Chapter 6 Competitive Markets
... To see how to calculate these answers, start with the row where the quantity of output equals 2. Recall that the marginal cost of the second unit of output equals the difference between the total cost of producing 2 units minus the total cost of producing 1 unit. Hence, the total cost of producing 2 ...
... To see how to calculate these answers, start with the row where the quantity of output equals 2. Recall that the marginal cost of the second unit of output equals the difference between the total cost of producing 2 units minus the total cost of producing 1 unit. Hence, the total cost of producing 2 ...
CHAPTER 10: Organizing Production (Pg
... original level, market output has decreased, and economic profit for each firm returns to zero. 2. A permanent increase in demand increases the market quantity, and the market price rises above ATC for each firm. In the short run, firms in the industry experience an economic profit, attracting firms ...
... original level, market output has decreased, and economic profit for each firm returns to zero. 2. A permanent increase in demand increases the market quantity, and the market price rises above ATC for each firm. In the short run, firms in the industry experience an economic profit, attracting firms ...
Chapter 3 Some key terms
... • In practice, we cannot plot ex ante demand curves and supply curves • So we use historical data and the supposition that the observed values are equilibrium ones • Since other things are often not constant, some detective work is required • This is where our theory comes in useful ...
... • In practice, we cannot plot ex ante demand curves and supply curves • So we use historical data and the supposition that the observed values are equilibrium ones • Since other things are often not constant, some detective work is required • This is where our theory comes in useful ...
CHAPTER 9 – MONOPOLY (6e)
... a lower output and charge a higher price. Because the monopolist’s price is higher and output lower than under a perfectly competitive market, and because the monopolist may be able to earn a profit in the LR whereas perfectly competitive firms can only break even in the LR, it is often believed tha ...
... a lower output and charge a higher price. Because the monopolist’s price is higher and output lower than under a perfectly competitive market, and because the monopolist may be able to earn a profit in the LR whereas perfectly competitive firms can only break even in the LR, it is often believed tha ...
Krugman CH 14
... marginal revenue curve of a firm with market power always lies below its demand curve. So a profitmaximizing monopolist chooses the output level at which marginal cost is equal to marginal revenue— not to price. ...
... marginal revenue curve of a firm with market power always lies below its demand curve. So a profitmaximizing monopolist chooses the output level at which marginal cost is equal to marginal revenue— not to price. ...
Chapter 4
... line to change slope but keeping utility fixed (so stay on original indifference curve). This new b.c. is just temporary one to show this effect. • Then Income effect: Allow pure change I as a shift of this new temporary budget line up to higher indifference curve. Shows the increased utility from t ...
... line to change slope but keeping utility fixed (so stay on original indifference curve). This new b.c. is just temporary one to show this effect. • Then Income effect: Allow pure change I as a shift of this new temporary budget line up to higher indifference curve. Shows the increased utility from t ...
Notes for Chapter 4 - FIU Faculty Websites
... in our society. Economic explanation Desire and preference plays and important part in our consumption decision, however price and income play a part as well. Demand is the ability and willingness to buy specific quantities of goods at alternative prices in a given time period, ceteris paribus. The ...
... in our society. Economic explanation Desire and preference plays and important part in our consumption decision, however price and income play a part as well. Demand is the ability and willingness to buy specific quantities of goods at alternative prices in a given time period, ceteris paribus. The ...
Difficult Cases for the Market and the Role of Government (15th ed)
... doing to the best of your ability.” Is this really true? • Economics indicates that at some point the gains from doing something better will not be worth the cost. • It makes sense to stop short of perfection. • Economics is about trade-offs: Even worthy activities can be pursued beyond the level co ...
... doing to the best of your ability.” Is this really true? • Economics indicates that at some point the gains from doing something better will not be worth the cost. • It makes sense to stop short of perfection. • Economics is about trade-offs: Even worthy activities can be pursued beyond the level co ...
Supply and demand together!
... government has imposed the lowest price that can be paid for labor at $7.25/hour. The result is a surplus of workers (that’s part of the reason we have an unemployment rate!) ...
... government has imposed the lowest price that can be paid for labor at $7.25/hour. The result is a surplus of workers (that’s part of the reason we have an unemployment rate!) ...
The Law of Demand
... Ex: you are so hungry that you eat 10 hamburgers. You will really enjoy that first bite but each additional bite will give you LESS satisfaction. ...
... Ex: you are so hungry that you eat 10 hamburgers. You will really enjoy that first bite but each additional bite will give you LESS satisfaction. ...
MONOPOLIES
... activities/services that have important social benefits. For example profits made on commuter rail or bus services may allow transport companies to support loss making rural or night-time services. Without the ability to price discriminate these services may have to be with drawn and employment migh ...
... activities/services that have important social benefits. For example profits made on commuter rail or bus services may allow transport companies to support loss making rural or night-time services. Without the ability to price discriminate these services may have to be with drawn and employment migh ...
Sample Exam
... Sample Exam 1. Note there are 8 more multiple choice questions than will appear on a live exam. 1) Microeconomics studies the allocation of A) decision makers. B) scarce resources. C) models. D) unlimited resources. 2) The Oregon Health Care Plan is an example of how policy makers cope with A) scarc ...
... Sample Exam 1. Note there are 8 more multiple choice questions than will appear on a live exam. 1) Microeconomics studies the allocation of A) decision makers. B) scarce resources. C) models. D) unlimited resources. 2) The Oregon Health Care Plan is an example of how policy makers cope with A) scarc ...
Chapter 7 Cost Theory
... Measuring Cost: Which Cost Matter? n Accounting Cost • Consider only explicit cost, the out of pocket cost for such items as wages, salaries, materials, and property rentals n Economic Cost • Considers explicit and opportunity cost. – Opportunity cost is the cost associated with opportunities that a ...
... Measuring Cost: Which Cost Matter? n Accounting Cost • Consider only explicit cost, the out of pocket cost for such items as wages, salaries, materials, and property rentals n Economic Cost • Considers explicit and opportunity cost. – Opportunity cost is the cost associated with opportunities that a ...
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.