Midterm 1
A point outside of the production possibilities curve is _______.
Unattainable (only attainable through trade)
What happens to average fixed cost when quantity produced increases?
AFC decreases
Which line is the AVC curve?
https://docs.google.com/document/d/1NhAVhtSyCyLZEZ_aQ7jiDcNIBIHR1zTXUAxEjBs4wCA/edit
Purple
Giving up the next best thing is called....
Opportunity Cost
Economics is the study of how to use....
Limited resources to satisfy unlimited wants as completely as possible.
What is the lowest point of the AVC called?
Shut down
https://docs.google.com/document/d/1NhAVhtSyCyLZEZ_aQ7jiDcNIBIHR1zTXUAxEjBs4wCA/edit
First dot on the ATC line (where green and red lines meet)
This type of cost cannot be avoided, regardless of output
Fixed costs
What happens to a supply curve when a negative shock occurs?
It shifts to the left
This market has pricing discretion because they sell somewhat unique products
Monopolistic Competition
Which of these points are attainable and a full use of resources?
https://docs.google.com/document/d/1-Fvrh3MSEiRPljJN9sZesJlE5L9g8XORdxrYZcwIQV4/edit
B, C, D
For a perfectly competitive firm, marginal revenue the same as...
price
What happens to the number of workers when there is a minimum wage instituted above the equilibrium price?
There will be a surplus of workers and a shortage of jobs.
What costs can be avoided by having output at zero?
Variable Costs
https://docs.google.com/document/d/1-Fvrh3MSEiRPljJN9sZesJlE5L9g8XORdxrYZcwIQV4/edit
X
A firm's decision about what the size of its new factory should be is studied in...
Microeconomics
The demand of an item will not change with price when the demand is ______.
Inelastic
In this market, the firms must consider the reaction of its rivals before choosing a course of action.
Oligopoly
Find the profit maximization total revenue
(graph written on board)
(fig 3 in mt2)
$21
If e>1, is the demand elastic or inelastic?
Elastic