Final Exam _1

Final Exam _1 - Term Definition If TU>0 MU>0 Term...

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Term: If TU>0 Definition: MU>0 Term: Income effect Definition: as wage rate rises you might want to work less because you can make what you did before or more and buy more Term: %^Q > %^P Definition: Elastic Term: Short Run Supply Curve (firm) Definition: portion of the firms marginal costs curve that lies above AVC curve Term: Market Failure Definition: situation where market does not provide the ideal or optimal amount of a good
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Term: free rider problem Definition: -anyone who receives goods with paying for them Term: 4 assumptions for wages to remain the same for everyone Definition: -demand for every type of labor is the same-no special non pecuniary aspects to any job-all labor is homogeneous and can be trained for different types of employment at no cost-all labor is mobile at zero cost Term: Substitution effect Definition: as you are offered a higher wage, you might want to work more hours to make more $ Term: ATC= Definition: TC/Q
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Term: constant return to scale Definition: inputs increased to some % and outputs increase to the same %, unit costs remain constant Term: Income Elasticity-Normal Good Definition: Ey > 0 Term: Individual Supply of Labor Definition: -depends on the degree of the income and substitution effects for each person Term: AVC= Definition: TVC/Q Term: assumptions monopolistic competitor Definition: -many sellers and buyers-each firm produces and sells a slightly different product-easy entry and exit
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Term: Conditions for Long run competitive equilibrium Definition: -no incentive for firms to enter /exit
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