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