consume, satisfaction
  • The more we _____ of any good, the less _____ we get from each additional unit
  • there is no effective way of excluding nonpayers from benefit of the good once it comes into existence.
  • the lowest level of output at which a firm can minimize long-run average costs
  • The equilibrium market price is below what some consumers are willing to pay for the product.
exclude
  • Positive Externalities: D shifts ___
  • Law of __________ is key to short run production costs
  • The consumer tries to use his money income to derive the greatest amount of satisfaction or happiness
  • Can't ___________ those who don't pay
Positive Externalities
  • The benefit surplus received by consumers It is the difference between the maximum price a consumer is willing to pay for a product and the actual price.Consumer surplus can be applied to one consumer or many consumers.
  • benefits
  • None of the above
  • Big plant - Low ATC
Marginal Cost
  • Can I consume the same unit of product as others?
  • Demand-side Market Failure:
  • Public goods are non_____ & non__________
  • Change in TC / Change in Q =
total utility
  • If a firm offers this product, can it exclude those who do not pay?
  • Total amount of satisfaction from consuming a specific quantity
  • Long Run Production Costs only have what type of costs?
  • the typical amount of accounting profit that you would mostly likely have earned in one of the firms in the same industry
happiness
  • Total amount of satisfaction from consuming a specific quantity
  • opportunity costs of using its self-owned, self-employed resources.
  • Utility of a good or service is the ______ one gets from consuming it
  • Goods are scarce therefore every good carries a price tag
Budget constraint
  • Consumer surplus ____________ when equilibrium price ____________.
  • Consumer has a fixed, limited amount of income therefore each consumer faces a _________
  • the payments a firm must make to attract resource it needs away from alternative production opportunities (can be explicit or implicit)
  • monetary payments to those who supply resources (land, labor, capital, entrepreneurial ability).
Negative Externalities
  • costs
  • Accounting profit
  • Consumer has a fixed, limited amount of income therefore each consumer faces a _________
  • Characteristics of (Pure) public goods
demand
  • What curve reflects marginal benefit received by a consumer.
  • Long Run Production Costs only have what type of costs?
  • Positive Externalities: D shifts ___
  • This is a _____-side market failure
Managerial Specialization
  • Large scale production means better use of management
  • The more we _____ of any good, the less _____ we get from each additional unit
  • Increasing marginal returns due to_________.
  • Long Run Production Costs only have what type of costs?
long run
  • The additional output generated by additional units of an input will diminish.
  • The difference between the actual price a producer receives and the producer's minimum acceptable price (the marginal cost of the product).
  • If one person consumes the product, the unit is not available to others.
  • a period long enough for a firm to adjust quantities of all resources including plant capacity. (It takes a long time to build a new plant.)
left
  • Positive Externalities: D shifts ___
  • Negative Externalities: S shifts ____
  • ________ riders problem, which means Those who do not pay can still enjoy the product
  • Effective use of a machine demands higher volume of production
nonrival
  • any resource that cannot be varied in the short run
  • Goods are scarce therefore every good carries a price tag
  • Can I consume the same unit of product as others?
  • Once a public good is produced, _______ can enjoy it
variable resource
  • Consumer has a fixed, limited amount of income therefore each consumer faces a _________
  • any resource that can be varied in the short run to increase or decrease production
  • any resource that cannot be varied in the short run
  • The difference between the actual price a producer receives and the producer's minimum acceptable price (the marginal cost of the product).
short run
  • Those who are not willing to pay the price will be excluded from consuming the product.
  • a period long enough for a firm to adjust quantities of all resources including plant capacity. (It takes a long time to build a new plant.)
  • The additional output generated by additional units of an input will diminish.
  • a period in which at least one of a firm's resources is fixed. For example, a period too brief for a firm to build a new plant to increase capacity.
Nonexcludability
  • the payments a firm must make to attract resource it needs away from alternative production opportunities (can be explicit or implicit)
  • If a firm offers this product, can it exclude those who do not pay?
  • The difference between the actual price a producer receives and the producer's minimum acceptable price (the marginal cost of the product).
  • there is no effective way of excluding nonpayers from benefit of the good once it comes into existence.
economies and diseconomies of scale
  • Increasing marginal returns due to_________.
  • Characteristics of (Pure) public goods
  • Solution: __________ provides public goods through _______
  • ______________ is key to long run production costs.
Consumer Surplus
  • The benefit surplus received by consumers It is the difference between the maximum price a consumer is willing to pay for a product and the actual price.Consumer surplus can be applied to one consumer or many consumers.
  • benefits
  • there is no effective way of excluding nonpayers from benefit of the good once it comes into existence.
  • What curve shows all the combinations of products that will yield the same satisfaction or total utility to a consumer
TC and ATC
  • Large scale production means better use of management
  • Long Run Production Costs only have what type of costs?
  • Total amount of satisfaction from consuming a specific quantity
  • opportunity costs of using its self-owned, self-employed resources.
Constant Returns to scale
  • costs
  • benefits
  • Constant ATC
  • None of the above
Supply curve
  • What curve reflects marginal cost incurred to a seller.
  • Effective use of a machine demands higher volume of production
  • any resource that cannot be varied in the short run
  • What curve reflects marginal benefit received by a consumer.
Prices
  • What curve reflects marginal cost incurred to a seller.
  • Goods are scarce therefore every good carries a price tag
  • Costs exist because resources are ______.
  • Once a public good is produced, _______ can enjoy it
Positive externality
  • Supply-side Market Failure:
  • Firms do not get compensated for the benefit bestowed on third partyUnderproduction->DWL
  • any resource that can be varied in the short run to increase or decrease production
  • benefits
Total revenue - Explicit costs - Implicit costs
  • costs
  • Economic profit
  • Characteristics of private goods
  • Drunk driving.
anyone
  • extra output associated with adding a unit of input
  • Once a public good is produced, _______ can enjoy it
  • Can I consume the same unit of product as others?
  • Goods are scarce therefore every good carries a price tag
Public goods, positive externalities
  • Demand-side Market Failure:
  • None of the above
  • Total Output / Units of Labor
  • Supply-side Market Failure:
under
  • Utility of a good or service is the ______ one gets from consuming it
  • one person's consumption of a good does not preclude consumption of the good by others.
  • A firm can provide quasi-public goods but they will be _______ produced
  • ________ riders problem, which means Those who do not pay can still enjoy the product
Average Product (AP)
  • Total Output / Units of Labor
  • change in total product / change in labor input
  • Characteristics of private goods
  • Change in TC / Change in Q =
Economies of scale
  • Total Output / Units of Labor
  • Large scale production means better use of management
  • Big plant - Low ATC
  • total quantity of output produced
free
  • ________ riders problem, which means Those who do not pay can still enjoy the product
  • Consumer has a fixed, limited amount of income therefore each consumer faces a _________
  • Goods are scarce therefore every good carries a price tag
  • one person's consumption of a good does not preclude consumption of the good by others.
Normal profit
  • the payments a firm must make to attract resource it needs away from alternative production opportunities (can be explicit or implicit)
  • the typical amount of accounting profit that you would mostly likely have earned in one of the firms in the same industry
  • Total amount of satisfaction from consuming a specific quantity
  • What curve shows all the combinations of products that will yield the same satisfaction or total utility to a consumer
Quasi-Public Goods (Mixed Goods)
  • the income you forgo by applying your entrepreneurial abilities to your current business
  • Government not only provides services for pure public goods but also provides services/products that could be produced and delivered in such a way that exclusion would be possible
  • What curve shows all the combinations of products that will yield the same satisfaction or total utility to a consumer
  • Firms do not get compensated for the benefit bestowed on third partyUnderproduction->DWL
explicit costs
  • monetary payments to those who supply resources (land, labor, capital, entrepreneurial ability).
  • there is no effective way of excluding nonpayers from benefit of the good once it comes into existence.
  • Effective use of a machine demands higher volume of production
  • cost/benefit of a good is passed on to someone other than the immediate buyer or seller (third party)
Diseconomies of scale
  • Accounting profit
  • benefits
  • Characteristics of private goods
  • Big plant - High ATC
Marginal product of labor
  • Large scale production means better use of management
  • Characteristics of (Pure) public goods
  • Change in TC / Change in Q =
  • change in total product / change in labor input
total product (TP)
  • Change in TC / Change in Q =
  • Total Output / Units of Labor
  • change in total product / change in labor input
  • total quantity of output produced
nonrivalry and nonexcludability
  • Characteristics of (Pure) public goods
  • change in total product / change in labor input
  • extra output associated with adding a unit of input
  • Large scale production means better use of management
Negative externality
  • The additional output generated by additional units of an input will diminish.
  • Government not only provides services for pure public goods but also provides services/products that could be produced and delivered in such a way that exclusion would be possible
  • Firms do not incorporate costs on third party into their cost of production Overproduction -> DWL> efficient Q (allocative)Misallocating resources: too many resources are allocated for this firm.
  • any resource that can be varied in the short run to increase or decrease production
scarce
  • Positive Externalities: D shifts ___
  • Costs exist because resources are ______.
  • Can I consume the same unit of product as others?
  • What curve reflects marginal cost incurred to a seller.
util
  • Drunk driving.
  • Can I consume the same unit of product as others?
  • unit of utility
  • Constant ATC
government, taxes
  • Solution: __________ provides public goods through _______
  • Consumer surplus ____________ when equilibrium price ____________.
  • Producer surplus ________ when equilibrium price _________.
  • Additional satisfaction from consuming additional unit.
nonexcludable
  • Total amount of satisfaction from consuming a specific quantity
  • If a firm offers this product, can it exclude those who do not pay?
  • one person's consumption of a good does not preclude consumption of the good by others.
  • What curve reflects marginal cost incurred to a seller.
right
  • Positive Externalities: D shifts ___
  • Costs exist because resources are ______.
  • No one pays, no_______ goods will be produced
  • Public goods are non_____ & non__________
marginal product (MP)
  • Total Output / Units of Labor
  • total quantity of output produced
  • extra output associated with adding a unit of input
  • Characteristics of (Pure) public goods
additional
  • monetary payments to those who supply resources (land, labor, capital, entrepreneurial ability).
  • Can I consume the same unit of product as others?
  • Additional satisfaction from consuming additional unit.
  • Marginal utility declines as consumers acquire ______ unit of a given product
Rivalry
  • Law of __________ is key to short run production costs
  • Those who are not willing to pay the price will be excluded from consuming the product.
  • a period long enough for a firm to adjust quantities of all resources including plant capacity. (It takes a long time to build a new plant.)
  • If one person consumes the product, the unit is not available to others.
Minimum Efficient Scale (MES)
  • the lowest level of output at which a firm can minimize long-run average costs
  • the income you forgo by applying your entrepreneurial abilities to your current business
  • The more we _____ of any good, the less _____ we get from each additional unit
  • The equilibrium market price is below what some consumers are willing to pay for the product.
Rational Behavior
  • Consumer has a fixed, limited amount of income therefore each consumer faces a _________
  • there is no effective way of excluding nonpayers from benefit of the good once it comes into existence.
  • Firms do not incorporate costs on third party into their cost of production Overproduction -> DWL> efficient Q (allocative)Misallocating resources: too many resources are allocated for this firm.
  • The consumer tries to use his money income to derive the greatest amount of satisfaction or happiness
marginal utility
  • change in total product / change in labor input
  • Additional satisfaction from consuming additional unit.
  • Change in TC / Change in Q =
  • extra output associated with adding a unit of input
Indifference Curve
  • the typical amount of accounting profit that you would mostly likely have earned in one of the firms in the same industry
  • What curve shows all the combinations of products that will yield the same satisfaction or total utility to a consumer
  • Consumer has a fixed, limited amount of income therefore each consumer faces a _________
  • What curve reflects marginal cost incurred to a seller.
Demand curve
  • Producer surplus ________ when equilibrium price _________.
  • What curve reflects marginal benefit received by a consumer.
  • the income you forgo by applying your entrepreneurial abilities to your current business
  • This is a _____-side market failure
specialization, division of labor
  • Supply-side Market Failure:
  • Demand-side Market Failure:
  • change in total product / change in labor input
  • Increasing marginal returns due to_________.
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