and less to the production because the firm has a limited amount of equipment. It explains the shape of the marginal physical product curve ...
I. The following are examples of cases where exceptional demand
... 2 coffee and 2 scones 5 coffee and 6 scones 3 coffee and 2 scones 4 coffee and 4 scones 4 coffee and 16 scones 20. To say that you can't have too much of a good thing means that for any good that you enjoy (say pizza), A. higher consumption will always lead to greater utility B. higher consumption ...
... 2 coffee and 2 scones 5 coffee and 6 scones 3 coffee and 2 scones 4 coffee and 4 scones 4 coffee and 16 scones 20. To say that you can't have too much of a good thing means that for any good that you enjoy (say pizza), A. higher consumption will always lead to greater utility B. higher consumption ...
Econ 310 Practice Questions: Chaps. 1-3 1. Explicit
... that one of the goods has no effect on utility. that the goods are perfect complements. that the goods are perfect substitutes. that one of the goods is in fact a bad. ...
... that one of the goods has no effect on utility. that the goods are perfect complements. that the goods are perfect substitutes. that one of the goods is in fact a bad. ...
Chapters 1-2-4-6-9
... additional or incremental costs or benefits arising from a choice or decision. ...
... additional or incremental costs or benefits arising from a choice or decision. ...
(a) Monopolistically Competitive Firm
... • The fundamental cause of monopoly is barriers to entry. • Barriers to entry have three sources: – Ownership of a key resource. – The government gives a single firm the exclusive right to produce some good. – Costs of production make a single producer more efficient than a large number of ...
... • The fundamental cause of monopoly is barriers to entry. • Barriers to entry have three sources: – Ownership of a key resource. – The government gives a single firm the exclusive right to produce some good. – Costs of production make a single producer more efficient than a large number of ...
Production Terms
... Production- creation of any good services that has economic value to either consumers or other producers Production Function- mathematical description of the various technical production possibilities faced by a firm Q f ( x , y) where Q is output and x and y are inputs Short-run- corresponds to t ...
... Production- creation of any good services that has economic value to either consumers or other producers Production Function- mathematical description of the various technical production possibilities faced by a firm Q f ( x , y) where Q is output and x and y are inputs Short-run- corresponds to t ...
Externality
In economics, an externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit.For example, manufacturing activities that cause air pollution impose health and clean-up costs on the whole society, whereas the neighbors of an individual who chooses to fire-proof his home may benefit from a reduced risk of a fire spreading to their own houses. If external costs exist, such as pollution, the producer may choose to produce more of the product than would be produced if the producer were required to pay all associated environmental costs. Because responsibility or consequence for self-directed action lies partly outside the self, an element of externalization is involved. If there are external benefits, such as in public safety, less of the good may be produced than would be the case if the producer were to receive payment for the external benefits to others. For the purpose of these statements, overall cost and benefit to society is defined as the sum of the imputed monetary value of benefits and costs to all parties involved. Thus, unregulated markets in goods or services with significant externalities generate prices that do not reflect the full social cost or benefit of their transactions; such markets are therefore inefficient.