Unit 1 Basics Economics
The study that focuses on firms, households, and individuals is known as
What is microeconomics?
The five determinants of demand are
What is future prices, income of buyers, tastes and fads, expectations, and substitutes and compilments
market in which buyers and sellers are numerous and well informed that all elements of monopoly are absent.
What is perfect competition?
This theory helps prove a dominant strategy
What is game theory
workers _____ to firms in exchange for wages
What is supply labor
"Other things being equal."
What is Ceteris Paribus?
The point where the demand and supply curve intersect
Market Equilibrium
Will make normal profit in the long run
What are Perfect Competition and Monopolistic Competition?
The fall in total surplus that results from a market distortion, such as a tax, and is a loss of economic efficiency
What is Dead Weight Loss
The lowest wage permitted by law
what is minimum wage
An economic system where the government has total control
What is Command Economy?
The amount a person consumes until they reach their marginal utility
What is the Law of Diminishing Marginal utility
A State of limited competition, in which a market is shared by a small number of producers or sellers
What are Oligopolies?
Price discrimination happens when
the same product is being sold at different prices to different buyers to maximize profits
Labor market in which the employer must increase wage to increase the quantity of labor that is supplied
What is a Monopsony?
Land, Labor, Capital, and entrepreneurship is also known as the...
What is the four factors of production
the Cross-Price Elasticity of these two goods is negative
What are Complement Goods?
Short run shutdown rule
Long run exit rule
P<AVC
market condition in which a firm is able to prevent competition because its economy allows it to produce at a lower ATC than any smaller competitor could
What is Natural Monopoly?
Where Marginal Factor Cost equals Marginal Revenue Product of Labor (MFC=MRP-L)
What is the equilibrium of a Monopsony?
As the production of one good increases, producers must sacrifice ever-increasing amounts of the other goods because factors of production are not perfectly interchangeable between the production of both goods
What is Law of Increasing Opportunity Costs?
The demand curve becomes this as it reaches equilibrium
What is Unit Elastic?
A tax that is a fixed amount, no matter the change
What is a lump sum tax
The Socially Optimal Price is _____ on a monopoly graph
P=MC
When these variable change, the entire demand curve shifts either left of right
What are Determinants of Labor Demand?