Unit 3: Costs of Production and Perfect Competition
Unit 4: Imperfect Competition
Unit 5: Resource Market and Unit 6: Market Failures and Government Involvement
100
The science and study of scarcity.
What is Economics?
100
1. Tastes and Preferences
2. Number of Consumers
3. Price of Related Goods
4. Income
5. Future Expectations
What is the 5 Shifters of Demand?
100
MR=MC
What is the Profit Maximization Rule?
100
1. A few large producers
2. Identical or differentiated products
3. High Barriers of Entry
4. Control Over Price
5. Mutual Interdependence
6. Firms use Strategic Pricing
What is the Characteristics of an Oligopoly?
100
Unit 6
A situation in which the free-market fails to satisfy society's wants.
What is a Market Failure?
200
The most desirable second option or alternative that is given up in the result of a decision.
What is Opportunity Cost?
200
Maximum legal price a seller can charge for a product.
What is a Price Ceiling?
200
The additional cost of an additional output.
What is Marginal Cost?
200
1. Relatively Large number of sellers
2. Differentiated products
3. Little control over price
4. Easy Entry and Exit (low barriers of entry)
5. Uses Advertising
What is the Characteristics of Monopolistic Competition?
200
Unit 5
A firm that has a monopoly over all the labor in an area.
What is a Monopsony?
300
1. Change in resource quantity or quality.
2. Change in Technology
3. Change in Trade
What is the 3 Shifters of the Productions Possibilities Curve?
300
A government payment that supports a business or market; causes the supply of the good to increase.
What is a Subsidy?
300
The point at which P=AVC
What is the Shutdown Point?
300
What a monopoly is using when its MR line moves up to join its D line to become one.
What is Price Discrimination?
300
Unit 6
Something that meets these two criteria:
1. Non-exclusion
2. Shared Consumption (Non-rivalry)
What is a Public Good?
400
As you produce more of any good, the opportunity cost will increase.
What is the Law of Increasing Opportunity Cost?
400
(MUx)/(Px) = (MUy)/(Py)
What is the Utility Maximizing Rule?
400
Zero Economic Profit is being made.
What is Normal Profit?
400
ATC=D for a monopoly.
What is Fair Return?
400
Unit 6
Sales tax is an example of this kind of tax
What is a Regressive Tax?
500
What the producer with the lowest opportunity cost has.
What is Comparative Advantage?
500
The measurement of consumers' responsiveness to a change in price.
What is the Price Elasticity of Demand?
500
As variable resources (workers) are added to fixed resources (machinery, tools, etc.), the additional output produced from each new worker will eventually fall.
What is the Law of Diminishing Marginal Returns?
500
What the government should do to increase the quantity produced by a monopoly when given the option of only either taxing the monopoly or subsidizing it.
What is subsidizing?
500
Unit 5
The demand for resources is determined by the products they help produce.