11/6

Question 1

short run

Answer 1

some input is fixed ((K)apital) over some period of time so cost is fixed

Question 2

long run

Answer 2

all inputs are variable

Question 3

long run with firms

Answer 3

firms enter or exit, so there is a new equilibrium (Zero profit)

Question 4

short run with firms

Answer 4

equilibrium profit, loss

Question 5

production effiency is

Answer 5

the econ term describes level where an economy can no longer produce additional amounts of a good without lowering production level of another product

Question 6

what type of efficiency is where the firm has reached the point where you are at the minimum ATC

Answer 6

production efficiency
-only hit by perfect competition

Question 7

allocative efficiency

Answer 7

p=mc (perfect competition)

Question 8

what type of market is allocative efficiency

Answer 8

where optimal distribution if goods in a economy meets the needs and wants of society

Question 9

goal of allocative efficiency

Answer 9

ensure resources are used so that their marginal benefit to society is equal to their marginal cost

Question 10

what happens to supply when firms enter

Answer 10

more supply

Question 11

what happens to supply when firms exit

Answer 11

less supply

Question 12

process of long run supply

Answer 12

1)zero profit
2)demand goes up -> profit is greater than zero
3)entry - supply goes up
4)supply increases, price decreases
….
5)price <ATC, zero profit

Question 13

constant costs and increasing costs are

Answer 13

industries

Question 14

constant costs

Answer 14

each firm cost arent impacted by entry or exit of new firms

Question 15

increasing cost

Answer 15

production cost rise as the market expands

Question 16

constant costs are most

Answer 16

common and clearest result

Question 17

consumer sovereignty

Answer 17

the consumer has some controlling power over goods that are produced and the consumer is the best judge of their own welfare