Term
|
Definition
| the amount the consumer was willing to pay less the amount the consumer paid |
|
|
Term
| The long run is a time period that is |
|
Definition
| long enough to change the size of the firm’s plant |
|
|
Term
| When a person has a comparative advantage in producing a good or service, the person has a(n) |
|
Definition
| lower opportunity cost in producing that product than someone else |
|
|
Term
| The downward slope of a demand curve |
|
Definition
| represents the law of demand |
|
|
Term
| following is correct about firms in an oligopoly |
|
Definition
| No one firm controls price, but each has an influence on the price. |
|
|
Term
| In order to be successful, a cartel must |
|
Definition
| agree on the total level of production and on the amount produced by each member |
|
|
Term
| Marginal cost is the change is cost that results from a one unit increase in |
|
Definition
|
|
Term
| When there is a surplus in a market |
|
Definition
| there is downward pressure on price |
|
|
Term
| A firm that is a price taker faces a perfectly |
|
Definition
|
|
Term
| New firms will exit a perfectly competitive market when |
|
Definition
| price is less than average total costs in the long run |
|
|
Term
| A point on the production possibilities frontier reflects an |
|
Definition
| attainable point with full employment of all resources |
|
|
Term
| An increase in price causes an increase in total revenue when |
|
Definition
|
|
Term
| When a tax is levied on a good |
|
Definition
| a wedge is placed between the price buyers pay and the price sellers receive |
|
|
Term
| What happens to the demand for a good if a complement’s price increases? |
|
Definition
| The demand decreases and the demand curve shifts leftward. |
|
|
Term
| If a monopolist faces a downward sloping market demand curve, its |
|
Definition
| marginal revenue is always less than the price of the units it sells |
|
|
Term
|
Definition
| the difference between the market price and the marginal cost of producing the good. |
|
|
Term
| In a perfectly competitive market, if firms are earning an economic profit, the economic profit |
|
Definition
| attracts entry by more firms, which lowers the market price |
|
|
Term
|
Definition
| generally fails to maximize total economic well being |
|
|
Term
| Economic growth is shown on the production possibility frontier as |
|
Definition
| an outward shift in the PPF |
|
|
Term
| Perfectly inelastic demand means that consumers |
|
Definition
| will buy a certain quantity, regardless of price |
|
|
Term
| In the long run, a profit maximizing firm will choose to exit a market when |
|
Definition
| total revenue from production is less than total costs |
|
|
Term
|
Definition
| when a factor of production is used but a money payment is not made |
|
|
Term
When oligopolistic firms interacting with one another each choose their best strategy given the strategies chosen by
other firms in the market, we have |
|
Definition
|
|
Term
| The exit of firms out of a competitive market causes the supply curve to |
|
Definition
|
|
Term
| Firms in monopolistic competition compete on |
|
Definition
| price, quality, and advertising |
|
|
Term
| In production of goods and services, tradeoffs exist because |
|
Definition
| society has only a limited amount of productive resources |
|
|
Term
| If a good has a lot of substitutes, then its demand is |
|
Definition
|
|
Term
| In contrast to perfectly competitive markets, monopolists |
|
Definition
| can earn an economic profit indefinitely |
|
|
Term
| In the prisoner’s dilemma |
|
Definition
| when each player chooses his dominant strategy the players reach a Nash equilibrium |
|
|
Term
| Firms entering a perfectly competitive market will cause the price of the product to |
|
Definition
|
|
Term
| In a typical cartel agreement, the cartel maximizes profit when it |
|
Definition
|
|
Term
| Oligopoly is a market structure in which |
|
Definition
| a small number of firms compete |
|
|
Term
| What is a characteristic of monopolistic competition? |
|
Definition
| When firms are free to enter and exit the market |
|
|
Term
| The prisoners' dilemma provides insights into the |
|
Definition
| difficulty of maintaining cooperation |
|
|
Term
For a profitmaximizing
monopolist |
|
Definition
|
|
Term
A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is
called |
|
Definition
|
|
