Class 5 Slides

Question 1

The Firm

Answer 1

Question 2

Opportunity Cost

Answer 2

Question 3

Firm’s Own Use of Capital

Answer 3

Question 4

Opportunity Cost

Answer 4

Question 5

The Production Function

Answer 5

Question 6

Production Function Example

Answer 6

Question 7

Marginal Products of Labor and Capital

Answer 7

Question 8

Marginal Product Example

Answer 8

Question 9

Short Run vs Long Run

Answer 9

Question 10

Production Costs

Answer 10

Question 11

Cost Minimization

Answer 11

Question 12

Takeaways regarding cost minimization

Answer 12

Question 13

Cost Function

Answer 13

Question 14

Variable vs Fixed Cost

Answer 14

Question 15

Short-run vs Long-run Costs

Answer 15

Question 16

Average costs

Answer 16

Question 17

Profit maximization

Answer 17

Question 18

Two views of profit maximization

Answer 18

Question 19

How is profit maximized?

Answer 19

Question 20

When is profit maximized?

Answer 20

Question 21

Supply curve

Answer 21

Question 22

Supply curve vs average variable cost curve

Answer 22

Question 23

Role of fixed costs in long-term

Answer 23

Question 24

When does marginal cost curve cross the average cost curve?

Answer 24

Question 25

How does a demand shock affect the market?

Answer 25

Question 26

Entry, Exit, and Long-Run Economic Profit Takeaways

Answer 26

Question 27

Monopolist supply curve

Answer 27

Question 28

What price does a monopolist choose?

Answer 28

Question 29

Monopolists marginal revenue curve

Answer 29

Question 30

How monopolists maximize profits

Answer 30

Question 31

Welfare

Answer 31

Question 32

Monopolist takeaways

Answer 32

Question 33

Monopolistic competition

Answer 33

Question 34

How do firms earn profits in monopolistic competition?

Answer 34

Question 35

What happens to demand when firms steal market share

Answer 35

Question 36

What happens when a monopolistic competitive firm earns profits?

Answer 36

Question 37

Key takeaways of monopolistic competition

Answer 37