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Economics 202 > ECON Final Exam > Flashcards

ECON Final Exam Flashcards

1
Q

Pure monopoly characteristics

A

of firms, type of products, barriers to entry, control over price, role of non-price competition

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2
Q

Pure monopoly # of firms

A

just 1 firm; the firm is the industry

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3
Q

Pure monopoly type of product

A

unique; no close substitutes

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4
Q

Pure monopoly barriers to entry

A

quite high barriers, 4 types

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5
Q

4 types of barriers to entry in a pure monopoly

A

Legal (erected by govt): patents, copyrights, franchises
Exclusive control of an important input: ALCOA, DeBeers
Network Externalities
Economies of Scale

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6
Q

Pure Monopoly control over price

A

the firm is a price maker

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7
Q

Pure monopoly role of non-price competition

A

is present. Product promotion, and product development

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8
Q

Single-Price Monopoly

A

all units sold in any time period, sell for the same price

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9
Q

2 Types of mergers

A

horizontal

vertical

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10
Q

Guidelines for mergers

A

market must be defined
measurement of concentration (compute HHI)
Merger standards

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11
Q

Herfindahl-Hirschman Index (HHI)

A

in a monopoly, HHI=100^2=10,000
in a duopoly, HHI=50^2=5,000
Take share % of sales and square it, add all up to get total HHI

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12
Q

HHI < 1,500

A

merger is approved

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13
Q

1,500 < HHI < 2,500

A

might try to block

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14
Q

If HHI increased by less than 100

A

no challenge, let it go

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15
Q

If HHI increased by more than 100

A

may be a challenge

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16
Q

HHI > 2,500

A

if increased by less than 100, no challenge. If increased by between 100 - 200, may challenge. If increased by more than 200, will challenge.

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17
Q

Monopolistic Competition # of firms

A

a large #, but less than in # in perfect competition

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18
Q

Monopolistic Competition Type of Product

A

Differentiated - similar but not identical

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19
Q

Monopolistic Competition Barriers to Entry

A

Low, not difficult to get into

20
Q

Monopolistic Competition Control Over Price

A

not much

21
Q

Monopolistic Competition Role of Non-Price Competition

A

is present

22
Q

Oligopoly # of Firms

A

a few firms are dominate, although there may be competitive fringe

23
Q

Oligopoly Type of Product

A

may be standardized (steel, aluminum) or may be differentiated (Cars)

24
Q

Oligopoly Barriers to Entry

A

tend to be high, hard to get into

25
Q

Oligopoly Control Over Price

A

there is less control than one might expect

26
Q

Oligopoly Role of Non-Price Competition

A

tends to be significant

27
Q

Game Theory

A

an analytical tool used in situations where players competing in certain playoffs must consider the reactions of other players in making decisions

28
Q

Dominant Strategy

A

pursue it no matter what the other guy does

29
Q

Nash Equilibrium

A

when each player is doing the best they can, given what the others are doing

30
Q

Marginal Revenue Product (MRP)

A

the additional revenue resulting from the employment of another worker. MRP= change in TR/change in L or MRP=PxMP

31
Q

Shifters of the Market Demand of Labor

A

Human capital, better technology, larger quantity of capital, changes in product price, number of buyers

32
Q

Leisure has an opportunity cost of

A

the wage

33
Q

An increase in the wage will induce

A

the substitute of work for leisure

34
Q

Due to income effect, and assuming leisure is a normal good,

A

individuals will want more leisure (less work)

35
Q

Shifters in Market Supply of Labor

A

Population(# of sellers, immigration), Demographics(baby boomers, participation rate of women), other employment alternatives

36
Q

3 additional factors

A

Compensating Differentials
Discrimination
Labor unions

37
Q

Compensating Differentials

A

Compensating for the nastyness or dirtyness of the job

38
Q

2 types of Discrimination

A

Economic Discrimination

Statistical Discrimination

39
Q

Economic descrimination

A

racism, sexism

40
Q

Statistical Discrimination

A

Experience
Education
Job Preferences

41
Q

Monopsony

A

one buyer

42
Q

MFC=

A

change in TC/ change in L

43
Q

P=

A

Price of the product

44
Q

TR=

A

PxQ

45
Q

TC=

A

Wage of Labor + 5

46
Q

MP=

A

change in Q/ change in L

47
Q

EP=

A

TR-TC

Economics 202 (2 decks)

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