Review_Test_3 - Chapter 9 Perfect Competition What are the...

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Chapter 9 Perfect Competition What are the characteristics of a perfectly competitive market? Because perfectly competitive firms take the price of its output as given, what does it imply with regard to its marginal revenue? What is the optimal (profit-maximizing) output level? Is the profit-maximizing level of output profitable to produce? How do you determine this? Even if profits<0 at Q*, why would a firm still produce Q* in the short run? Where are the break-even and shut down points? When will firms enter, stay in, or leave an industry? When is long-run equilibrium achieved? Chapter 12 Factor Markets What is a factor of production? Physical versus human capital What is the condition for hiring the optimal amount of a factor of production, e.g., labor? From marginal product (of labor) to value of marginal product (of labor) What happens to the optimal demand for a factor of production when price of the good, supply of other factors, or technology changes?
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