Econ exam 3
If the wage rate is constant, the marginal resource cost associated with hiring one additional worker is
A HORIZONTAL LINE AT THE WAGE.
In a monopolistically competitive market, the closer the substitutes are for a product, the more _________ its demand will be; the more rare or unusual a product is, the more __________ its demand will be
Horizontal; Vertical
To calculate profit, which three pieces of info must be identified?
Quantity of output, price, average total cost
Which of the following made "unfair methods of competition" and "unfair or deceptive acts or practices" illegal
The Federal Trade Commission Act
Which of the following prohibits mergers that would substantially lessen competition or create a monopoly
The clayton act
One similarity between the numeric measures of the CR4 and the HHI is
The higher the number, all else held constant, the more concentrated the industry
Which of the following made "every contract, combination, or conspiracy in restraint of trade" illegal
The sherman act
The marginal revenue product associated with hiring one additional worker is
a downward-sloping line similar to the marginal product
Derived demand refers to
a type of demand that is specific to resources
WHen the marginal benefit of the last unit equals the marginal cost of the last unit, production is _______ efficient
allocatively
If an industry's CR4 exceeds 40%, it is considered
an oligopoly
Laws designed to prevent firms from engaging in behaviors that would lessen competition in a market are called ________ laws
antitrust
for monopolistically competitive firms, ____ their products is important because many consumers do not like taking risks, and this way they can learn about products before buying them
branding
A situation in which individuals, firms, or any group of actors coordinate their actions to achieve a desired outcome is
collusion
When firms, individuals, or any group of economic actors engage in ___________, they coordinate their actions to achieve a desired outcome.
collusion
The optimal level of resource utilization increases when the marginal resource cost
decreases
When economists refer to resource demand being a derived demand, they mean that the demand for the resource
depends on the demand for the goods and services produced by those resources
Total revenue minus explicit and implicit costs
economic profit
_______ theory is the study of the strategic behavior of decision makers
game
Profit __________ implies that monopolistically competitive firms should expand product up to the point where the marginal revenue equals the marginal cost.
maximization
Because __________ competitive firms have some control over prices, the firm will charge consumer the price they are willing and able to pay for the available output, which is found by projecting the profit-maximizing output level on the ________ curve.
monopolistically, demand
Through advertising and branding, ________ competitive firms increase the demand for their products and make those demands relatively_______ INESLASTIC, allowing them to charge ________PRICE and generate MORE economic profits.
monopolistically, more, higher
Games can have
more than one Nash equilibrium
a manufacturer's profits are determined not only by its decisions but also by the decisions of the other firms in the industry, this is why we say oligopolistic firms are ___________ ____________
mutually interdependent
Producers operating in oligopolistic markets generate
normal profits and even losses in the short run
a table showing the potential outcomes arising from the choices made by decision makers
payoff matrix
the marginal revenue ____ represents the additional revenue generated from using an additional unit of a resource
product
(π/Q)= P-ATC tells us
profit per unit
The circular flow model shows how households and firms interact in two key markets: the...market and the...market.
resource, product
For firms operating in perfectly competitive markets, if the price of a product is constant the marginal revenue product is equal to
the marginal product times the price
the optimal level of resource utilization occurs where
the marginal revenue product exceeds the marginal resource cost
the amount of a good or service produced by all workers is called
total product
a clear benefit to monopolistic competition for consumers is product
variety