1. When entering a building, Sam diverts… • C. Marginal benefit-marginal cost analysis 2. A production possibilities curve shows… • C. The maximum amounts of two goods that can… 3. Increasing marginal cost of production explains… • C. Why the supply curve is upsloping… 4. The location of the product supply curve depends on… • A. Production technology 5. Because of unreasonably cold weather, the supply of oranges… • C. The amount of oranges that will be available at various… 6. Assume
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• • • • Many Buyers & Many Sellers Products are Homogeneous Perfect knowledge of competitors activities ‐ i.e. symmetrical knowledge Firms are Price Takers not Price Maker • • • • Freedom of Entry and Freedom to Exit All PC firms face the same costs Price = Demand = AR= MR. Firms make an economic profit Or an economic loss • No barriers to entry Examples: The spot market for crude oil & spot market for Henry Hub natural gas. Both markets tend to approximate perfect competitive behaviour
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the line is A) 3. B) 4. C) 12. D) 48. 4) Suppose that your tuition to attend college is $16,000 per year and you spend $6,000 per year on room and board. If you were working full time, you could earn $20,000 per year. What is your opportunity cost of attending college for one year? A) $22,000 B) $26,000 C) $36,000 D) $42,000 5) The principle of diminishing returns implies that as one input increases while the other inputs are held fixed, output A) increases at an increasing rate. B)
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1) In monopolistic competition, there are a relatively large number of firms, not the thousands of firms as in pure competition. The monopolistically competitive firms produce differentiated products, not the standardized products of pure competition. Product differentiation means that monopolistic competitors engage in some price competition because they have some limited “price making” ability based on the less elastic demand for their particular product. This demand, however, is more elastic than
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operation - we get the cost K = f(q); L = f(q) Front office - where we are selling the stuff. = > We start from Demand, which is exogenous to the model. Q = f(P). In the end we get - Total Revenues. Owner is going to decide how much to produce to maximize profits. Isoquant (IQ) = equal quntity along the line. Here the constraint is C = wL + rK - ISO Cost line C = w(f1Q) + r(f2Q) MRTS = -MPL/MPK = w/r Demand function - Q = f(P) / Revenue = P(Q) Marginal Revenue = dR/dQ
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being allowed to go forward. The firms hope to complete the transaction in the fourth quarter of 2010. According to the management of United and Continental, the proposed merger will generate streamlined service and greater efficiencies that result in cost savings and revenue increases, helping the newly merged firm return to profitability. However, critics note that the merger will involve the consolidation of two competing firms; whenever you have
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• Which of the 10 principles do you think plays a major role in your decision? The cost of something is what you give up to get it. Buying a house is a big step to take and with it comes lots of responsible that you have to consider. This is where you find out that you will have to give up something’s in order to save for it. You have to budget yourself with everything you spend money on. Buying a house is something that will take some time to do, it’s not that easy to just say that you are going
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Notes on Microeconomic Theory: Chapter 9 P ver: Aug. 2006 P0 A B D Q0 Q Figure 9.1: The Monopolist’s Marginal Revenue In order for the solution to be unique, we need the objective function to be strictly concave (i.e. d2 π dq2 < 0). The second derivative of profit with respect to q is given by d2 (p (q) q − c (q)) = p00 (q) q + 2p0 (q) − c00 (q) . dq 2 If cost
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Market Demand Carlos Lopez Grantham University Market Demand The market demand at the beginning is D1, and its corresponding marginal revenue is MR1. The initial ATC is ATC1, and the original supply is MC1. Therefore, the monopolist sells (10) units at $ (about 27) per unit. The monopolist will sell at a quantity where MR=MC, but since demand is actually higher at that point, they can sell for a higher price. The price is found
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Mutilda Jean 9/27/15 Economics Product market Quantity | Price(in whole dollars) | Total Revenue | Marginal revenue | Total cost | Marginal cost | Profit(or loss) | | | | | | | | 0 | 42 | 0 | 0 | 35 | 35 | -35 | 1 | 41 | 41 | 41 | 68 | 33 | -27 | 2 | 40 | 80 | 39 | 94 | 26 | -14 | 3 | 39 | 117 | 37 | 107 | 13 | 10 | 4 | 38 | 152 | 35 | 114 | 7 | 38 | 5 | 37 | 185 | 33 | 129 | 56 | 56 | 6 | 36 | 216 | 31 | 180 | 36 | 36 | 7 | 35 | 245 | 29 | 235 | 10 | 10 |
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