Chapter 9, 10, 11

Question 0

Implicit Costs

Answer 0

Opportunity costs

Question 1

Explicit Costs

Answer 1

Cash transactions–food, workers, facilities

Question 2

Accounting profit

Answer 2

Total explicit costs-total sales revenue

$0 is a profit because you broke through!

Question 3

Normal profit

Answer 3

Typcial amount of accounting profit earned—$0

Question 4

Economic profit

Answer 4

Revenue-explicit-implicit

Question 5

TP

Answer 5

total product, quantity, output

Question 6

MP

Answer 6

extra output

change in total product/change in labor input

Question 7

AP

Answer 7

total product/units of labor

Question 8

Law of diminishing returns

Answer 8

less and less benefit with each worker after a certain point c

Question 9

Marginal product intersects average product at

Answer 9

the maximum of average product

Question 10

Marginal cost intersects average cost at

Answer 10

the minimum because once the cost is above the average, the average will go up

Question 11

MC intersects AC at

Answer 11

minimum

Question 12

TC increases because of

Answer 12

the law of diminishing returns

Question 13

ATC=

Answer 13

AVC+AFC

Question 14

The greatest profit is when

Answer 14

the slope of TC and TR are the same

Question 15

Perfect competition

Answer 15

• many firms
• standard product
• price takers
• easy entry and exit

Question 16

Profit maximizing

Answer 16

in the short run, firms are price takers so they will produce where mr=mc

Question 17

the shut down point is the

Answer 17

minimum of the AVC

Question 18

If the price is above the ATC

Answer 18

profit

Question 19

If the price is at the ATC

Answer 19

0 profit

Question 20

If the price is below the ATC

Answer 20

loss

Question 21

IN THE SHORT RUN FIRMS WILL PRODUCE WHERE

Answer 21

MR=MC

Question 22

Long run

Answer 22

all costs are variable and there is easy entry and exit

Question 23

Long run equilibrium

Answer 23

No more firms will enter or exit and Mr. Darp will intersect the ATC minimum

Question 24

Productive efficiency

Answer 24

producing at the minimum ATC

Question 25

Allocative efficiency

Answer 25

P=MC

Question 26

Perfectly competitive firm is

Answer 26

productively efficient and allocatively efficient

Question 27

Socially optimal

Answer 27

MC=price or demand

Question 28

Determining elasticity on a graph

Answer 28

Left of where MR intersects the x axis is elastic, where it intersects is unit elastic and right is inelastic

Question 29

Perfect price discrimination is when

Answer 29

MR=D