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BEC > Microeconomics > Flashcards

Microeconomics Flashcards

0
Q

D= b +m(a) b is the

A

B is the intercept

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1
Q

The intercept is the value of the

A

Dependent variable at the lowest value of the independent variable

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2
Q

In a free market economy

A

Government regulation and commerce is the least significant factor

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3
Q

Labor. Capital and natural resources are all

A

Economic resources

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4
Q

Under any economic system all economic resources are

A

Scarce

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5
Q

Increase on the income of market participants causes

A

The demand curve to shift outward

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6
Q

A reduction in price will not cause a

A

Reduction in price commodity

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7
Q

An increase in demand causes a

A

Shift of the demand curve

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8
Q

When the cost of input factors to the production increases. The supply curve shifts

A

The supply curve will shift inward

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9
Q

A shift in the supply curve inward will cause

A

The same quantity to be provided at a higher price

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10
Q

A factor that would not cause an increase in the supply curve is

A

Ah increase in the price of the commodity

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11
Q

If the price for a good if fixed by government fiat below market equilibrium price

A

Excess demand

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12
Q

A price ceiling will cause a

A

Shortage of supply and excess of demand

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13
Q

Percentage change in supply is greater than price supply

A

Is elastic

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14
Q

Elasticity of demand measures the percentage change in quantity of a commodity demanded as result of a

A

Given percentage change in price of a commodity

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15
Q

A high price elasticity of demand example

A

There are many substitutes

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16
Q

Percentage change less than 1 is

A

In elastic

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17
Q

Percentage change is equal to 1 is

A

Unitary

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18
Q

Percentage change is greater than 1 is

A

Elastic

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19
Q

Price elasticity equation

A

Percent change in quantity / percent change in price

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20
Q

When the Total utility is maximized the marginal utility of the last dollar spent on each and every item acquired

A

Must be the same

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21
Q

Equation for utility is

A

Utils/price = Utils/price

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22
Q

As an individual acquires or consumes more units of a commodity the total utility

A

Increases and the marginal utility decreases

23
Q

If output increases lesser than inputs there are

A

Decreasing returns to scale

24
Q

Diminishing returns is when

A

One input is fixed

25
Q

In the long run analysis assumes that all

A

Inputs are varied

26
Q

The extent of competition in the market is central to determining

A

The nature of market structure

27
Q

When the market price is less than average variable cost the firm should

A

Cease to produce and exit the market

28
Q

In a perfectly competitive market the demand curve is

A

Horizontal

29
Q

In perfect competition price equals

A

Marginal revenue

30
Q

In a perfect competition firms can

A

Easily enter or leave the market

31
Q

In a natural monopoly it is a condition where there are

A

Increasing returns to scale

32
Q

A monopolistic firm that maximizes revenue uses it’s resources

A

Inefficiently and at higher price then perfect competition

33
Q

In a monopolistic competition there are the following characteristics

A

Product or service is slightly differentiated
Large number of sellers
Close substitutes for the product or service
Ease of entry into or exit from market

34
Q

Monopolistic competition is maximized when

A

Marginal revenue = marginal cost

35
Q

Collusive pricing

A

Firms conspire to set the price at which a good or service will be provided

36
Q

Goods or services offered at different prices in different markets or market segments is

A

Dual pricing

37
Q

Setting of prices low in an attempt to eliminate the competition

A

Predatory pricing

38
Q

A group of firms that conspire to make price and output decisions

A

A cartel

39
Q

An oligopoly has

A

Few sellers

40
Q

Price leadership is

A

Tacit collusion

41
Q

A firm is not assured to make a profit in the short run for

A

Perfect competition. Monopolistic competition, oligopoly, pure monopoly

42
Q

Perfect competition is not a market found in the

A

US

43
Q

Increases in a demand curve are results of

A

Shifts

44
Q

Increases in demand shifts

A

Outward

45
Q

Shifts in the supply curve to the left is

A

Inward (closer to y axis)

46
Q

A higher equilibrium is caused by an

A

Increase in demand

47
Q

When demand is elastic the percentage change in demand is greater than the percentage change in

A

Price

48
Q

According to the law of diminishing returns the marginal product (output) falls as more units of a

A

Variable input are added to fixed inputs

49
Q

Characteristics of perfect competition are

A

A large number of independent buyers and sellers who is too small to affect price

Homogenous product or service

Resources are completely mobile

Perfect info

Govt does not set prices

50
Q

In a perfectly competitive market in the short run MR =

A

MC

51
Q

A firm should cease to exist in perfect competition when price is less than

A

Average variable cost

52
Q

Price is what in perfect competition

A

Marginal revenue

53
Q

Mr is less than atc but greater than avc firm is covering variable cost and contributions to fixed cost but not

A

Making a profit

54
Q

If mr is less than vac the firm is not coveting variable cost and there is a

A

Loss with every unit produced

55
Q

In a perfect monopoly marginal revenue is belw demand because it has to

A

Lower the price to sell more units

BEC (10 decks)

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