What is the process a firm uses to turn inputs into outputs?
100
A market that meets the conditions of 1) many buyers and sellers, 2) all firms selling identical products 3) no barriers to entry
What is perfect competition?
100
Many buyers and sellers, low barriers to entry, and the goods and services are differentiated.
What are the characteristics of monopolistic competition?
100
Firms in the market structure often rely on game theory to make strategic decisions.
What is an oligopoly?
100
Narrowly defined, these firms can ignore the actions of all other firms.
What is a monopoly?
200
Technological change
What is a change in the ability of a firm to produce a given level of output with a given level of input?
200
These firms can sell as much as they want at the current market price, but cannot sell anything at all if they raise the price.
What are firms in perfectly competitive markets?
200
Below the demand curve.
Where is the marginal revenue curve for a monopolistically competitive firm?
200
This barrier to entry results when a firm's long run average costs fall as the firm increases output. When they are great enough, they restrict entry into an industry.
What are economies of scale?
200
Patents, Copyrights and Trademarks
What is are government barriers to entry?
300
The additional output a firm produces as a result of hiring one more worker
What is the marginal product of labor
300
The quantity where MC is equal to MR
What is the profit maximizing level of output?
300
The time frame, where if economic profits are being earned, new firms will enter the market.
What is the long run?
300
A strategy that is the best for a firm, no matter what strategies other firms use
What is a dominant strategy?
300
This explains how the usefulness of a product increases with the number of consumers who use it
What are Network Externalities?
400
The principle that, at some point, adding more of a variable input, such as labor, to the same amount of a fixed input, such as capital, will cause the marginal product of the variable input to decline.
What is the law of diminishing returns?
400
This is what always occurs when economic profits exist in perfectly competitive markets.
What is the exit of firms?
400
Brand name management, advertising, defending a brand name...
How do firms use marketing to differentiate products?
400
A game in which pursuing dominant strategies results in noncooperation that leaves everyone worse off.
What is the Prisoner's Delimma?
400
This occurs when a firm's long-run average costs fall so much that a single firm can supply the entire market.
What is a natural monopoly?
500
In the classic text The Wealth of Nations, this famous Scotsman described the benefits resulting from the division of labor
Who is Adam Smith
500
Producing at the lowest possible cost and producing every good or service up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it
What are productive efficiency and allocative efficiency?
500
Charging a price greater than marginal cost and not producing at minimum average total cost?
What are two reasons Monopolistic Competition is inefficient?
500
This enforcement mechanism guarantees that if another firm fails to cooperate and lowers it's price, they will automatically punish the other firm by lowering their price.