Term
| Average Product is equal to |
|
Definition
| total product/quantity of labor |
|
|
Term
| If the price of good x is 25 and the price of good y is 10, then the slow of the indfference curve at equilibrium is equal to |
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| the combination of goods that can be produced when all resources are being used efficeintly |
|
|
Term
| In economics, utility refers to... |
|
Definition
| the satisfaction derived from consumption |
|
|
Term
| If the price of a substitute for candy bars were to rise, the demand curve would shift ____ , the equilibrium quantity would _____, and the equilibrium price would _____? |
|
Definition
| If the price of a substitue for candy bars were to rise, the demand curve would shift right, the equilibrium quantity would rise, and the equiibrium price would rise. |
|
|
Term
| The basic competitive model is... |
|
Definition
| a highly simplified model dependant on a series of assumptions |
|
|
Term
| By the term "demand curve" economists mean the curve describing the relationship between price and quantity demanded. The focus on the price means... |
|
Definition
| economists are assuming that other variables that influence quantity demanded are constant so that the effect of price changes can be isolated. |
|
|
Term
| The price elasticity of demand for pencils is likely to be ______ than the price elasticity of demand for ocean cruises because _____. |
|
Definition
| The price elasticity of demand for pencils is likely to be more inelastic than the price elasticity of demand for ocean cruises because pencils represent a smaller portion of a person's income. |
|
|
Term
| An example of an issue studied by macroeconomics is |
|
Definition
| the relation between the rate of unemployment and inflation |
|
|
Term
|
Definition
| the cost of capital in the short run |
|
|
Term
| The quantity supplied is influenced by both change in price and changes in determinants of supply. Changes in ______ result in ________ the supply curve. |
|
Definition
| The quantity supplied is influenced by both change in price and changes in determinants of supply. Changes in determinants of supply result in shifts of the supply curve. |
|
|
Term
| if the income elasticity for rice demand is negative and we observe the quantity demanded of rice increases, we know that the income of a consumer |
|
Definition
|
|
Term
| At the equilibrium price the quantity supplied ______ the quantity demanded. |
|
Definition
|
|
Term
| If the price elasticity of a demand is .80, and we observe a price increase of 40% we can expect that... |
|
Definition
the quantity demanded will decrease by 32%.
.80*.40 = 32% |
|
|
Term
| If a country is operating below its production possibilities curve... |
|
Definition
| output of both goods could be increased at the same time |
|
|
Term
| The primary focus of economics is on |
|
Definition
| the related problems of scarcity and choice. |
|
|
Term
| If the price elasticity of demand for donuts is 1.5, a donut shop can predict that a 10% increase in price of donuts will... |
|
Definition
| cause total revenue to decline. |
|
|
Term
| Economic growth would be represented as ______ of the PPF |
|
Definition
| A shift outward/right of the ppf |
|
|
Term
| The combinations of goods that yield the same level of utility lie on a consumer's |
|
Definition
|
|
Term
| If the point is below the ppf... |
|
Definition
| there is an underemployment of resources |
|
|
Term
| According to the anthropological reearch Marshal Sahlins, needs and wants are... |
|
Definition
| historically and socially determined. |
|
|
Term
| Marginal UtilityX/Px = Marginal UtilityY/Py |
|
Definition
|
|
Term
| Utility derived from one more unit of consumption is |
|
Definition
|
|
Term
| The Marginal Product of Labor |
|
Definition
| Is the outpout obtained from one additional unit of labor utilized in production |
|
|
Term
| When average total cost is below marginal cost ATC |
|
Definition
|
|
Term
| The distance between the atc curve and the avc cure is equivalent to |
|
Definition
|
|
Term
| If the price of elasticity is 1.25 and we observe a 25% increase in quantity supplied, we can infer that |
|
Definition
price increased by 20%
.25/1.25 = .20 |
|
|
Term
|
Definition
| the slope of the total product curve |
|
|
Term
Hector intends to spend 36 gold coins on wine and olives. He could purchase 18 kilows of olives and no wine or 4 wines and no olives.
If the wine is placed on the vertical axis what would be the slow of Hector's budget line expressed over relative price |
|
Definition
|
|
Term
| A PPF shows increasing opportunity costs when |
|
Definition
| the slope increases as we move along the x-axis |
|
|
Term
| The law of diminishing marginal returns tells us that holding capital constant, the mpl ... |
|
Definition
| eventuall decreases as more and more labor is added to production. |
|
|
Term
| If the quantity demanded exceeds the quantity supplied at the existing price |
|
Definition
| the price of the good will increase until quantity demanded equals quantity supplied. |
|
|
Term
|
Definition
| enable exchanges between buyers and sellers (consumers and firms) |
|
|
Term
| Marginal Utility X/Marginal Utility Y |
|
Definition
| slope of the indifference curve. |
|
|
Term
| the distane between the avc curve and the avc curve is equivalent to |
|
Definition
|
|
Term
| in production, long run is different from short run because |
|
Definition
| both capital and labor are variable in the long run |
|
|
Term
| the demand curve for the product of a firm in perfect competition is |
|
Definition
| horizontal because the firm is a price taker |
|
|
Term
| when your firm discovers that accounting profits are zero |
|
Definition
| you would be very converned because it indicates that economic profits are negative. |
|
|
Term
| In perfect competition we assume |
|
Definition
|
|
Term
| Increasing returns to scale |
|
Definition
| is the downward sloping section of the LR ATC curve |
|
|
Term
| In the long run, a firm in perfect competition will produce where |
|
Definition
P= min ATC
P= AVC
MC= MR
P= MC |
|
|
Term
| In the short run, a firm in perfect competition will |
|
Definition
| have profits, or losses or break even |
|
|
Term
| If the price of a good in a competitive market is below the minimum average total cost of a firm, the firm |
|
Definition
|
|
Term
| In a graph we would find consumer surplus as the |
|
Definition
| area above the price leel and below the demand curve |
|
|
Term
| A positive externality refers to |
|
Definition
| benefits that do not accrue to the individual/firm taking the action |
|
|
Term
| A natural monopoly occurs because |
|
Definition
| costs of production decline over a large amount of output (very large economics of scale) |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
| [image]
the graph above shows a firm in the long run. In what type of market structure is the firm operating? Does it have loss, profit, or breaking even? |
|
Definition
|
|
Term
| Under monopoly the quantity of output will be ____ and the price will be ____ than under perfect competition. |
|
Definition
| Under monopoly the quantity of output will be lower and the price will be higher than under perfect competition. |
|
|
Term
| In the long run, a monopoly may |
|
Definition
| have profits, losses, or break even. |
|
|
Term
|
Definition
| a barrier to entry that creates a legal monopoly |
|
|
Term
| In the case of natural monopolies |
|
Definition
| governments can regulate the price or recur to public ownership to protect consumers. |
|
|
Term
| Anti-trust regulations refer to |
|
Definition
| laws that forbid the formation of monopolies in an industry |
|
|
Term
| Price regulation of a natural monopoly |
|
Definition
|
|
Term
|
Definition
|
|
Term
| Ownership of essential input |
|
Definition
|
|
Term
|
Definition
| Medical drug manufacturing |
|
|
Term
| Market failure refers to a situation where |
|
Definition
| economic efficiency is not achieved |
|
|
Term
| For a perfectly competitive firm in long run equilibrium |
|
Definition
|
|
Term
| If the quantity of output produced is kept below the equilibrium quantity that would be produced in perfect competition (where demand and supply meet) |
|
Definition
| there is a loss in consumer and producer surplus. |
|
|
Term
| The demand curve for a monopoly |
|
Definition
| is downward sloping and is identical to the total market demand for the good |
|
|
Term
|
Definition
| the addictional cost of producing one more unity of output |
|
|
Term
| an increase in the total demand for a good produced in perfect competition will result in _____ for an individual firm. |
|
Definition
| A shift up of the demand curve. |
|
|
Term
| Externalities _________the assumptions of a perfect competition because they imply____. |
|
Definition
| Externalities violate the assumptions of a perfect competition because they imply that firms and consumers do not bear all the costs or benefits of their actions. |
|
|
Term
| In the long run, a firm in perfect competition will not experience losses because |
|
Definition
| the firm will either exit, or other firms will eit resulting in an increase in the market price of the good. |
|
|
Term
| A good is said to be non-excludable when |
|
Definition
| it is too costly to preven tits use by any one person |
|
|
Term
| A firm experiences _____ in the downward sloping section of the long run avtc cuve. |
|
Definition
| A firm experiences increasing returns to scale in the downward sloping section of the long run avtc curve. |
|
|
Term
| In pefect competition, economic profits will... |
|
Definition
| attract entry by new firms, driving the market price of the good down. |
|
|
Term
| We say tht an economy is Pareto efficient when |
|
Definition
| no one can be made better off w/o making someone else worse off. |
|
|
Term
|
Definition
|
|
Term
| [image]
above is a firm in the short run. what is the profit of the firm? |
|
Definition
|
|
Term
| In the case of a natural monopoly, the application of anti trust regulations may not be in the best interest of consumers because... |
|
Definition
| under natural monopoly one firm can produce at lower costs tahn two or more firms, so breaking up a natural monopoly could result in higher prices. |
|
|
Term
| Represented graphically, producer surplus is the area |
|
Definition
| below the equilibrium price and above the supply cuve. |
|
|
Term
| Regulatory agency capture refers to the situation when |
|
Definition
| a regulatory agency ceases to ahve the best interest of consumers and society as the guide for its activities. |
|
|
Term
| During the industrial revolution the ____ of government regulation of the labor market proved to be extremely ____ to workers because they faced _____. |
|
Definition
| During the industrial revolution the lack of government regulation of the labor market proved to be extremely detrimental to workers because they faced long work days. |
|
|
Term
| Monopolistic competition is characterized by |
|
Definition
| many firms and diffentiated products |
|
|
Term
| Oligopoly is characterized by a few _____ firms where ______ is a possibility. |
|
Definition
| Oligopoly is characteried by a few interedependent firms where collusion is possible. |
|
|
Term
| Firms in monopolistic competition use |
|
Definition
| advertisement to increase product differentiation. |
|
|
Term
|
Definition
| was the result of a prolonged struggle by unions. |
|
|
Term
| Grievance procedutres in the work place are an example of |
|
Definition
| the voice benefits of unions |
|
|
Term
|
Definition
| allow firms to hire non union employees |
|
|
Term
|
Definition
| makes the loss of employment more costly |
|
|
Term
|
Definition
| breaks down production into small tasks that require little skill |
|
|
Term
| National Labor Relations Board |
|
Definition
| government agency that mediates between labor and employers in cases of disputes |
|
|
Term
| workers and employers can be said to have an atagonistic/conflictive relationship because... |
|
Definition
| their interests are opposed with respect to wages and labor intensity/effort. |
|
|
Term
| When the hourly wage is used for compensation, systems of control are implemented by the employers because |
|
Definition
| hiring one hour of labor does not guarantee the level of labor intesity (labor effort) that will be applied. |
|
|
Term
| The relaxation or elimination of government rules that limit the activites of private enterprises is called |
|
Definition
|
|
Term
|
Definition
| policies that increase the role of markets in the allocation of resources |
|
|
Term
| when an individual decides on how much labor to provide to the labor market, we consider the cost of leisure to be equivalent to... |
|
Definition
| the wage rate forgone for each hour of leisure. |
|
|
Term
| the neoclassical model of the labor market (using the indfference curves to derive labor supply) is deficient because |
|
Definition
| individuals cannot exercise full freedom in their choice of numbers of hours spent at work |
|
|
Term
| direct supervision is what type of control |
|
Definition
|
|
Term
| salary is commonly accompanied by |
|
Definition
|
|
Term
|
Definition
| payment per unit produced |
|
|
Term
| an assembly line is this type of control |
|
Definition
|
|
Term
| Income inequality in the United States |
|
Definition
| has increased considerably since the 1980's |
|
|
Term
| A tax on aluminum production equal to the negative externality that results from aluminum production would |
|
Definition
| shift the private mc of the firm to the left, resulting in a socialy efficient quantity of aluminum being produced |
|
|
Term
| when someone takes an action that imposes costs on others we have a case of |
|
Definition
|
|
Term
| Progressive taxation refers to |
|
Definition
| a tax system that weighs more heavily on high income groups than low income groups |
|
|
Term
| The implementation of marketable permits for pollution |
|
Definition
| would assign pollution rights to those who hold them, and allow the exchange of these rights. |
|
|
Term
| according to neoclassical theory, at equilibrium the wage rate received by employees |
|
Definition
| is equal to the value of the marginal product of labor |
|
|
Term
|
Definition
| measure of income inequality |
|
|
Term
|
Definition
| command and control apporach to pollution |
|
|
Term
|
Definition
|
|
Term
|
Definition
| firm's supply curve plus negative externality |
|
|
