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Micro Econ Final Flashcards

(70 cards)

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1
Q

Long Run

A

factors of production are variable

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2
Q

total costs

A

Fixed costs +variable costs

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3
Q

total revenue

A

price x quantity

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4
Q

Demand determinants

A 
Income
expectation
preference
demographics
price of related goods
distribution
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5
Q

shortage

A

When demand is higher than supply

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6
Q

Surplus

A

Quantity demand is greater than supply

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7
Q

the law of increasing costs

A

as the economies production of a product increases the per unit cost of production rises

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8
Q

Normal profits

A

the minimum amount of profits that are earned to keep the business running

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9
Q

fair return price

A

a price that guarantees a firm will make normal profits only

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10
Q

fair return on the graph

A

where Average costs intersect Demand

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11
Q

socially optimum price

A

the price that produces the best allocation of resources

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12
Q

socially optimum price on the graph

A

Where marginal costs intersect Demand

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13
Q

Marginal Revenue

A

the extra revenue derived from the sale of one or more units

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14
Q

monopolist profit maximization

A

when marginal cost equals marginal revenue

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15
Q

the output on the graph

A

where Marginal Cost intersects with Marginal revenue

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16
Q

what factors distinguish an oligopoly

A
  • few competitors
  • advertising
  • sell similar products
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17
Q

what price does a monopolistically competitive firm charge?

A

price greater than marginal cost

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18
Q

short run

A

a period of time in which factors are fixed

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19
Q

Profit-maximizing output on a graph

A

Where MR and MC intersects, the price is found by drawing a line to the demand curve

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20
Q

Break-even on a graph

A

Where MR and ATC intersects

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21
Q

average profit

A

total profit divided by quantity

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22
Q

total profit

A

the difference between AR and AC times the output

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23
Q

Economic capacity

A

lowest average total cost

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24
Q

point of maximum productivity

A

Lowest average cost

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25
Point of diminishing returns
lowest marginal cost
26
socially optimum price
the price which ensures the best allocation of products
27
monopolistic competition
the term for a market structure in which there are many firms who sell a different product and have some control over the price of the product they sell
28
what is profit maximization criteria for a monopolistic firm
Marginal revenue equals marginal cost
29
horizontal demand curve
elastic demand
30
verticle demand curve
perfectly inelastic
31
verticle supply curve
perfectly inelastic
32
horizontal supply curve
perfectly elastic supply
33
unitary elastic
the point where percentage change in quantity is exactly equal to the percentage change in price
34
unitary elastic coefficient
1
35
unitary elastic curve
a curved line, C shaped
36
cross elasticity of demand
how the quantity demanded of product A responds to a change in the price of product B
37
perfectly inelastic
price change doesn't affect demand, for example, electricity, gas, water
38
perfectly elastic
price change affects quantity demanded.example pizza, restaurants
39
Perfectly elastic coefficient
∞
40
perfectly inelastic coefficient
0
41
consumer surplus
the difference between what a customer is willing to pay and the actual price of the product
42
the marginal rate of substitution
the amount of one good a consumer is willing to give up to get more one unit of another good and still maintain the same level of satisfaction.
43
the marginal rate of substitution
the amount of one good a consumer is willing to give up to get more one unit of another good and still maintain the same level of satisfaction.
44
excess capacity
the situation in which a firms output is below economic capacity
45
constant return to scale
a firms output increases by the same percentage as the increase in its inputs
46
increasing returns to scale
a firms output increases by a greater percentage than the increase in its inputs
47
economies of scale
coat advantage achieved as a result of larger scale operations
48
decreasing return to scale
a situation in which a firms output increases by a smaller percentage than the increase to its inputs
49
many firms
perfect competition | monopolistic competition
50
few firms
differentiated oligopoly | undifferentiated oligopoly
51
one firm
monopoly
52
perfect competition
a market in which buyers and sellers are price takers
53
economic profit on a curve
where TR and TC has the greatest distance from each other
54
shutdown price
the price that is just sufficient to cover a firm's variable costs
55
market failure
the defect in competitive markets that prevent them from achieving an efficient or equitable allocation pf resources
56
imperfect competition
a market in which producers are identifiable and have some control over price
57
monopolistic competition
a market in which there are many firms that sell a differentiated product
58
nash equilibrium
a situation in where each rival chooses the best actions given the anticipated actions of the others
59
marginal wage cost
the extra cost of hiring an additional employee
60
common property resources
resources not owned by an individual or firm
61
terms of trade
the average price of a countries exports compared with the price of its imports
62
4 resources in the production of goods
land labour entrepreneurship capital
63
when is the percentage change in quantity exactly equal to the percentage change in price
when the demand is unitary elastic
64
The coefficient is greater than 1
elastic
65
why might a good harvest be bad news for farmers
because the demand for many basic agricultural products is very inelastic
66
implicit costs
costs that are not actually paid out in money
67
what do economists consider the true costs of doing business
explicit costs plus implicit costs
68
what causes marginal costs to rise
the fact that ATC increases
69
what is the long run average cost curve
graphic representation of the average cost of production in the long run
70
inferior good
a product which demand falls if income rise

Human Resources (2 decks)

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