definitions

Question 1

subject that deals with allocation od scarce reasources

Answer 1

economics

Question 2

cost of next best alternative what must be given up to optain what one has

Answer 2

opportuninty cost

Question 3

applied microeconomics in which it applies economic theory and methodology to business decision making

Answer 3

managerial economics

Question 4

quanty of a good or service people are willing and able to purchase during a specified time

Answer 4

demand

Question 5

individual demand

Answer 5

1 person

Question 6

individual demand pooled together

Answer 6

market demand

Question 7

horizontal summation of individual demand

Answer 7

market demand

Question 8

state of balance

Answer 8

market equilibrium

Question 9

demand changes if price changes

Answer 9

elastic

Question 10

demand remains constant even if price chage

Answer 10

inelastic

Question 11

entire output from a given production system

Answer 11

total product

Question 12

avg contribution per worker

Answer 12

avg product

Question 13

as increasing quantities of a variable input are added to fixed input in the production process, output must eventually decline

Answer 13

diminishing returns

Question 14

rate of change

Answer 14

slope

Question 15

cost that do not vary with output

Answer 15

fixed cost

Question 16

cost that fluctuates with output

Answer 16

variable cost

Question 17

a line that a graph gets closer to as it extends toward infinity (or negative infinity) or a specific point but never reaches.

Answer 17

asymptotic

Question 18

refer to the cost advantages that a business experiences as it increases production. Essentially, the average cost per unit of output decreases as production scales up because fixed costs are spread over a larger number of goods, and operational efficiencies improve.

Answer 18

Economies of scale

Question 19

competitive environment in the market for any good or service. it influences market behaviour

Answer 19

market structure

Question 20

a single seller of a highly differentiated product

Answer 20

monopoloy

Question 21

market dominated by a few sellers

Answer 21

oligopoly

Question 22

measures how much of the total output in an industry is produced by the largest firms in that industry

Answer 22

concentration ratio

Question 23

fraction of the total industry sales produced by 4 largest firms in the industry

Answer 23

C4 ratio

Question 24

the sum of the squared market shares on the firms given industry mulitplied by 10k to eliminate the decimals

Answer 24

Herfindahl Hirchman index

Question 25

simply involves a markup over the average cost of acquiring or producing a product.

Answer 25

Cost plus pricing

Question 26

practice of bundling several different products together and selling them at a single bundle price

Answer 26

Commodity bundling

Question 27

pricing strategy in which profits gained from the sale of one product are used to subsidize sales of a related product

Answer 27

Cross – subsidy

Question 28

pricing strategy in which a firm sets an internal price at which an upstream division sells an input to a downstream division.

Answer 28

Transfer pricing

Question 29

a strategy in which a firm advertises a price and a promise to match any lower price offered by a competitor

Answer 29

Price-matching

Question 30

a pricing strategy in which customers are charged a fixed fee for the right to purchase a product, plus a per unit charge for each unit purchased.

Answer 30

Two part pricing

Question 31

arises when different customers are charged different prices for the same product, and these different prices are NOT as a result of cost differences.

Answer 31

Price Discrimination

Question 32

called perfect price discrimination and involves charging different prices to each customer. Requires that sellers know the maximum amount that each buyer is willing to pay for each unit of output.

Answer 32

First Degree Price Discrimination

Question 33

Charging different prices based on use rates or quantities purchased.

Answer 33

Second degree Price Discrimination

Question 34

this is the most commonest form of PD. Involves segmenting customers into different groups, based on common characteristics including but not limited to age, gender, time of purchase etc.

Answer 34

Third degree Price Discrimination