Resources

• What are the three main determinants of resource demand? THE PRICE OF OTHER RESOUCES, THE PRODUCTIVITY OF THE RESOURCE, THE DEMAND FOR THE GOOD OR SERVICE A RESOURCE IS USED TO PRODUCE.

a monopolistically competitive firm should produce output until the marginal revenue equal the marginal cost.

• The marginal revenue product curve also represents the RESOURCE demand curve.

• Game theory helps us study the strategic behavior of oligopolistic firms

• A firm will purchase a resource if THE BENEFIT ASSOCIATED WITH THE PURCHASE IS GREATER THAN OR EQUAL TO ITS COST.

• A situation in which individuals firms or any group of actors coordinate the actions to achieve desired outcome is COLLUSION.

• Over time, many of the functions that used to be served by labor unions HAVE BEEN TAKEN UP BY DIFFERENT DEPARTMENTS OF THE FEDERAL GOVERNMENT.

• A table showing the potential outcomes arising from the choices made by decision makers is A PAYOFF MATRIX.

• When firms want to product additional output, they make decisions at the MARGIN.

• As in a monopoly, in an oligopoly, the industry has extensive entry barriers.

• When determining where to work or which job to take, the wage that should be considered is the real wage.

• Because MONOPOLITISCALLY 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 DEMAND curve.

• Price floors create a surplus in the market because price floors are set ABOVE THE EQUILIBRIUM PRICE.

• Games can have MORE THAN ONE NASH EQUILIBRIUM

• The payment name for entrepreneurial ability is PROFIT.

• If the wage rate is constant, the marginal resource cost associated with hiring one additional worker is A HORIZONTAL LINE AT THE WAGE.

• The cost of an additional unit of a resource, such as labor is called THE MARGINAL RESOURCE COST.

• In an oligopoly market, there are relatively few firms and the product is either standardized or differentiated.

• In the circular flow model, HOUSEHOLD AND BUSINESES interact in the resource market and the product market.

• In an oligopoly, there are a few large producers.

• The objective of each union is to increase the WAGES earned by its member.

• In an oligopoly: PRODUCERS MAY OR MAY NOT EARN ECONOMIC PROFITS.

• The marginal revenue product depends on THE MARGINAL PRODUCT AND THE PRICE OF THE PRODUCT THE RESOURCE PRODUCES.

• One common feature of MONOPOLISTICALLY competitive market is that firms invest heavily in product development and innovation which benefits CONSUMERS greatly.

• Recent data show that total average compensation for nonunion employees was LESS than the total average compensation for union employees.

• Producing output at the lowest possible total cost of production per unit is PRODUCTIVE efficiency.

• Employers need to factor the PRODUCTIVITY of the workers and the PRICE of their products into their hiring decisions.

• The marginal REVENUE product represents the additional revenue generated from using an additional unit of a resource.

• Resource utilization and marginal resource costs move in OPPOSITE DIRECTIONS.

• Monopolistic competition and perfect competition have one main characteristics in common: relatively easy market entry and exit.

• For firms operating in perfectly competitive market, if the price of a product is constant, the marginal revenue product is equal to THE MARGINAL PRODUCT TIMES THE PRICE.

• Monopolistically competitive markets: combine characteristics of competitive markets and pure monopolies.

• The goal of an inclusive union is to bargain for wages that are HIGHER than the current equilibrium wages in the market.

• Producing the goods and services that consumers most want in such a way that the marginal benefit equals the marginal cost is ALLOCATIVELY EFFICIENCY.

• Purchasing power is THE VALUE OF A MONETARY AMOUNT EXPRESSED IN TERMS OF THE GOODS AND SERVICES IT CAN BUY.

• A DOMINANT strategy is a situation in which a particular strategy yields the highes payoff, regardless of other player's strategy.

• In the market for labor, household are on the SUPPLY side, and firms are on the DEMAND side

• A firm should continue to hire workers so long as the REVENUE THEY GENERATE EXCEEDS OR EQUALS THEIR COST.

• The real wage is the wage adjusted for PRICES.

• A situation in which a particular strategy yields the highest payoff, regardless of the other player's strategy is A DOMINANT STRATEGY.

• The demand for resources is DERIVED from the demand for the goods and services produced by the resources.

• Profit maximization implies that monopolistically competitive firms should expand product up to the point where the marginal revenue equals the marginal cost.

• Despite the decrease in union membership UNIONS ARE STILL EFFECTIVE AT INCREASING THE WAGES OF THEIR MEMBERS.

• The additional cost incurred as a result of utilizing one or more unit of a variable resource is called MARGINAL RESOURCE COST.

• A decrease in labor productivity lowers the demand for labor, resulting in lower WAGES and EMPLOYMENT.

• The marginal revenue product equals THE CHANGE IN TOTAL REVENUE DIVIDED BY THE CHANGE IN THE RESOURCE QUANTITY.

• The optimal level of resource utilization increases when the marginal resource cost DECREASES.

• The strategy of distinguishing one firm's product from the competing products of other firms is called product differentiation.

• The marginal revenue product curve also represents the resource DEMAND curve.

• When firms, individuals, or any group of economic actors engage in collusion, they coordinate their actions to achieve a desired outcome.

• Labor unions FOUGHT FOR BETTER AND SAFER WORKING CONDISIONT AND FOR INCREASED WAGES AND BENEFITS.

• When the marginal benefit of the last unit equals the marginal cost of the last unit, production is ALLOCATIVELY efficient.

• In deciding how many workers a business should employ, THE MARGINAL REVENUE PRODUCT IS KEY.

• Which following is not a characteristic of an oligopoly? Producers who are price takers.

• 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.

• The behavior followed by oligopolistic firms needs to be strategic, given that they face other competitors in their market.

• 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 tools, machinery, infrastructure, and knowledge used to produce goods and services are classified as the resource CAPITAL.

• If a firm in a noncompetitive market wants to sell more units, it must lower the PRICE for every unit it sells.

• Through advertising and branding, monopolistically competitive firms increase the demand for their products and make those demands relatively more INESLASTIC, allowing them to charge higher PRICE and generate MORE economic profits.

• The marginal revenue product associated with hiring one additional worker is A DOWNWARD-SLOPING LINE SIMILAR TO THE MARGINAL PRODUCT.

• When monopolistically competitive firms follow the marginal revenue and the marginal cost rule, the results can be ECONOMIC profits, NORMAL profits, or even losses depending on market conditions.