Economies of scale exist when:
A) input prices are falling.
B) the average cost of production falls as output ris
Suppose all firms in a perfectly competitive industry are earning an economic profit.
One would expect that, over time, the
> Behind the Supply
> Curve: Inputs and
Explain how opportunity cost is related to the supply curve
Outline the Producers Problem
Should I produce?
If yes: How much should I produce?
1) The objective of a firm is to
A) cut costs as far as possible.
B) pay its employees as little as possible.
C) drive its comp
Distinguish among three types of imperfectly competitive
industries and describe how imperfect competition differs from
> Efficiency and
Define and explain the differences between accounting
profit, economic profit, and normal profit
Explain the Invisible Hand Theory and show how economic
profit and economic loss a
Chapter 3- Part 3 (Equilibrium)
A cost of an activity that falls on people not engaged in the activity is called a(n):
A) external benefit.
B) negative e
The price elasticity of demand is a measure of:
A) the change in quantity demanded of a good that results from a change in i
In general, individuals and nations should specialize in producing those goods for
which they have a(n):
A) absolute advantag
The goal of utility maximization is to allocate your _ in
1) Economics is the study of:
A) the financial concerns of businesses and individuals.
B) whether we will have enough resources
1. What is the profit-maximizing rule for a firm (monopolist and in perfect competition)?
mb=mc, perfect competition=price=marginal cost, monopoly= marginal rev=marginal
2. How can one calculate profit knowing: with average total cost, average varia
Arec essays Final exam
The drones that are being developed are great because It will lower the cost of labor, but
at the same time, the costs incurred will be that the farmers will have to purchase the drones.
The firms in the corn industrys variable c
1.) What effects do price and quantity controls have on consumer, producer, and total
surplus? They take away from consumer, producer, and total surplus or it can add if they
have a larger quantity.
2.) Why are price and quantity controls usually ineffici
Intro & Chapter 1
Tuesday, January 17, 2 017
First principles and Basic Terms
Economics is the study of: Choice
The study of how individuals/ society choose to use the recourses to satisfy
Scarcity is wha
> Economic Models:
> Trade-offs and Trade
2.1: Trade-offs: The Production Possibility
The production possibility frontier (PPF) shows
the maximum quantity of one good that can be
produced for any given production of the other.
7.1: Excise or per-unit Tax
Excise tax: tax on sales of a good or service.
Effects of an excise tax:
it raises the price paid by buyers, and
it reduces the price received by sellers.
Thus, it drives a wedge between the two.
If tax i
WHAT YOU WILL LEARN IN THIS
> Making Decisions
9.1: Different Cost Terms
9.1a: Explicit cost: a cost that involves actually
laying out money.
9.1b: Implicit cost: does not require an outlay of
money; it is measured by the value, in
> Part 1: Demand
3.1 Competitive Market
A competitive market consists of:
many (potential) buyers and sellers (everybody is a
same good or service
3.2 Supply and Demand model
The supply and demand model is a model of how
WHAT YOU WILL LEARN IN THIS
> Public Goods and
> Common Resources
Market works well
Market does not
interferes in market