Help
Options
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't Know
Remaining cards (0)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Micro Econ2
chapters 7, 10-12
| Question | Answer |
|---|---|
| Buying at a low price in one market and selling at a high price in another Drives prices towards each other | Arbitrage |
| a way to measure opportunity for arbitrage in markets | Purchasing Power Parody |
| when marginal cost does NOT equal marginal benefit is there a chance for arbitrage | Yes |
| When world price is higher who is in favor of free trade? | Producers |
| When world price is lower who is in favor of free trade? | Consumers |
| What is a tax on imports? | A Tariff |
| What is consumer surplus? | The area below the demand curve but above the going price, aggregated over all trades made |
| What is producer surplus? | The area above the supply curve but below the going price, aggregated over all trades made |
| Foreign sellers selling to the U.S are... | Importers |
| What is forgone interest? | Funds used to buy capital that could have been used for some other purpose, and in their next best use, they would have earned interest |
| Quantity Produced (Q) / Labor (L) = | Average Product |
| change in Q / change in L = | Marginal Product (MP) [decreasing function of L] |
| Marginal product of an additional worker is less than the marginal product of the previous worker | Diminishing Marginal Returns |
| MP X price sold for = | Marginal Revenue Product (MRP) or Value of MP (VMP) |
| Total Variable Cost (TVC) + Total Fixed Cost (TFC) = | Total Cost (TC) |
| change in TC / change in Output (Q) = | Marginal Cost (MC) |
| TC / Q = | Average Total Cost (ATC) |
| Fixed Cost (FC) / Q = | Average Fixed Cost (AFC) |
| What is the benchmark used to measure other markets? | Perfect Competition |
| The time frame in which the quantity of at least one factor of production is fixed | Short Run |
| The time frame in which the quantities of ALL factors of production can be varied | Long Run |
| A past expenditure on a plant that has NO resale value ex) car will not be worth as much if you try to resell it (depreciation) | Sunk Cost |
| cost of land, capital, and entrepreneurship cost that you will incur without producing a single product (when output is zero) | Fixed Cost |
| Double all inputs and output more than doubles cost per unit gets smaller | Increasing Returns to Scale |
| double all inputs and output also doubles | Constant Returns to Scale |
| double all inputs and output less than doubles cost per unit gets larger | Decreasing Returns to Scale |
| Diminishing marginal returns is a long run or short run concept | Short Run Concept |
| Decreasing returns to scale is a long or short run concept | Long Run Concept |
| Smallest output at which long run average cost reaches its lowest level | Minimum Efficient Scale |
| Price X Quantity = | Total Revenue (TR) |
| Cost X Quantity = | Total Cost (TC) |
| TR - TC = | Total Profit (TP) |
| The break even point is the... | Lowest Possible ATC |
| The shut down point is the... | Minimum AVC |
| When MC increases the MP... | Decreases |
| Marginal Benefit (MB) is... | The Market Price |
| Profit maximizing output is when... | MC = MB |
| Characteristics of perfect competition are... | many buyers and sellers no restrictions to entry and exit from the market identical products no firm has an advantage over another well informed buyers and sellers |
Created by:
558936746
Popular Business sets