the
Profit=
implicit and explicit costs
A trade between buyer and seller is efficient if:
The trade leaves at least one party better off and no one else worse off
The tendency to react subjectively more strongly to losses than to gains of objectively equal size
Loss aversion
Chuck E Cheese pays 10% higher wages in 2024 and saw construction costs for new locations increase by 24%. Which cost(s) impact the short run plan?
Wages
According to Behavioral Economics human choice is what?
Emotional, impulsive, and mistaken sometimes
The assumption that people make full use of all available information in calculating how best to meet their objectives
Full rationality (rational choice)
Say you spend time and money to petition local politicians to not route a pipeline through your acreage. This is an example of :
Rent-seeking with political aspect
Which market structure has all of the firms gets the same amount of information?
Perfect Competition
Chuck E Cheese buys a new building for $250,000, then pays $2500 to paint the logo on the outside wall. Building retains value and and logo is only valuable to the company. What would be the sunk cost for the new location?
A. $250k
B. $252,500
C. $0
D$2500
D. $2500
Any payment to a factor of production in excess of its opportunity cost is called
What is Economic Rent?
in perfect competition MR= what?
MR=P
Although many firms attempt to maximize profit, studies state that they also:
Support the arts or the homeless and build empires
Why is the demand for product in perfect competition perfectly elastic?
Firms cannot influence market price
Accounting costs do not include what?
Owners opportunity costs of capital used in production (implicit costs)
What is scarcity?
They are losing money and need to shut down
You go to Pizza Hut and have $10 to spend. Pizza is $2 and lemonade is $1. The decision to decide how many of which item to get will use what economic principle?
Diminishing marginal utility of product
What happens on Oct 30th?
Dress up= 5 EC points
The assumption people intend to make choices that best serve their objectives, but have limited ability to acquire and process information
Bounded rationality
Oligopoly Market structures can have issues with what?
What is cartels and collusion?
If MR= MC what does that mean for the firm?
It is maximizing its profits
According to diminishing marginal utility, what will happen when you consume another unit of a good?
satisfaction per unit will decrease
You decide to listen to your friends opinion on a SUV than search for its rating in consumer reports. This is an example of :
Bounded rationality
Accounting profit = revenue-explicit costs
Accounting profit= revenue-explicit and implicit costs
Accounting profit= revenue + explicit and implicit costs
AP=R-EC
A market structure where there are barriers to entry, one or very few firms who can control the price.
What is Monopoly?