Micro Econ Flashcards
Progressive tax
imposes a higher percentage rate of taxation on those with higher income
Regressive tax
which imposes a higher percentage rate of taxation on low incomes than on high incomes. For example, if the state sales tax were 5%, the person with the lower income would pay a greater percentage of their total income in sales tax.
Proportional tax
imposes the same percentage of taxation on everyone, regardless of income. income tax
perfect competition
very many firms identical products no barriers to entry price taker no nonprice competition highly efficient long run: normal profit agriculture-does not exist
monopolistic competition
many firms differentiated products few barriers little price setting power many nonprice competition not as efficient as PC no long run profit
fast food, retail
oligopoly
few firms differentiated not easy entry some price setting power little nonprice competition not as efficient as PC yes: long run profit
cars, cereal
COLLUSION
monopoly
one firm one of a kind product absolute barrier price setter some nonprice competition inefficient high long run profit
rural gas
technical monopoly
patent/copyright
natural monopoly
watertreatment facility, public, little money, price regulated by gov
government monopoly
gov owned or has a license
post office
normal profit
enough to cover all cost
econ profit
cover all cost with left over
allocative efficiency
producing as much as they can to meet needs of society w/o losing money
productive efficency
producing at lowest possible price
Perfect competition graph
industry graph: demand supply (price/quantity)
ATC on top of AVC
straight mr
profit in pc
profit maximizing point straight down to ATC
profit maximizing point
MC= MR
long run PC
more ppl go in n supply increase which lowers price/MR
MR
largest amt of money you make
PC short run econ profit
MR on top of ATC/AVC
PC short run loss
MR in the middle
PC short run, shut down
touches the bottom one/ AVC
PC normal profit
touches top one ATC
Fixed cost
doesnt change w/ amt of output, space btw ATC n AVC
rent
total cost
fixed + variable cost
marginal cost
cost of producing one more unit
PC econ profit to long run
industry graph
increase in supply
PC normal to loss
industry graph decrease in supply
Monopoly
ATC below alllocatively efficient point
proft max straight up to demand= unregulated price/quantuy
profit: Atc to demand
Monopoly
allocatively efficient point
MC= D
imperfect competitor
price is always lower than mr
profit
Revenue-cost
deadweight Monopoly
triangle next to profit
loss to society
increase deadweight= decrease surplus
Consumer surplus
triangle top of profit
ppl expect to pay more but the price is actually lower
consumer+ producer= total surplus
Monopoly highest of point of total revenue
MR=0
Max total rev: straight up to Demand
inelastic Monopoly
price decrease
total revenue decrease
right
elastic Monopoly
decrease price,
total revenueincrease
left
Monopoly supply curve
on MC, above ATC
single price monopolist
change price for spec condition
like movie/plane tickets
monopolistic competition
long run
profit maximizing point up to demand. ATC touches
normal profit
monopolistic competition short run
same as monopoly
profit: D to atc
monopolistic competition lost
ATC abov demand
Extranality
something that affects a person that has nothing to do w/ making the product or using it.
cost that firm pays is external, not on balance sheet
sole proprietorship
one person owns it most common limited life unlimited liability difficult to raise money
patnership
more than one owner accounting, lawyer, doctor least common unlimited liability limited life easier to raise money than propri
coporation
raise money by selling stocks unlimted life limited liability owners have little control double taxation (coportate n personal income) dividend: periodic paycheck
public goods
paid for by tax
nonexcludable (nothing prevents usage
nonrival (everyone can use at the smae time)
common goods
nonexcludable
rivals
(fish/water source
total revenue- monopoly
profit rectanle extended down
negative externalities
cost push
P/Q graph
D= marginal profit
S= marginal cost
decrease in supply
postive externailities
demand pull
D= marginal benefits
