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Economics-Mankiw-P5
Definitions of the newest Mankiw (Special edition with financial crisis)Ch.13-17
| Question | Answer |
|---|---|
| Total revenue | the amount a firm receives for the sale of its output |
| Total cost | the market value of the inputs a firm uses in production |
| Profit | total revenue minus total cost |
| Explicit cost | input costs that require an outlay of money by the firm |
| Implicit cost | input costs that do not require an outlay of money by the firm |
| Economic profit | total revenue minus total cost, including both implicit and explicit costs |
| Accounting profit | total revenue minus total explicit cost |
| Production function | the relationship between quantity of inputs used to make a good and the quantity of output of that good |
| Marginal product | the increase of output that arises from an additional unit of input |
| Diminishing marginal product | the porperty whereby the marginal product of an input declines as the quantity of the input increases |
| Fixed costs | costs that do not vary with the quantity of output produced |
| Variable costs | costs that vary with the quantity of output produced |
| Average total cost | total cost divided by the quantity of output |
| Average fixed cost | fixed cost divided by the quantity of output |
| Average variable cost | variable cost divided by the quantity of output |
| Marginal cost | the increase in total cost that arises fron ab extra unit of production |
| Efficient scale | the quantity of output that minimizes average total cost |
| Competetive market | a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker |
| Average revenue | total revenue divided by the quantity sold |
| Marginal revenue | the change in total revenue from an additional unit sold |
| Monopoly | a firm that is the sole seller of a product without close subsititutes |
| Natural monopoly | a monopoly that arises because a single firm can supply a good or a service to an entire market at a smaller cost than could two or more firms |
| Price discrimination | the business practice of selling the same good at different prices to different customers |
| Oligopoly | a market structure in which only a few sellers offer similar or identical products |
| Monopolistic competition | a market structure in which many firms sell products that are similar but not identical |
| Collusion | an agreement among firms in a market about quantities to produce or prices to charge |
| Cartel | A group of firms acting in unison |
| Nash equilibrium | a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen |
| Game theory | the study of how people behave in strategic situations |
| Prisoners' dilemma | a particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial |
| Dominant strategy | a strategy that is best for a player in a game regardless of the strategies chosen by the other players |
Created by:
Medardus
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