Quiz #5 Vocab

Question 0

Time period in which all resources are variable and can be changed

Answer 0

Long run

Question 1

Time period in which some resources or inputs cannot be changed (size or scale of the firm remains fixed)

Answer 1

Short run

Question 2

Increased size of the firm enables efficiency such that long run average total cost falls

Answer 2

Economies of scale

Question 3

A doubling of inputs results in a more than doubling of output

Answer 3

Increasing returns to scale

Question 4

A doubling of inputs results in a less than doubling of output

Answer 4

Decreasing returns to scale

Question 5

A doubling of inputs results in a doubling of output

Answer 5

Constant returns to scale

Question 6

When revenue exceeds cost; considered positive when firms earn a normal profit

Answer 6

Accounting profit

Question 7

When accounting profit is above and beyond when could be earned elsewhere with the same resources

Answer 7

Economic profit

Question 8

When profit is positive but competitive, i.e. Not greater than I could be in an alternative use of the same resources

Answer 8

Normal profit

Question 9

Firms charge each consumer the maximum price they are willing to pay; MR curve become D curve, no consumer surplus

Answer 9

Perfect price discrimination (first degree)

Question 10

The amount of power or influence one firm has over the price of their good

Answer 10

Market power

Question 11

In the game theory this is the choice in which the player is better off regardless of what the other player does

Answer 11

Dominant strategy

Question 12

A game theory equilibrium in which the outcome is the best both players can do given what the other does and from which there is no reason or incentive to deviate

Answer 12

Nash equilibrium

Question 13

As more unit of variable input are added to a fixed resource the amount it adds to total output diminished

Answer 13

Diminishing marginal returns