Perfect Competition
Many (1000s)
In the product market, do individuals supply or demand?
Demand
What does Scarcity in economic mean?
Not having sufficient resources to produce all the goods and services we want.
What are substitutes and complements?
Substitutes are products that are similar to replace another product to better satisfy their needs.
Complements are goods that can be consumed together
How do you find accounting profit?
Total revenue - explicit costs
Are the products different, identical or unique in perfect competition?
identical
In the resource market, do businesses supply or demand?
Demand
Imports are goods and services that are...
purchased from another country
What are inferior and normal goods?
Inferior goods have their demand drop when income increases.
Normal goods are goods that has demand increase when income increases
How do you find economic profit/
total revenue - (explicit + implicit costs)
Do firms set the price are take the price in perfect competition?
Price takers
How is the government involved?
regulation
What is the opportunity cost of something?
What is given up to acquire something else.
Name 3 shifters of Demand.
Any of the following:
Taste and preferences
Population
price of related goods
income
future expectations
What is the economic profit maximizing rule?
MC = MR
Are there short run profits in the long and short run of perfect competition?
Profit in short run. No profit in long run
In the resource market, where are resources sold?
Businesses
Gains from trade refers to...
an increase in available goods for citizens of a nation due to trade
Name 3 shifters of supply.
Any of the following:
Change in price/availability
change in price of related goods
technology
change of expectations
number of competitors
government action
How do you find marginal product/
Change in Total Product / Change in inputs
Give 2 examples of perfect competition.
Agriculture, gasoline, and #2 pencils
In the product market, where are goods and services produced by and sold to?
Produced by businesses and sold to households
All of the following are considered organized economic systems used to address economic problem of scarcity, except:
A. command economy
B. traditional economy
C. absolute advantage economy
D. market economy
E. mixed market economy
C. absolute advantage economy
In the wheat market a drought destroys much of his crop.
Supply would shift to the left
"Marginal" is derived from...?
Total