Econ101October1 - Econ 101 Exam 25 multiple choice The...

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Econ 101 October 1, 2007 Exam: 25 multiple choice The theory of supply is about business Competitive product markets Production conditions Structure of a firms cost Marginal cost and supply curves I. What we assume We have an owner manager Who has a business With the primary objective to maximize profit In a perfectly competitive market Theory of supply assumes the sellers maximize profits II. What is a business? An organization producing goods or services, called a firm Assumed to maximize profit Organizations that produce goods and services but are legally prohibited from using profit motive are excluded from formal model of firm III. What is a Market? Collection of buyers and sellers organized for the purpose of exchanging money and goods Market is competitive: Many buyers and sellers Each item is identical Firms can freely enter and exit market When buyers and sellers have full and symmetric information
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  • Fall '06
  • WISSINK
  • Economics, average product, Cost Marginal Cost, business Competitive product markets Production conditions Structure, declines Marginal Product, cost curve Marginal

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