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- Microeconomics cumulative flashcards
Microeconomics cumulative flashcards
Economics 2305 with Alabed at Texas Tech University
About this deck
By: Brady Bacchus
Created: 2010-12-11
Size: 40 flashcards
Views: 50
Created: 2010-12-11
Size: 40 flashcards
Views: 50
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A firm's cost of production is determined by all of the following except...
the amount of corp taxes it must pay on its profit
The explicit cost of production is also called
accounting cost
If a producer is not able to expand its plant capacity immidiately, it is...
operating in the short run
The price elasticity of an upward-sloping curve is always
positive
For the last unit of a good produced by a perfectly competitive firm MR>MC then...
the firm added more total rev than total cost
What is allocative efficiency?
situation in which resources are allocated such that the last unit of output produced provides a marginal benefit to consumers equal to the marginal cost of producing it
Marginal product of labor
the additional output that results when one more worker is hired
In the long run, a perfectly competitive market will
supply whatever amt consumers demand at a price determined by the minimum point on the typical firm's average total cost curve
Long run cost curves are U shaped because
of economies and diseconomies of scale
If the cross-price elasticities of two products are negative they are
complements
If a perfectly competitive firm's price is less than its average variable cost, the firm should
shut down
In perfect competiton
the market demand curve is downward sloping while demand for an individual seller's product is perfectly elastic
The long run average cost curve shows
the lowest average cost of producing every level of output in the long run
If the marginal cost curve is below the average variable cost curve, the
average variable cost is decreasing
What will not change as output changes?
Total fixed cost
Income elasticity measures
how a good's quantity demanded responds the change in buyers incomes
If average variable costs curveis above the marginal cost curve
marginal costs can either be increasing or decreasing
A characteristic of the long run is
all inputs can be varied
A perfectly competitive firm's supply curve is its
marginal cost curve above its minimum average variable cost
If production displays economies of scale, the long run average cost curve is
downward sloping
The price elasticity of supply is equal to
the % change in quantity supplied divided by the percentage change in price
the average total cost of production
equals total cost of production divided by the level of output
Market supply is found by
horiz. summing the relevant part of each individual producers marginal cost curve
Marginal cost is equal to the
change in total cost divided by the change in output
Technology refers to
the processes used by a firm to transform inputs into output
Technoligical change is a change
in a firms ablility to produce a given level of output with a given quantity of inputs
T/F? Firms in perfect competition produce the allocatively effecient output in the short run and in the long run
True
The minimum effiecient scale is
the level of operation where long run average costs are lowest
Cross price elasticity is postive for
substitutes
The formula for total fixed cost is
TFC=TC-TVC
In the short run, if marginal product is at its maximum then
marginal cost is at its minimum
Average total cost is calculated with what formula
ATC=AFC+AVC
Price floor
Max price sellers can legally sell
Price celing
minimum price sellers can legally sell
consumer surplus
difference between highest price a consumer is willing to pay for a good and the price they actually pay
producer surplus
the difference between the lowest price a firm would be willing to accept and the price it actually recieves
economic surplus
sum of consumer and producer surplus
deadweight loss
when price of a good is above equlib price
equalibrium
results in greatest amount of economic surplus
economic effieciency
market outcome in which marginal benefit to consumers = marginal cost of production
About this deck
By: Brady Bacchus
Created: 2010-12-11
Size: 40 flashcards
Views: 50
Created: 2010-12-11
Size: 40 flashcards
Views: 50
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy