Econ 100 - Exaam THREE Review

How long is a Patent good for?

20 years

What kind of Demand curve does a Monopolist create?

A downward sloping curve

Does an Oligopoly sell a Differentiated or Homogenous product?

Both

What are the THREE ways a Monopolistic Competition market can produce Differentiated Products?

By style or type, by location, by quality

What are the THREE Natural Barriers to entry within a Monopoly?

Control of resources, problems raising capital, economies of scale

Does Monopolistic Competition sell a Differentiated or Homogenous product?

Differentiated

What characteristics do Oligopolies share with Monopolistic Competitions? What does it share with pure Monopolies?

Differentiated product, small barriers to entry

What are costs that are paid in money directly out of the sellers pocket?

Explicit

Does Perfect Competition sell a Differentiated or Homogenous product?

Homogeneous

Does a Monopoly sell a Differentiated or Homogenous product?

Homogeneous

What are costs that act as Opportunity costs for the use of resources (no direct money payment)?

Implicit

Are Oligopoly firms independent or interdependent? Why?

Interdependent, because there are such few firms they rely on each other for price setting

What rule states that when adding additional units of labor eventually leads to falling marginal product?

Law of Diminishing Marginal Returns

What are the TWO forms of Government-created Barriers to entry within a monopoly?

Licensing, patent and copyright laws

A firm's profit is maximized where ___=___.

MR, MC

What are the THREE characteristics that make up a Monopolistic Competition market?

Many sellers, differentiated product, and easy entry and exit

What are the FOUR characteristics of Perfect Competition?

Many sellers, homogeneous products, easy entry and exit, price taker

Which graph curve looks like a Nike Swoosh?

Marginal Costs

What is "the additional quantity of a good produced when an additional worker is hired?"

Marginal Production

A monopolist does not charge a price equal to ____ ____.

Marginal revenue

In perfect competition, the firm's demand curve is equal to _____ ____.

Marginal revenue

What is the difference between Markets/Industries and Firms?

Markets have thousands of sellers, firms consist of one seller within a market/industry

Which form of competition as aspects of a monopoly and some aspects of a perfect competition?

Monopolistic competition

What are the TWO barriers to entry within a Monopoly?

Natural barriers, government-created barriers

What are the THREE forms of Imperfect Competition?

Oligopoly, monopoly, and monopolistic competition

What is the Four Firm Concentration Ratio? What percentage does it need to be above to be considered an Oligopoly? What percentage does it need to be less than to be considered Monopolistic Competition?

Percentage of total revenue earned by the four largest firms in the industry, 80%, 40%

In perfect competition, the firm's supply curve is equal to ____.

Price

Variable costs increases with increased _____ and begin with the first _____ produced.

Production, unit

What are the TWO "kinds" (not forms - forms are like types, like Monopoly, Oligopoly, etc) of Imperfect Competition?

Single price firm, multiple price firm or Price-discriminating firm

What are the THREE conditions for Price Discrimination to occur?

Some degree of price setting power, market is divided into different types of buyers, firm must be able to prevent resale of product

How long is a copyright law good for?

The life of the author plus 50 years

Monopolies have an inefficient Output and Price, which means what? Why?

They charge more and provide less, To make Marginal Costs and Marginal Revenue equal without paying attention to the demand curve

What is "Total quantity of a good produced in a given period of time?"

Total production

___ Revenue is the total number of dollars received form the sale from start to finish. ____ Revenue is revenue received from sale of each additional item.

Total, marginal

When do Natural Monopolies occur?

When a single large firm can produce a product at a very low cost

Negative marginal returns occurs on the graph (the slope decreases) when?

When there are too many workers

The ____ ____ describes the relationship between the inputs a firm uses (land, labor, capital) and the output it creates

production function

Consumers try to maximize ____ (which is ____) and producers try to maximize ____.

utility, happiness, profits