Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Principles of Microeconomics > Final Exam > Flashcards

Final Exam Flashcards

1
Q

a market structure with many firms selling products that are substitutes but different enough that each firm’s demand curve slopes downward; firm entry is relatively easy

A

monopolistic competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

the difference between a firm’s profit-maximizing quantity and the quantity that minimizes average cost; firms with excess capacity could reduce average cost by increasing quantity

A

excess capacity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

a market structure characterized by so few firms that each behaves interdependently

A

oligopoly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

an oligopoly that sells a commodity, or a product that does not differ across suppliers, such as an ingot of steel or a barrel of oil

A

undifferentiated oligopoly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

an oligopoly that sells products that differ across suppliers, such as automobiles or breakfast cereal

A

differentiated oligopoly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

an agreement among firms to increase economic profit by dividing the market and fixing the price

A

collusion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

a group of firms that agree to coordinate their production and pricing decisions to earn monopoly profit

A

cartel

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

a firm whose price is matched by other firms in the market as a form of tacit collusion

A

price leader

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

an approach that analyzes oligopolistic behavior as a series of strategic moves and countermoves by rival firms

A

game theory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

a game that shows why players have difficulty cooperating even though they would benefit from cooperation

A

prisoner’s dilemma

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

in game theory, the operational plan pursued by a player

A

strategy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

in game theory, a table listing the payoffs that each player can expect from each move based on the actions of the other player

A

payoff matrix

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

in game theory, the outcome achieved when each player’s choice does not depend on what the other player does

A

dominant-strategy equilibrium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

a market with only two producers; a special type of oligopoly market structure

A

duopoly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

a situation in which a firm, or a player in game theory, chooses the best strategy given the strategies chosen by others; no participant can improve his or her outcome by changing strategies evan after learning of the strategies selected by other participants

A

Nash equilibrium

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

in game theory, a strategy in repeated games when a player in one round of the game mimics the other player’s behavior in the previous round; an optimal strategy for getting the other player to cooperate

A

tit-for-tat

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

a type of game in which a Nash equilibrium occurs when each player chooses the same strategy; neither player can do better than matching the other player’s strategy

A

coordination game

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

the expansion of a firm into stages of production earlier or later than those in which it specializes, such as a steel maker that also mines iron ore

A

vertical integration

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

a firm buys inputs from outside suppliers

A

outsourcing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

area of specialty; the product or phrase of production a firm supplies with greatest efficiency

A

core competency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

the notion that there is a limit to the information that a firm’s manager can comprehend and act on

A

bounded rationality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

average costs decline as a firm make a range of different products rather than specializes in just one product

A

economies of scope

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

the plight of the winning bidder who overestimates an asset’s true value

A

winner’s curse

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

one side of the market has better information about the product than does the other side

A

asymmetric information

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

one side of the market knows more than the other side about product characteristics that are important to the other side

A

hidden characteristics

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

those on the informed side of the market self-select in a way that harms those on the uninformed side of the market

A

adverse selection

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

one side of an economic relationship can do something that the other side cannot observe

A

hidden actions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

the agent’s objectives differ from those of the principal’s, and one side can pursue hidden actions

A

principal-agent problem

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

a person or firm who hires an agent to act on behalf of that person or firm

A

principal

30
Q

a person or firm who is supposed to act on behalf of the principal

A

agent

31
Q

a situation in which one party, as a result of a contact, has an incentive to alter their behavior in a way that harms the other party to the contract

A

moral hazard

32
Q

the idea that offering high wages attracts a more talented labor pool and encourages those hired to perform well so as to keep their jobs

A

efficiency wage theory

33
Q

using a proxy measure to communicate information about unobservable characteristics; the signal is more effective if more-productive workers find it easier to send than do less-productive workers

A

signaling

34
Q

the process used by employers to select the most qualified workers based on observable characteristics such as a job applicant’s level of education and course grades

A

screening

35
Q

an approach that borrows insights from psychology to help explain economic choices

A

behavioral economics

36
Q

a good such as ocean fish that is rival in consumption but non payers cannot be excluded easily

A

open-access good

37
Q

because a person cannot be easily excluded from consuming a public good, some people may try to reap the benefits of the good without paying for it

A

free-rider problem

38
Q

under certain conditions, the preferences of the median, or middle, voter will dominate other preferences of all other voters

A

median-voter model

39
Q

a stance adopted by voters when they realize that the cost of understanding and voting on a particular issue exceeds the benefit expected from doing so

A

rational ignorance

40
Q

legislation that involves widespread costs and widespread benefits—nearly everyone pays and nearly everyone benefits

A

traditional public-goods legislation

41
Q

legislation with concentrated benefits but widespread costs

A

special-interest legislation

42
Q

special-interest legislation with narrow geographical benefits but funded by all taxpayers

A

pork-barrel spending

43
Q

legislation with widespread benefits but concentrated costs

A

populist legislation

44
Q

legislation that confers concentrated benefits on one group by imposing concentrated costs on another group

A

competing-interest legislation

45
Q

an expression used to describe market activity that goes unreported either because it is illegal or because those involved want to evade taxes

A

underground economy

46
Q

government agencies charged with implementing legislation and financed by appropriations from legislative bodies

A

bureaus

47
Q

a resource in fixed supply, such as crude oil or coal

A

exhaustible resource

48
Q

a resource that regenerates itself and so can be used indefinitely if used conservatively, such as properly managed forest

A

renewable resource

49
Q

unrestricted access to a resource results in overuse

A

common-pool problem

50
Q

occurs when the relationship between the output rate and the generation of an externality is fixed; the only way to reduce the externality is to reduced the output

A

fixed-production technology

51
Q

the sum of the marginal private cost and the marginal external cost of production or consumption

A

marginal social cost

52
Q

occurs when the amount of externality generated at a given rate of output can be reduced by altering the production process

A

variable technology

53
Q

the sum of the marginal private benefit and the marginal external benefit of production or consumption

A

marginal social benefit

54
Q

as long as bargaining costs are low, an efficient solution to the problem of externalities is achieved by assigning property rights to one party or the other, it doesn’t matter which

A

Coase theorem

55
Q

an approach that required polluters to adopt particular technologies to reduce emissions by specific amounts; inflexible regulations based on engineering standards that ignore each firm’s unique ways of reducing pollution

A

command-and-control environmental regulations

56
Q

an approach that offers each polluter the flexibility to reduce emissions as cost-effectively as possible, given its unique cost conditions; the market for pollution rights is an example

A

economic efficiency approach

57
Q

the process of converting waste products into reusable material

A

recycling

58
Q

a curve showing the percentage of total income received by a given percentage of recipients whose incomes are arrayed from smallest to largest

A

Lorenz curve

59
Q

the middle income when all incomes are ranked form smallest to largest

A

median income

60
Q

the middle wage when wages of all workers are ranked from lowest to highest

A

median wage

61
Q

benchmark level of income computed by the federal government to track poverty over time; initially based on three times the cost of a nutritionally adequate diet

A

U.S. official poverty level

62
Q

government programs designed to help make up for lost income of people who worked buy are now retired, unemployed, or unable to work because of disability or work-related injury

A

social insurance

63
Q

social insurance program providing health insurance for short-term medical care to older Americans, regardless of income

A

Medicare

64
Q

welfare programs that provide money and in-kind assistance to the poor; benefits do not depend on prior contributions

A

income assistance programs

65
Q

a program in which, to be eligible, an individual’s income and assists must not exceed specified levels

A

means-tested program

66
Q

an income assistance program funded largely by the federal government but run by the states to provide cash transfer payments to poor families with dependent children

A

Temporary Assistance for Needy Families (TANF)

67
Q

an income assistance program the provides cash transfers to the elderly poor and the disable; a uniform federal payment is supplemented by transfers that vary access states

A

Supplemental Security Income (SSI)

68
Q

a federal program that supplements the wages of the working poor

A

earned-income tax credit

69
Q

an in-kind transfer program that provides medical care for poor people; by far the most costly welfare program

A

Medicaid

70
Q

an in-kind transfer program that offers low-income households vouchers redeemable for food; benefit levels vary inversely with household income

A

SNAP

71
Q

supplements retired income to those with a record of contributing to the program during their working years; by far the largest government redistribution program

A

Social Security

Principles of Microeconomics (2 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions