Chapter 15
Where MC=MR
What is a monopoly's profit-maximizing quantity?
Graphically, in the market for factors of production, the intersection of the quantity of labor supplied and labor demanded reflects this on the y-axis.
What are wages?
Price of basket of goods and services in current year/ price of basket in base year X 100.
How is CPI calculated?
What is physical capital?
When a firm captures all consumer surplus as profit.
What is perfect price discrimination?
Faced with tradeoffs, this cost generally increases over time proportional to workers' wages.
What is an opportunity cost?
One measures measures prices of all goods and services produced while the other measures the prices of only the goods and services bought by consumers.
What is the difference between CPI and GDP deflator?
Countries that start off poor, but tend to grow more rapidly than countries that start off rich.
What is the catch-up effect?
A firm that does not hold much influence over a market and sets their price at whatever the market gives.
What is a price taker?
Growth or decline of real wages within a country is closely reflected in this economy metric.
What is gross domestic product?
(CPI year 2 - CPI year 1)/(CPI year 1) X 100
How is the inflation rate calculated?
The benefit from an extra unit of an input declines as the quantity of the input increases.
What is diminishing returns?