Microeconmics

We know that as the price goes up we move down the demand curve and up the supply curve. So what establishes what the price actually is in a market based economy?

Where the market demand curve and market supply curve intersect (market equilibrium).

If a small power plant can produce 500 megawatts of power at 11 cents a watt, but a medium-sized power plant can produce 750 megawatts of power at 9 cents a watt, power production is said to have what when moving between the two production processes?

Economies of Scale

Market Demand is the what an individual consumer demands for a good or service for themselves.

False

The "short-run" is a period of time no greater than 3 months (one quarter).

False

The Law of Diminishing Returns states output always grows at the same rate as more time, money, and resources are invested.

False

A _______ cost doesn't change when the rate of output changes, and a _______ cost does change when the rate of output changes.

Fixed; Variable

From the definitions, Total Revenue is equal to what?

Price of a Good x Quantity Sold

The maximum amount of a single good that can be produced from various combinations of factor inputs is known as what?

The Production Function

In general, U.S. producers can sell goods to...

The U.S. government. Domestic household consumers. Other businesses in the factor market. Foreign governments, businesses and consumers. All of the above are potential customers.

Profit is different from revenue because profit accounts for what?

The cost of production.

Other than price, potential market supply is determined by which of the following?

The number of potential buyers and their respective tastes.

Other than price, market demand is determined by which of the following?

The number of potential sellers or producers.

An increase in the price of one good can cause the demand for another good to increase if the goods are substitutes.

True

Diseconomies of scale could be one challenge government has with providing services cheaply.

True

Complements in consumption are bought together so they can be influenced by the price of the other. Assume that peanut butter and jelly are complements. A decrease in the price of one will result in

an increase in the demand for the other.

According to the law of demand, during a given period of time, the quantity of a good demanded

increases as its price falls, ceteris paribus.

A change in demand means there has been a shift in the demand curve. A change in quantity demanded ...

means that price has changed and there is movement along the demand curve.

Which determinant of demand changes in the personal computer market as more individuals become interested in "surfing the Internet"?

number of buyers