November 5, 2004
... explicit payment, whereas economists do consider the opportunity cost of all inputs used, even if no explicit payment occurs. In this case, revenues are $6,000 per week. Explicit costs are $3,000 for raw materials and $3,000 for hiring workers. Implicit opportunity costs include $600 for rent and $5 ...
... explicit payment, whereas economists do consider the opportunity cost of all inputs used, even if no explicit payment occurs. In this case, revenues are $6,000 per week. Explicit costs are $3,000 for raw materials and $3,000 for hiring workers. Implicit opportunity costs include $600 for rent and $5 ...
7. Profit maximization and supply
... 7.6. Short-run supply by a price-taking firm (5) Practice questions according to the graph on the handout (a) Where is the firm’s supply curve (b) What is the break-even production level (c) What is the shutdown price level? (d) What is the total profit at the shutdown ...
... 7.6. Short-run supply by a price-taking firm (5) Practice questions according to the graph on the handout (a) Where is the firm’s supply curve (b) What is the break-even production level (c) What is the shutdown price level? (d) What is the total profit at the shutdown ...
Chapter 22 - WordPress.com
... question: Can we use taxes on cigarettes to offset present bias and actually make people better off in the process? A recent study concludes that to fully offset the present bias that underlies the decision to smoke, the appropriate tax is roughly $11 per pack of cigarettes. • The study focused on t ...
... question: Can we use taxes on cigarettes to offset present bias and actually make people better off in the process? A recent study concludes that to fully offset the present bias that underlies the decision to smoke, the appropriate tax is roughly $11 per pack of cigarettes. • The study focused on t ...
Demand
... • Utility = Satisfaction • We buy goods because we get utility from them • The law of diminishing marginal utility states that as you consume more units of any good, the additional satisfaction from each additional unit will eventually start to decrease • In other words, the more you buy of ANY GOOD ...
... • Utility = Satisfaction • We buy goods because we get utility from them • The law of diminishing marginal utility states that as you consume more units of any good, the additional satisfaction from each additional unit will eventually start to decrease • In other words, the more you buy of ANY GOOD ...
File - 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: ...
The Monopolist`s Demand Curve and Marginal Revenue
... 1. The key difference between a monopoly and a perfectly competitive industry is that a single perfectly competitive firm faces a horizontal demand curve but a monopolist faces a downward-sloping demand curve. This gives the monopolist market power, the ability to raise the market price by reducing ...
... 1. The key difference between a monopoly and a perfectly competitive industry is that a single perfectly competitive firm faces a horizontal demand curve but a monopolist faces a downward-sloping demand curve. This gives the monopolist market power, the ability to raise the market price by reducing ...
Econ 101, sections 4 and 5, S09
... b. Normative statements involve value judgments. *. Any statement making a claim about the future is necessarily normative. d. Deciding what is good or bad policy is not just a matter of science. 14. Which of the following is a normative statement? a. The average price of gasoline in the U.S. is low ...
... b. Normative statements involve value judgments. *. Any statement making a claim about the future is necessarily normative. d. Deciding what is good or bad policy is not just a matter of science. 14. Which of the following is a normative statement? a. The average price of gasoline in the U.S. is low ...
Profit Maximization - University of Hawaii at Manoa
... What is the supply function of the firm? The supply function expresses a relationship between the price of the product and the quantity supplied of that product by the firm. Note that input or factor demand or derived demand is derived from profit maximization (using the input formulation in the pr ...
... What is the supply function of the firm? The supply function expresses a relationship between the price of the product and the quantity supplied of that product by the firm. Note that input or factor demand or derived demand is derived from profit maximization (using the input formulation in the pr ...
Chapter 3
... The market equilibrium price and quantity are socially optimal when all relevant production costs are incurred by sellers, and when all relevant product benefits accrue to buyers. Production of some goods entails costs that fall on people other than those who sell the good. In other cases, ...
... The market equilibrium price and quantity are socially optimal when all relevant production costs are incurred by sellers, and when all relevant product benefits accrue to buyers. Production of some goods entails costs that fall on people other than those who sell the good. In other cases, ...
Industry Structure I - BYU Marriott School
... – Logic: If the firm raises price, consumers can get the same product for less from rivals, so sales fall to zero. – Logic: If the firm lowers price, it gets all market demand but does so for lower price than it could ...
... – Logic: If the firm raises price, consumers can get the same product for less from rivals, so sales fall to zero. – Logic: If the firm lowers price, it gets all market demand but does so for lower price than it could ...
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.