Microeconomics Flashcards
What causes a shift in the S or D Curve?
Shifts are caused by a change in an independent variable other than price
Common value auction
the value of the items to be auctioned will be the same to any bidder, but the bidders do not know the value until the auction
Private Value Auction
the value that each bidder places is the value it has to them
Ascending price auction
what I think of when I think about auctions
US Treasury securitys auction type
single price auctinom but bidders may also submit a noncompetitive bid
Noncompetitive bid
such a bid indicated that the bidder will accept the amount indicated at the price determined by auction, rather that specifying a maximum price. Is an option in US security auctions
Marginal Benefit (MB)
means “demand”
Define Producer Surplus
the excess of market price above the opportunity cost of production
Marginal Cost (MC)
equals supply
Own Price Elasticity
%Qd / %price
Cross price elasticity
% Qd / %price of related
income elasticity
%Qd / % income
Marginal Cost equation
change in TC/ Change in output
Distance between ATC and AVC curve is equal to
the Average Fixed Cost
Where does the MC intersect the AVC and ATC
at the minimum points of AVC and ATC
Shape of ATC and AVC
U shaped
MC Curve above the AVC is the
firms short run supply curve
Average Total Costs is equal to
Average fixed cost plus average variable cost
The short run is defined as
the time period at which factors of production are fixed
When MC equals AVC
the firsm will shutdown in BOTH the short and long run
Breakeven point is where (perfect Comp)
Marginal cost equals average total cost
Short Run shutdown point (perfect Comp)
average revenue is less than average variable cost
Long Run shutdown point (perfect Comp)
average revenue is less than average total cost