Econ Final

Question 1

collective bargaining

Answer 1

the process by which unions and firms agree on the terms of employment

Question 2

cyclical unemployment

Answer 2

the deviation of unemployment from its natural rate

Question 3

discouraged workers

Answer 3

individuals who would like to work but have given up looking for a job

Question 4

efficiency wages

Answer 4

above-equilibrium wages paid by firms to increase worker productivity

Question 5

frictional unemployment

Answer 5

unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills

Question 6

job search

Answer 6

the process by which workers find appropriate jobs given their tastes and skills

Question 7

labor force

Answer 7

the total number of workers, including both the employed and the unemployed

Question 8

labor-force participation rate

Answer 8

the percentage of the adult population that is in the labor force

Question 9

natural rate of unemployment

Answer 9

the normal rate of unemployment around which the unemployment rate fluctuates

Question 10

strike

Answer 10

the organized withdrawal of labor from a firm by a union

Question 11

structural unemployment

Answer 11

unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one

Question 12

unemployment insurance

Answer 12

a government program that partially protects workers’ incomes when they become unemployed

Question 13

unemployment rate

Answer 13

the percentage of the labor force that is unemployed

Question 14

union

Answer 14

a worker association that bargains with employers over wages, benefits, and working conditions

Question 15

natural monopoly

Answer 15

a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms

Question 16

monopoly

Answer 16

a firm that is the sole seller of a product without close substitutes

Question 17

price discrimination

Answer 17

the business practice of selling the same good at different prices to different customers

Question 18

accounting profit

Answer 18

total revenue minus total explicit cost

Question 19

average fixed cost

Answer 19

fixed cost divided by the quantity of output

Question 20

average total cost

Answer 20

total cost divided by the quantity of output

Question 21

average variable cost

Answer 21

variable cost divided by the quantity of output

Question 22

constant returns to scale

Answer 22

the property whereby long-run average total cost stays the same as the quantity of output changes

Question 23

diminishing marginal product

Answer 23

the property whereby the marginal product of an input declines as the quantity of the input increases

Question 24

diseconomies of scale

Answer 24

the property whereby long-run average total cost rises as the quantity of output increases

Question 25

economic profit

Answer 25

total revenue minus total cost, including both explicit and implicit costs

Question 26

economies of scale

Answer 26

the property whereby long-run average total cost falls as the quantity of output increases

Question 27

efficient scale

Answer 27

the quantity of output that minimizes average total cost

Question 28

explicit costs

Answer 28

input costs that require an outlay of money by the firm

Question 29

fixed costs

Answer 29

costs that do not vary with the quantity of output produced

Question 30

implicit costs

Answer 30

input costs that do not require an outlay of money by the firm

Question 31

marginal cost

Answer 31

the increase in total cost that arises from an extra unit of production

Question 32

marginal product

Answer 32

the increase in output that arises from an additional unit of input

Question 33

production function

Answer 33

the relationship between quantity of inputs used to make a good and the quantity of output of that good

Question 34

profit

Answer 34

total revenue minus total cost

Question 35

total cost

Answer 35

the market value of the inputs a firm uses in production

Question 36

total revenue (for firm)

Answer 36

the amount a firm receives for the sale of its output

Question 37

variable costs

Answer 37

costs that vary with the quantity of output produced