derived demand-the demand for an input used in the production process (page 422)
marginal product of labor-the change in output associated with adding one additional
worker (page 424)
value of the marginal product (VMP)- the marginal product of an input m
2. INNEFFECTIVE/NONBINDING: You have chosen a price ceiling that is above the equilibrium
price. When a price ceiling is above the equilibrium price it is considered nonbinding. Since it is
nonbinding, there will be no changes to the market equilibrium pr
C H A P T E R 1 4 T H E D E M A N D A N D S U P P LY O F R E S O U R C E S
In an effort to create a healthcare safety net, the government requires
employers to provide healthcare coverage to all employees. What impact will
this increased covera
Chapter 15 Income, Inequality, and Poverty
Suppose that society restricted the economic opportunities of right-handed
persons to jobs in construction, while left-handed persons could work any
job. Wages in construction would be _ because of the
Chapter 1- incentives, Consequences, innovation, trade off, Marginal thinking, Trade and
Markets, Comparative advantage, opportunity cost, Scarcity, and choices
What is Econ?
-The study of how people allocate their limited resources to satisfy their nearl
price taker-a firm with no control over the price set by the market (page 272)
profit-maximizing rule-the rule stating that profit maximization occurs when the firm chooses
the quantity that causes marginal revenue to be equal to marginal co
Price Elasticity of Demand = % change in quantity demanded/ % change in price
% change in quantity demanded= is total difference in quantity (lowered price is negative) DIVIDED BY
the middle point of the difference. (example 1000 to 900 -100/950) on the t
monopolistically competitive a market structure in which barriers to entry are low and
many firms compete by selling similar, but not identical, products. These firms differ from
perfectly competitive firms in two major ways: 1) they charge a price greate
Finding Marginal Revenue.
Average Fixed Cost= Fixed Cost/ Output
Average variable cost= Variable cost/ output
Average total cost= Total cost/output
Marginal cost= Change in total cost/ change in output
q P ATC
In competition, P = MR
QUESTION 1 11.12points
The following table shows your neighborhood’s demand for drinking water. Assume that only two ﬁrms (Waterland and Aquataste) produce and sell water in this market.
Each firm offers the same quality no ﬁxed costs are incurred in the
Based on the graph below: how does the monopolist's decision compare to the efﬁcient price and output?
I Q awe-monopolist charges less and produces less.
if; lo. The monopolist charges more and produces more.
C. c. The monopolist charges mor
QUESTION 1 12.5pDints
Which of the following is an example of perfect price discrimination?
34% cell phone carrier offers unlimited calling on the weekends for all of its customers.
b. Tickets to the student section for aii basketball games are $5.