Midterm 2 Topics

Midterm 2 Topics - Announcements Exam Wednesday There will...

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Announcements Exam Wednesday There will be a Homework for ch 15 due next Monday
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Firms, production and costs (ch7) Firms maximize profits (TR-TC) Accounting vs. economic costs (implicit and explicit) Costs (TC, FC, VC, AFC, AVC, ATC, MC ) Know how all the costs relate to each other (e.g. TC=FC+VC, MC=change in TC/change in Q, MC hits AC at minimum, etc. Marginal Product, average product Technologies and input costs isocosts and isoquants
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Input markets Land, Labor, Capital, Entrepreneurial skill Marginal productivity Production technology (minimize costs) Law of diminishing returns (in the short run). Hire input until MP per dollar is the same for al inputs A A K K L L P MP P MP P MP = =
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Short Run Costs 4 of 31
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5 of 38 MONOPOLISTIC COMPETITION AND OLIGOPOLY Characteristics of Different Market Organizations
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Perfect Competition (ch8) 1. “price takers”. 2. Homogeneous products. 3. Everyone has access to full information. 4. Unrestricted entry and exit to the market 5. Prices not fixed or regulated by the state Be familiar with “picture” of the firm.
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Midterm 2 Topics - Announcements Exam Wednesday There will...

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