Download Test 3 - Sections 11, 12, 13 & 14 - Vocab Review

Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. price-taking firm’s optimal output rule; 2. break-even price; 3. shutdown price; 4. short-run market equilibrium;
_____an economic balance that results when the quantity supplied equals
the quantity demanded, taking the number of producers as given.
_____the price at which a firm ceases production in the short run because
the price has fallen below the minimum average variable cost.
_____the market price at which a firm earns zero profits.
_____the profit of a price-taking firm is maximized by producing the
quantity of output at which the market price is equal to the marginal cost
of the last unit produced.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. price-taking firm’s optimal output rule; 2. break-even price; 3. shutdown price; 4. short-run market equilibrium;
__4__an economic balance that results when the quantity supplied equals
the quantity demanded, taking the number of producers as given.
__3__the price at which a firm ceases production in the short run because
the price has fallen below the minimum average variable cost.
__2__the market price at which a firm earns zero profits.
__1__the profit of a price-taking firm is maximized by producing the
quantity of output at which the market price is equal to the marginal cost
of the last unit produced.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. long-run market equilibrium; 2. public ownership; 3. price regulation;
4. price discrimination;
_____charging different prices to different consumers for the same good.
_____when goods are supplied by the government or by a firm owned by
the government to protect the interests of the consumer in response to
natural monopoly.
_____an economic balance in which, given sufficient time for producers
to enter or exit an industry, the quantity supplied equals the quantity
demanded.
_____a limitation on the price that a monopolist is allowed to charge.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. long-run market equilibrium; 2. public ownership; 3. price regulation;
4. price discrimination;
__4__charging different prices to different consumers for the same good.
__2__when goods are supplied by the government or by a firm owned by
the government to protect the interests of the consumer in response to
natural monopoly.
__1__an economic balance in which, given sufficient time for producers
to enter or exit an industry, the quantity supplied equals the quantity
demanded.
__3__a limitation on the price that a monopolist is allowed to charge.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. collusion; 2. game theory; 3. payoff matrix; 4. dominant strategy;
_____cooperation among producers to limit production and raise prices
so as to raise one another’s profits.
_____the study of behavior in situations of interdependence. Used to
explain the behavior of an oligopoly.
_____in game theory, a diagram that shows how the payoffs to each of
the participants in a two-player game depend on the actions of both; a
tool in analyzing interdependence.
_____in game theory, an action that is a player’s best action regardless
of the action taken by the other player.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. collusion; 2. game theory; 3. payoff matrix; 4. dominant strategy;
__1__cooperation among producers to limit production and raise prices
so as to raise one another’s profits.
__2__the study of behavior in situations of interdependence. Used to
explain the behavior of an oligopoly.
__3__in game theory, a diagram that shows how the payoffs to each of
the participants in a two-player game depend on the actions of both; a
tool in analyzing interdependence.
__4__in game theory, an action that is a player’s best action regardless
of the action taken by the other player.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. Nash equilibrium; 2. tacit collusion; 3. product differentiation; 4. price
leadership;
_____a pattern of behavior in which one firm sets its price and other
firms in the industry follow.
_____in game theory, the equilibrium that results when all players choose
the action that maximizes their payoffs given the actions of other players,
ignoring the effect of that action on the payoffs of other players.
_____the attempt by firms to convince buyers that their products are not
the same from those of other firms in the industry. If firms can so
convince buyers, they can charge a higher price.
_____cooperation among producers, without a formal agreement, to limit
production and raise prices so as to raise one anothers’ profits.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. Nash equilibrium; 2. tacit collusion; 3. product differentiation; 4. price
leadership;
__4__a pattern of behavior in which one firm sets its price and other
firms in the industry follow.
__1__in game theory, the equilibrium that results when all players choose
the action that maximizes their payoffs given the actions of other players,
ignoring the effect of that action on the payoffs of other players.
__3__the attempt by firms to convince buyers that their products are not
the same from those of other firms in the industry. If firms can so
convince buyers, they can charge a higher price.
__2__cooperation among producers, without a formal agreement, to limit
production and raise prices so as to raise one anothers’ profits.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. Excess capacity; 2. physical capital; 3. human capital; 4. derived
demand;
_____when firms produce less than the output at which average total cost
is minimized; characteristic of monopolistically competitive firms.
_____demand for a factor results from the demand for the output being
produced.
_____the improvement in labor created by the education and knowledge
embodied in the workforce.
_____ human-made goods such as buildings and machines used to
produce other goods and services.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. Excess capacity; 2. physical capital; 3. human capital; 4. derived
demand;
__1__when firms produce less than the output at which average total cost
is minimized; characteristic of monopolistically competitive firms.
__4__demand for a factor results from the demand for the output being
produced.
__3__the improvement in labor created by the education and knowledge
embodied in the workforce.
__2__ human-made goods such as buildings and machines used to
produce other goods and services.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. value of the marginal product; 2. time allocation; 3. marginal factor
cost of labor; 4. cost-minimization rule;
_____the value of the additional output generated by employing one
more unit of a given factor, such as labor.
_____ the decision about how many hours to spend on different
activities, which leads to a decision about how much labor to supply.
_____the additional cost of hiring an additional worker. The marginal
factor cost of land and the marginal factor cost of capital are equivalent
concepts.
_____hire factors so that the marginal product per dollar spent on each
factor is the same.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. value of the marginal product; 2. time allocation; 3. marginal factor
cost of labor; 4. cost-minimization rule;
__1__the value of the additional output generated by employing one
more unit of a given factor, such as labor.
__2__ the decision about how many hours to spend on different
activities, which leads to a decision about how much labor to supply.
__3__the additional cost of hiring an additional worker. The marginal
factor cost of land and the marginal factor cost of capital are equivalent
concepts.
__4__hire factors so that the marginal product per dollar spent on each
factor is the same.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. Compensating differentials; 2. marginal social benefit of pollution;
3. socially optimal quantity of pollution; 4. externalities;
_____A consequence of an economic activity that is experienced by
unrelated third parties.
_____the quantity of pollution that society would choose if all the costs
and benefits of pollution were fully accounted for.
_____the additional gain to society as a whole from an additional unit of
pollution.
_____wage differences across jobs that reflect the fact that some jobs
are less pleasant or more dangerous than others.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. Compensating differentials; 2. marginal social benefit of pollution;
3. socially optimal quantity of pollution; 4. externalities;
__4__A consequence of an economic activity that is experienced by
unrelated third parties.
__3__the quantity of pollution that society would choose if all the costs
and benefits of pollution were fully accounted for.
__2__the additional gain to society as a whole from an additional unit of
pollution.
__1__wage differences across jobs that reflect the fact that some jobs
are less pleasant or more dangerous than others.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. positive externalities; 2. Coase Theorem; 3. emissions taxes;
4. tradable emissions permits;
_____the proposition that even in the presence of externalities an
economy can always reach an efficient solution as long as transaction
costs are sufficiently low.
____a tax that depends on the amount of pollution a firm produces.
_____a benefit transferred, or a positive "spill-over", to a party that was
not a part of the original transaction or decision making process.
_____licenses to emit limited quantities of pollutants that can be bought
and sold by polluters.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. positive externalities; 2. Coase Theorem; 3. emissions taxes;
4. tradable emissions permits;
__2__the proposition that even in the presence of externalities an
economy can always reach an efficient solution as long as transaction
costs are sufficiently low.
__3__a tax that depends on the amount of pollution a firm produces.
__1__a benefit transferred, or a positive "spill-over", to a party that was
not a part of the original transaction or decision making process.
__4__licenses to emit limited quantities of pollutants that can be bought
and sold by polluters.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. marginal social benefit of a good; 2. Pigouvian subsidy; 3. marginal social
cost of a good; 4. private good;
_____the marginal cost of production plus the marginal external cost.
_____the marginal benefit that accrues to consumers plus the marginal
external benefit.
_____a good that is both excludable and rival in consumption.
_____a payment designed to encourage activities that yield external
benefits.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. marginal social benefit of a good; 2. Pigouvian subsidy; 3. marginal social
cost of a good; 4. private good;
__3__the marginal cost of production plus the marginal external cost.
__1__the marginal benefit that accrues to consumers plus the marginal
external benefit.
__4__a good that is both excludable and rival in consumption.
__2__a payment designed to encourage activities that yield external
benefits.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. nonexcludable; 2. nonrival in consumption; 3. public good; 4. Gini
coefficient;
_____referring to a good, describes the case in which the same unit can
be consumed by more than one person at the same time.
_____a number that summarizes a country’s level of income inequality
based on how unequally income is distributed across the quintiles.
_____a good that is both nonexcludable and nonrival in consumption.
_____referring to a good, describes the case in which the supplier cannot
prevent those who do not pay from consuming the good.
Mr.
Weiss
Test 3 – Sections 11, 12, 13 & 14– Vocabulary Review
1. nonexcludable; 2. nonrival in consumption; 3. public good; 4. Gini
coefficient;
__2__referring to a good, describes the case in which the same unit can
be consumed by more than one person at the same time.
__4__a number that summarizes a country’s level of income inequality
based on how unequally income is distributed across the quintiles.
__3__a good that is both nonexcludable and nonrival in consumption.
__1__referring to a good, describes the case in which the supplier cannot
prevent those who do not pay from consuming the good.