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Finance
Monopoly
Competition
Innovation & Regulation
Free Markets
100
Pieces of paper issued by a firm that give the holder a share of ownership in the company & offers payments to the holder
What is equity?
100
An industry in which there is only one supplier of a product for which there are no close substitutes and in which it is very difficult or impossible for another firm to coexist
What is pure monopoly?
100
A group of sellers of a product who have joined together to control production, sale, and price in hopes of obtaining the advantages of a monopoly.
What is a cartel?
100
A privilege granted to an inventor for a specified amount of time that prohibits other from producing or using the invention without the permission of the inventor.
What is a patent?
100
A commodity that is used up when someone consumes it.
What is a consumable?
200
A private investment firm that holds a portfolio of securities.
What is a mutual fund?
200
Attributes of a market that make it more difficult or expensive for a new firm to open for business
What are barriers to entry?
200
A market dominated by a few sellers that are able to influence market price.
What is oligopoly?
200
Programs & laws that preclude the deliberate creation of monopoly and prevent powerful firms from engaging in related "anticompetitive practices."
What is an antitrust policy?
200
The tendancy of insurance to discourage policy holders from protecting themselves against risk.
What is a moral hazard?
300
An average of the prices of a large set of stocks. Represents the price movements of the entire stock market or a segment of the market. The S&P 500 is an example.
What is a stock price index?
300
An industry in which advantages of large scale production make it possible for a single firm to produce the entire output of the market at lower average cost than a number of firms.
What is a natural monopoly?
300
Occurs when one firm sets the price for the industry and others follow.
What is price leadership?
300
A ceiling above which regulators do no permit prices to rise. Designed to provide an efficiency incentive to firms by allowing them to keep part of any savings in costs it can achieve.
What is a price cap?
300
May be beneficial or detrimental. An activity that causes incidental benefits or damages to others not directly involved in the activity & no corresponding compensation is provided to or paid by those who generate it.
What is an externality?
400
A mutual fund that chooses a particular stock price index, such as the S&P 500, then buys the stocks that are included in the index.
What is an index fund?
400
The sale of a given product at different prices to different customers, when there are no differences in the costs of supplying these customer. Also refers to the practice of charging the same price to different customers when the cost of supplying them differs.
What is price discrimination?
400
Occurs when prices change infrequently, even if there is a moderate cost increase.
What is a sticky price?
400
Savings obtained through increases in quantities produced. Occurs when X% increase in input raises output by >X%. The more produced, the lower the cost per unit.
What are economies of scale?
400
The share of an activity's marginal benet that is received by the persons who carry out the activity,
What is marginal private benefit (MPB)?
500
Inclusion of a number and variety of stocks, bonds, and other investment products in one's holdings in order to minimize the effects of one particular financial product. A way to avoid "putting all your eggs in one basket"
What is portfolio diversification?
500
Any excess of profits earned persistantly by a monopoly firm above that which would have been earned in a perfectly competitive industry.
What are monopoly profits?
500
When a firm seeks to adopt prices and output quantites that make its total revenue as large as possible (as opposed to making profits as large as possible).
What is sales maximization?
500
An alternative and widely used measure of the degree of concentration of an industry. Calculated by adding together the squares of the market shares of the firms in the industry, which magnifies the effect of the largest firms and minimizes the effect of the smallest firms.
What is the Herfindahl-Hirschman Index (HHI)?
500
Occurs if it is possible to change the way resources are used or the combination of goods and services they produce and thereby make consumers and producers better off.
What is resource misallocation?