Econ(Micro) Midterm #2

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Monopoly

1 Seller (most market power)

Oligopolisitc Market

Handful of large sellers

Inferior Goods

Increase price and consumption

Normal Goods

Increase price and reduce consumption

Giffen Goods

Inferior good where demand only increases

Which are sources of market failure

Market power, Externalities, Irrationality

A product market has only one seller, and that seller has a high level of market power. There are no close substitutes for the product. What type of market is this?

Monopoly

Which of the following is NOT a way that the government can intervene in markets

The government can stop the forces of demand and supply from working in markets

Mandate

a requirement to buy/sell a MINIMUM amount

Market failure occurs when market forces lead to

an inefficient outcome

Substitution Effect

change in the price

Income Effect

changed in quantity consumed

When the economic surplus in a market is less than it would be if the market were efficient, the market is experiencing

deadweight loss

A good example of monopolistic competition is the market for

fast food

A rent control usually sets a price ceiling that is below the equilibrium price and thus

generates shortage

Budget Constraint

how available resources are

An assumption of the model of perfect competition is

identical goods

Optimal Consumption Bundle

maximizes consumer total utility(makes consumer happy)

Which of these would illustrate a price floor

minimum wage

The profit-maximizing rule, MC = MR, is followed by firms operating in

monopolistic competition, monopoly, and perfect competition

From an economic perspective, the outcome that yields the greatest economic surplus is the

most efficient outcome

Market power leads to markets that do NOT have socially optimal results. The _____ is higher and the _____ is lower than the socially optimal result in perfect competition.

price; output

Oligopoly

small # of firms that produce the same good

Marginal Utility

the change in utility from consuming an additional unit. (how much you like stuff)


Kaugnay na mga set ng pag-aaral

astronomy- chapter 15 quiz review

View Set