Download 3.01 Production Costs

3.01 Production Costs
Objectives:

What is the difference between accounting and economic profit?

What are the costs of production?

What is the difference between the different costs of production?

What is the difference between marginal, total and average revenue?
Vocabulary:
Term
Accounting profit
Average fixed cost
Average revenue
Average variable cost
Economic profit
Explicit cost
Fixed cost
Implicit cost
Long run
Definition
How will I remember?
Short run
Total cost
Total revenue
Variable cost
Graphs and Notes:
3.02 Graphing Cost Curves
Objectives:

What cost curves do suppliers track to help them make business decisions?

How do you interpret the best combination of labor, land and capital for a producer?

How do you know when efficiency in production is reached?

Why is the total product curve the most important variable in production?
Vocabulary:
Term
Average product
Diminishing marginal returns
Diseconomies of scale
Economies of scale
Inflection
Marginal cost
Marginal product
Negative returns
Output
Total cost
Definition
How will I remember?
Total fixed cost
Total product curve
Graphs and other notes:
3.03 Perfect Competition
Objectives:

What are the characteristics of a perfectly competitive industry?

What is normal profit?

Explain profit maximization

What is the difference between long and short run profit?

What are the efficacies and inefficiencies of a purely competitive market?
Vocabulary:
Term
Perfect competition
Perfectly elastic demand
Graphs and notes:
Definition
How will I remember?
3.04 Perfect Competition Model: Short Run Equilibrium
Objectives:

Analyze the perfect competition model

How do perfect competitors make decisions in the short run?
Vocabulary:
Term
Excess economic profits
Marginal cost
Marginal revenue
Minimum loss
Normal profits
Shut down point
Graphs and notes:
Definition
How will I remember?
3.05 Perfect Competition Model: Long Run Equilibrium
Objectives:

How do perfect competitors make decisions in the long run?

Why is the perfectly competitive firm inefficient?’
Vocabulary:
Term
Allocative efficiency
Excess economic profits
Minimum losses
Normal profits
Productive efficiency
Graphs and notes:
Definition
How will I remember
3.06 Inefficiency of the Monopoly
Objectives:

What are the characteristics of a monopoly?

How does a monopolist determine price and output?

Why is the monopoly outcome inefficient?
Vocabulary:
Term
Entry barrier
Federal Communications Commission
Herfindahi-Hirschman index
Monopoly
Monopoly pricing
Monopsony
Graphs and Notes:
Definition
How will I remember?
3.07 Competition vs. Monopoly
(Skip this dba until the end of unit)
Objectives:

How are perfectly competitive and monopoly different?

What are the characteristics of a monopsony?
Vocabulary:
Graphs and Notes:
3.08 Regulating Monopolies
Objectives:

How are monopolies regulated?

Are regulations effective?

What are the characteristics of a natural monopoly?
Vocabulary:
Term
Average total cost pricing
Average variable cost pricing
Fair-return price
Marginal cost pricing
Price discriminating monopolist
Public utility
Socially optimal price
Graphs and notes:
Definition
How will I remember?
3.09 Consumer and Producer Surplus
Objectives:

Compare and contrast perfect competition and monopoly models.
Vocabulary:
Term
Consumer surplus
Deadweight loss
Efficiency
Producer surplus
Graphs and Notes:
Perfect Completion
Monopoly
3.10 Monopolistic Competition
Objectives:

What are the characteristics of the monopolistic competition model?

How does product differentiation work?

What is the role of advertising and why is it important?

How do firms make decision in the long and short run?

How do firms use excess capacity and inefficiency in decision making?
Vocabulary:
Term
Brand loyalty
Excess capacity
Implicit contract
Monopolistic competition
Product differentiation
Graphs and notes:
Definition
How will I remember?
3.11 Oligopoly
Objectives:

What is the oligopoly model?

Analyze the oligopoly model

What is:
o Interdependence
o
Price collusion
o
Cartel behavior

What are the different types of mergers?

Compare and contrast the different types of mergers.

How does the government test or determine if they will allow a merger?

What is game theory and strategic behavior?
Vocabulary:
Term
Cartel
Conglomerate merger
Dominant strategy
Failing firm
Definition
How will I remember?
Game theory
Horizontal merger
Merger
Nash equilibrium
Oligopoly
Synergy
Vertical integration
Vertical merger
Graphs and notes: