Show:
Marginal and Average
Market Failure
Monopoly
Market Graphs
Name That Section!
100
The profit-maximizing quantity is found where
MC=MR
100
Marginal social cost minus marginal external cost equals
marginal private cost
100
A group of sellers are acting as a monopoly. This group is called a
cartel
100
Compared to a PC firm, a monopoly’s price is ____ and quantity is ____.
higher, lower
100
Section 14, the last section.
Market Failure
200
Decreasing returns causes the marginal product curve to slope ____.
down
200
Non-excludable goods have this problem.
free-rider problem
200
A monopoly is earning profits. What happens to its profits in the long run?
Profits persist (or continue) in the long-run.
200
Factor demand comes from the demand for
goods and services
200
We studied sections 1 and 2, then we skipped to section 9. What is the name of section 9?
Behind the Demand Curve
300
One more worker can produce 5 more apples. Each apple's price is $2. Therefore, this $10 is called ___.
MRP, not MR!
300
Consuming this good does not lower the amount for another person. This characteristic is called ___.
non-rivalrous
300
If a monopoly begins to price discriminate, consumer surplus ____, producer surplus ____, and deadweight loss ____. (how will they change?)
decreases, increases, decreases
300
Which curve is increasing during diseconomies of scale? Be specific.
LRATC
300
Section 2
Supply and Demand
400
If average total cost is decreasing, how is marginal cost changing? (Be careful!)
Unclear, it may be increasing or decreasing.
400
The textbook mentions 3 different reasons why markets fail. The cheat sheet mentions 5. Name 2 reasons.
Market power, externalities, public goods, asymmetric information, missing markets.
400
Which quantity is greater for a natural monopoly? P=MC or P=ATC?
P=MC
400
If demand of buyers is perfectly elastic, and government taxes sellers, who will end up paying the tax?
sellers
400
Section 13
Factor Markets
500
Where do MP and AP cross each other?
at maximum AP
500
Name 2 transaction costs found in the Coase Theorem.
communication costs, legal agreements, delays in bargaining
500
Governments usually requires natural monopolies to set what type of pricing?
average cost pricing
500
Compare the graphs of a perfectly competitive labor market. Which curve is different and how is it different?
a monopsony’s MFC is above S, a PC labor market’s MFC = S
500
Section 11
Market Structures: Perfect Competition and Monopoly