Econ 100 - Exaam THREE Review
How long is a Patent good for?
20 years
What kind of Demand curve does a Monopolist create?
A downward sloping curve
Does an Oligopoly sell a Differentiated or Homogenous product?
Both
What are the THREE ways a Monopolistic Competition market can produce Differentiated Products?
By style or type, by location, by quality
What are the THREE Natural Barriers to entry within a Monopoly?
Control of resources, problems raising capital, economies of scale
Does Monopolistic Competition sell a Differentiated or Homogenous product?
Differentiated
What characteristics do Oligopolies share with Monopolistic Competitions? What does it share with pure Monopolies?
Differentiated product, small barriers to entry
What are costs that are paid in money directly out of the sellers pocket?
Explicit
Does Perfect Competition sell a Differentiated or Homogenous product?
Homogeneous
Does a Monopoly sell a Differentiated or Homogenous product?
Homogeneous
What are costs that act as Opportunity costs for the use of resources (no direct money payment)?
Implicit
Are Oligopoly firms independent or interdependent? Why?
Interdependent, because there are such few firms they rely on each other for price setting
What rule states that when adding additional units of labor eventually leads to falling marginal product?
Law of Diminishing Marginal Returns
What are the TWO forms of Government-created Barriers to entry within a monopoly?
Licensing, patent and copyright laws
A firm's profit is maximized where ___=___.
MR, MC
What are the THREE characteristics that make up a Monopolistic Competition market?
Many sellers, differentiated product, and easy entry and exit
What are the FOUR characteristics of Perfect Competition?
Many sellers, homogeneous products, easy entry and exit, price taker
Which graph curve looks like a Nike Swoosh?
Marginal Costs
What is "the additional quantity of a good produced when an additional worker is hired?"
Marginal Production
A monopolist does not charge a price equal to ____ ____.
Marginal revenue
In perfect competition, the firm's demand curve is equal to _____ ____.
Marginal revenue
What is the difference between Markets/Industries and Firms?
Markets have thousands of sellers, firms consist of one seller within a market/industry
Which form of competition as aspects of a monopoly and some aspects of a perfect competition?
Monopolistic competition
What are the TWO barriers to entry within a Monopoly?
Natural barriers, government-created barriers
What are the THREE forms of Imperfect Competition?
Oligopoly, monopoly, and monopolistic competition
What is the Four Firm Concentration Ratio? What percentage does it need to be above to be considered an Oligopoly? What percentage does it need to be less than to be considered Monopolistic Competition?
Percentage of total revenue earned by the four largest firms in the industry, 80%, 40%
In perfect competition, the firm's supply curve is equal to ____.
Price
Variable costs increases with increased _____ and begin with the first _____ produced.
Production, unit
What are the TWO "kinds" (not forms - forms are like types, like Monopoly, Oligopoly, etc) of Imperfect Competition?
Single price firm, multiple price firm or Price-discriminating firm
What are the THREE conditions for Price Discrimination to occur?
Some degree of price setting power, market is divided into different types of buyers, firm must be able to prevent resale of product
How long is a copyright law good for?
The life of the author plus 50 years
Monopolies have an inefficient Output and Price, which means what? Why?
They charge more and provide less, To make Marginal Costs and Marginal Revenue equal without paying attention to the demand curve
What is "Total quantity of a good produced in a given period of time?"
Total production
___ Revenue is the total number of dollars received form the sale from start to finish. ____ Revenue is revenue received from sale of each additional item.
Total, marginal
When do Natural Monopolies occur?
When a single large firm can produce a product at a very low cost
Negative marginal returns occurs on the graph (the slope decreases) when?
When there are too many workers
The ____ ____ describes the relationship between the inputs a firm uses (land, labor, capital) and the output it creates
production function
Consumers try to maximize ____ (which is ____) and producers try to maximize ____.
utility, happiness, profits