Final

Question 1

The study of how society chooses to allocate its scarce resources in order to satisfy unlimited wants and needs

Answer 1

Economics

Question 2

The branch of economics that studies decision-making for the economy as a whole

Answer 2

Macroeconomics

Question 3

The branch of economics that studies decision-making by a single individual, household, firm, industry, or government

Answer 3

Microeconomics

Question 4

What you gave up when a decision was made

Answer 4

Opportunity Cost

Question 5

Additional satisfaction received when you buy one more

Answer 5

Marginal Utility

Question 6

The additional satisfaction decreases the more and more you consume

Answer 6

Diminishing Marginal Utility

Question 7

• Land
• Labor
• Capital

Answer 7

• Natural Resource
• Human Capital
• Machine Tools

Question 8

• Land payment
• Labor payment
• Capital payment

Answer 8

• Rent
• Wages
• Interest

Question 9

There is an inverse relationship between the price of a good and a quantity buyers are willing
To purchase in a defined time period, ceteris paribus

Answer 9

Law of Demand

Question 10

Total amount of GPD produced at various price levels, quaintly supply goes up

Answer 10

Law of Supply

Question 11

Legally established minimum price that someone can be paid

Answer 11

Price Floor-surpluses

Question 12

Legally established maximum price that can be charged

Answer 12

Price Ceiling-shortages

Question 13

A cost or benefit imposed on people other than the consumers and producers of a good or service. (third parties)

Answer 13

Externality

Question 14

An externality that is detrimental to third parties, pollution

Answer 14

Negative

Question 15

An externality that is beneficial to third parties , vaccinations

Answer 15

Positive

Question 16

The responsiveness or sensitivity, to a change in price

Answer 16

Elasticity

Question 17

The ratio of the percentage change in the quantity demanded of a product to a percentage change in its price

Answer 17

Elasticity

Question 18

Percentage change in quantity demanded/percentage change in price

Answer 18

Elasticity Coefficient (Ed)

Question 19

Condition in which the percentage change in quantity demanded is greater than percentage change in price. What kind of curve?

Answer 19

Elastic- downward curve

Question 20

The percentage change in the quantity demanded is less than the percentage change in price. What kind of curve?

Answer 20

Inelastic- more vertical downward curve

Question 21

An extreme condition in which a small percentage change in price brings about an infinite percentage change in quantity demanded. What kind of curve?

Answer 21

Perfectly Elastic- horizontal demand curve

Question 22

Another extreme condition in which the quantity demanded does not change as the price changes. What kind of curve?

Answer 22

Perfectly Inelastic- vertical demand curve

Question 23

What happens to TR when prices changes in different ranges of elasticity?

Answer 23

Total Revenue does not change when price increases-unitary elastic

Question 24

Inverse relationship between price and total revenue

Answer 24

Demand is elastic

Question 25

Direct relationship between price and total revenue

Answer 25

Demand is inelastic

Question 26

Beyond a certain point the additional production gain decreases as a variable resource increases

Answer 26

Diminishing Returns to Scale

Question 27

As output increases, long run average Total cost decreases (cheaper)

Answer 27

Economies of Scale

Question 28

Long-run average total cost is what?

Answer 28

Economies and Diseconomies of Scale

Question 29

A period of time so long that all inputs are variables

Answer 29

Long run

Question 30

Homogenous product, many small competing firms, very easy to exit and entry

Answer 30

Perfect Competition

Question 31

One single seller, unique product, impossible to enter

Answer 31

Pure Monopoly

Question 32

What are barriers to entry?

Answer 32

Ownership of a vital resource, legal barriers, economies of scale

Question 33

Many smaller sellers, differentiated product, very easy entry/exit

Answer 33

Monopolistic Competition

Question 34

A few large sellers, either homogenous/differentiated products, very difficult entry/exit, kinked demand curve/mutual interdependence, price leadership

Answer 34

Oligopoly

Question 35

Dominant firm who sets price, other firms follow

Answer 35

Price Leadership (Oligopoly)

Question 36

illegal formal collusion//not allowed in the United States

Answer 36

Cartels (Oligopoly)

Question 37

What is the purpose of antitrust laws?

Answer 37

Promoting competition and limiting monopoly power

Question 38

One firm merging with the other firm in the same industry

Answer 38

Horizontal Merger

Question 39

A merger of a firm with its suppliers

Answer 39

Vertical Merger

Question 40

Two completely different industries merging together

Answer 40

Conglomerate Merger

Question 41

Having a monopoly is not illegal unless you use anticompetitive practices

Answer 41

Rule of Reason

Question 42

If you have monopoly-it is illegal, regardless

Answer 42

Per Se Rule

Question 43

A combination or cartel consisting of firms that place their assets in the custody of a board of trustees..

Answer 43

Trust

Question 44

What was used a lot before its regulation came into play

Answer 44

Predatory Pricing

Question 45

What was the most efficient way to regulate a natural monopoly, compromise on fair return price

Answer 45

Marginal Cost Pricing