Ferrell's Final Exam Flashcards
(216 cards)
1
Q
Who is the superstar of Price Theory?
A
Marshall
2
Q
This is a form of a Natural Monopoly?
A
Price Decreasing Industry
3
Q
Where does the monopolist want to operate?
A
Above the min AC
4
Q
Homogeneity, Free enterprise and Market price are assumptions of which model?
A
Perfect Competition
5
Q
The inflection point of the TC function is called what?
A
min MC
6
Q
Where is the slope of the vector from the origin= slope of the TC function?
A
Min AC
7
Q
A factor good is used in the production of what?
A
Another Good
8
Q
A constant cost remains the same regardless of the number of units produced (T/F)
A
True
9
Q
A fixed cost is only incurred when you increase the level of production (T/F)
A
False
10
Q
A business with the absence of external tariffs or absence of internal tariffs is called?
A
Free Trade Area
11
Q
This is a model that describes for whom the economy produces
A
Distribution Theory
12
Q
The thing that A (one person or country) does better than B (another person or country), relative to everything else that A does is called
A
Comparative Advantage
13
Q
The typical farmer prefers which type of program?
A
Government Purchase
14
Q
Those concerned with the price of the food prefer which type of program?
A
Price Differential
15
Q
Who believed in optimal theory?
A
Pareto
16
Q
A market that permits free entry and exit by buyers and sellers is called?
A
Free enterprize
17
Q
To tie or connect a commodity to money is called?
A
monetize
18
Q
An increase in price followed by an increase in quantity demanded is called?
A
Reverse Substitution
19
Q
The demand line for an item represents the total quantity purchased (T/F)
A
False
20
Q
A business with an output that weighs significantly less than the raw materials used to manufacture is called?
A
Weight Decreasing Industry
21
Q
Veblen’s thesis that some goods are preferred to others because of their social implication is called?
A
Conspicuous Consumption
22
Q
An analysis that considers all variables over a time series is called Static (T/F)
A
False
23
Q
Numbers that assign rank are called?
A
Ordinal
24
Q
Who invented the concept of Arbitrage?
A
Keynes
25
Name the economist who contributed the concept of Negative Income Tax
Fridmen
26
Who wrote the Theory of the leisure Class?
Veblen
27
An increase in price will cause the MU/P ratio to increase (T/F)
False- Less bang for the buck
28
Numbers that assign specific value are called
Cardinal
29
Business Cycles
Marx
30
Quantity Theory of Money
Hume
31
Diminishing Marginal Utility
Menger
32
A good or service used by the business sector is called?
Investment Good
33
Classical economists believed in government intervention (T/F)
False
34
What year did the Industrial Revolution take place
1750
35
If I buy a low-priced computer, but now I have additional features (like the internet), and can only get them from the original seller, what kind of sale is this?
Tie-in-sale
36
What is the shut-down point?
TR=VC
37
Fixed supply is when quantity supplied remains the same regardless of price
True
38
What is the break-even point?
TR=TC
39
The condition that exists when no one can be made better off without making someone worse off is called?
Optimality Theory
40
A is preferred to B and B is preferred to C, therefore A is preferred to C represents which assumption?
Transitivity
41
What kind of function is an indifference curve where the quantity of what you're measuring is the same regardless of where you are on the curve?
Isoquant
42
Ordinal Utility Analysis uses the law of?
Substitution
43
Who is the superstar of Ordinal Analysis?
Edgeworth
44
Ordinal analysis measures what?
Rank
45
What is a good or service used by the household sector called?
Consumption Good
46
A guarantee of a specific outcome is called a necessary condition (T/F)
False- Sufficient
47
What is the slope of 6x-2 +10
-12x-3
48
Marxism is distribution according to need, meritocracy is the distribution according to
Scarcity
49
Any quantity of production beyond the minimum point on the MC function is called?
Area of Increasing Marginal Cost
50
What is a French mercantilist called?
Colberist
51
Assume that TU=900q-9q2. Find MU
900-18q
52
Name 3 great utilitarians
Mill, Mill Senior, Bentham
53
Any quantity of production before the point of diminishing returns is called?
Area of decreasing Marginal Cost
54
Consumer Surplus, Theory of the Firm
Marshall
55
Capitalism will lead to democratic socialism
Schumpeter
56
Concept of demand, Father of European Stock Market
Monnett
57
Law of Comparative Advantage
Ricardo
58
Any quantity of production beyond the point of diminishing returns is called the area of increasing Marginal Cost (T/F)
True
59
What are the necessary conditions of an enforceable agreement?
Offer, Acceptance, Consideration
60
TC divided by number of units produced (q) equals AC (T/F)
True
61
What is the first degree of Price discrimination?
Perfect Price
62
Quotas, import licenses, and exchange controls are all examples of?
Non-Tariff Trade Barriers
63
Quotas on manufactured goods protect whom?
Domestic producer
64
Profits and losses, revenues and expenses, and depreciation are all reported on a company's
Income Statement
65
The financial statement that reports the company's position as of a single date is called?
Balance Sheet
66
Patents are what kind of assets?
Intangible Assets
67
Buildings, equipment, etc, are what kind of assets?
Fixed
68
A company's reputation, location, and management team are examples of what kind of intangible assets?
Good will
69
Assets minus liabilities equal
Net worth
70
Cash and Accounts Receivable
Current
71
Land, Buildings, Equipment
Fixed
72
Patents, copyrights, goodwill
Intangible
73
If the net worth of a company is negative, the firm is said to be
insolvent
74
Can your opportunity costs go on your income statement as an expense?
No
75
The absence of non-economic barriers to leaving a market is called
Free Exit
76
A dutch auction is where the seller reserves the right to influence the price (T/F)
False
77
A good for which the elasticity of demand is less than one is called?
A necessity
78
What 3 countries are in the European community BENELUX?
Belgium, Netherlands, Luxembourg
79
Who is the father of the European community BENELUX
Monnett
80
The time it takes to change all factors of production
Long-Run
81
The amount of accounting profit required to maintain a business without attracting competitors is called
Normal Profit
82
Output is called what?
Production
83
Economic rent is payment to what?
Factor of production
84
A function that shows how much of one good it takes to make someone ambivalent to a given amount of some other good is called
Indifference Curve
85
An oligopsony is a few sellers (T/F)
False- Few buyers
86
This is called an enforceable agreement
Contract
87
Latin term for "this for that; something for nothing"
Quid pro quo
88
The price at which quantity supplied equals quantity demanded
Equilibrium price
89
Utility recieved but not paid for is called
Consumer Surplus
90
What is Consumer Surplus called by Pareto?
Welfare Triangle
91
Terms of trade is the Ricardian name for
Market Price
92
Both the ability and willingness to pay the current market price is called?
Effective Demand
93
The definition of production is
output
94
Productivity is
output per unit of input
95
The frontier line of maximum output possible when all available factors of production are fully employed at their highest and best use is called what?
Production Possibilities Curve (PPC)
96
Equilibrium Theory
Walras
97
Study of Natural Laws
Menger
98
Wage Fund Doctrine
Ricardo
99
Income Redistribution
Paredo
100
The ability and willingness to enter the market at some specific price is a sufficient condition (T/F)
False- Necessary
101
The ability and willingness to enter the market at some specific price is?
Demand
102
A premium in excess of economic rent paid to a factor of production
Quasi rent
103
Output per unit input is called
productivity
104
Quantity demand is a function of
Price
105
Describe productivity when proportional increases in input correspond to an output increase from 100 to 150 to 175
Decreasing Return to Scale
106
When quantity demanded is fixed at all levels, what is the elasticity of this good?
Totally Inelastic
107
When the price of fish goes down and quantity demanded decreases, what kind of effect is this?
Reverse income effect
108
What is utility a measure of?
Satisfaction
109
What kind of effect is it when the price of a good decreases and more of it is demanded?
Income effect
110
Market price is the competitively arrived at price of a number of goods, in one place, at one time (T/F)
False- one good, one price, one time
111
FC+VC=
TC
112
Customs duty on goods transported between members of an economic area
Internal Tariff
113
When all factors of production are being used at their highest level of production?
Capacity point
114
A few sellers
Oligopoly
115
This is the study of individual markets, prices, and firms
Microeconomics
116
The economic philosophy based on the premise that precious metal is wealth is called
Mercantilism
117
A business that is located with out regard to the factors of production is called
Footloose
118
An essential requirement for a specific outcome is called
Necessary condition
119
A function which continuously approaches a line or axis without meeting it at any finite distance is called
asymptote
120
Which economist has a stagnatist graph?
Ricardo
121
Who created Sunspot Theory?
Jevons
122
When two lines on a graph touch but do not cross, they are said to be
Tangent
123
What one does better than others is called
Absolute Advantage
124
An introspective unit of satisfaction is called the Law of Demand (T/F)
False
125
This is a straight line drawn from an initial point assumed to be the origin
Vector
126
A lawyer prepares a contract for his client in August 1998. This action is properly accounted for in 97-98 GNP. (T/F)
True
127
A factor that emits pollution in a neighborhood stream as a by-product of its production is creating a what?
External Diseconomy
128
If 2 goods were perfect complements, the indifference curve would be
Right Angle
129
As output increases AFC will remain constant (T/F)
False
130
Verbally describe the elasticity at the midpoint of a linear demand line, which extends to both axis
Unit Elastic
131
A tax on salt would fall on the consumer (T/F)
True
132
If one firm in an oligopolistic industry raises prices, most firms will follow (T/F)
False
133
If a perfect competitor produces where MR=MC=AC, excess profit must be
Zero
134
In indifference curve A is to the right of indifference curve B, it will be preferred by the consumer. This represents what mathematical assumption?
Rationality
135
According to Ricardo, what factor is the source of all value?
Labor
136
Ricardo was not a proponent of import tariffs (T/F)
True
137
Ricardo, like Marx, was a student of business cycles (T/F)
False
138
A good or service which has 2 characteristics of which both are necessary conditions is called
Normal Good
139
What is a good that is bought in larger quantities as income increases called?
Superior Good
140
If demand for wheat is totally elastic, the buyer is a price maker (T/F)
True
141
This is horizontal aggregation of MC functions beyond the point of diminishing returns for all member firms in a market is called
Supply Curve
142
What is the ultimate burden of tax called?
Incidence of tax
143
The notion that consumers derive less satisfaction with each unit of wealth
Diminishing MU
144
This is a product standardized by government regulation or industrial convention
Homogeneous Products
145
Monopolists operate in the long run or short run?
Short Run
146
Where does perfect knowledge take place?
Long-Run
147
As price falls, does the Welfare Triangle increase or decrease?
Increase
148
The MC function intersects the minimum point of what?
Min AC
149
In Perfect Competition, what is assumed about excess profits, where there is equilibrium?
Zero
150
```
Monopolists left to their own accord would want ⬆️ or ⬇️
Price
Quantity
Surplus
Average Cost
Excess Profit
```
```
Price⬆️
Quantity ⬇️
Surplus ⬇️
Average Cost⬆️
Excess Profit ⬆️
```
151
Classical factors of production
Land labor and capital
152
Primary factors of production
Land and Labor
153
Land and Labor exists
A priori- At the outset
154
Secondary factor of production
Capital
155
Classical economists believe that wealth is created by which factor?
Labor
156
Labor is represented by what shaped supply curve?
Convex
157
The Clayton Anti-Trust Act is the 1890 law that makes monopolistic restraint of trade illegal (T/F)
False-The Clayton antitrust act was passed in 1914 which authorized federal judges to issue preliminary injunction’s when they hear evidence that the Sherman Antitrust act has been violated
158
An Asymptote found by dividing FC by the number of units produced
AFC
159
The buyer is the price taker if demand is totally inelastic (T/F)
True
160
This is when all physical characteristics are identical
Homogeneous
161
Demand is the function of?
utility
162
Quantity Demanded is the function of
Price
163
Effective Demand is a ______ condition of a market transaction
Sufficient
164
Demand is a ____ condition
Necessary
165
A cost that is zero at zero production and increases as production increases
VC
166
The point on a TU function where satisfaction is maximized
Satiation Point
167
The Latin term for “all else remains constant”
Ceteris Paribus
168
This is the Act that forbids predatory pricing
Robinson-Patman Act
169
What is the numerical description of Unit Elastic?
1
170
The act of inducing different buyers to pay different prices for the same good
Price Discrimination
171
This is an agent of the seller
Shill
172
X/0=
Infinity
173
Which function of ordinal analysis does Arrow’s theorem explain?
Transitivity
174
Name the two lines that separate the quadrants of a graph
Axis
175
A value measured on the x axis is called ____, while a value measured on the y axis is called ____.
Abscissa
| Ordinate
176
When is a firm said to be insolvent?
When net worth is negative
177
When is it from said to be illiquid
When current liabilities are greater than current assets
178
In accounting, what does the term “liquid” mean?
Convertible to cash
179
What kind of an asset is goodwill?
Intangible
180
Gross profit less operating expenses plus other revenues equals what?
Net income
181
This is a dynamic profit and loss report of the flow of income over a period of time
Income statement
182
This is a static report of a firms stock of assets and liabilities at a point in time
Balance sheet
183
The use of a capital good is considered an expense (T/F)
True-Depreciation expense
184
And indifference curve approaches but does not touch either axis, therefore this curve represents an
Asymptote
185
Concave indifference curve represents both
Addiction and tolerance
186
More is preferred to less is what theory?
Rationality
187
If the price of an inferior good is increased and you buy more of it, this is called a
Reverse substitution
188
If TU is increasing, consumption is ____ and MU is ____.
Increasing and Decreasing respectively.
189
When TU begins to decrease with consumption, MU starts to become positive or negative?
Negative
190
Paying an employee to produce nothing, to sleep on potato sacks, also known as disguised unemployment:
Featherbedding
191
First crop limitation is called:
Soil banking
192
What is the name of the law that allows the government to sell surplus grains to poor countries?
Public law 480
193
How do public law 480 countries pay for the grains?
Counterpart Funds
194
What is the government purchase program equation?
Parity price times change in Q
195
What is the equation for price differential?
Qe times change in price
196
What is the equation for TR
P times Q
197
Just price just wage
Saint Thomas Aquinas
198
Lyceum
Aristotle
199
Indifference Curve
Edgeworth
200
Social Security should be replaced by negative income tax
Friedman
201
Quantity theory of money
Hume
202
Scissor analogy/supply demand
Marshall
203
He said, “economics is an engine for the discovery of concrete truths”
Marshall
204
Das Kapital/ Business cycles
Marx
205
Theories of utilitarian and utility
Mill
206
founded the academy
Plato
207
Physiocracy
Quesnay
208
Classical rent doctrine/labor theory of value
Ricardo
209
Capitalism will lead to democratic socialism
Schumpeter
210
Wealth of Nations/invisible hand doctrine
Smith
211
Equilibrium Theory
Walras
212
What is the equation for finding the current value of a bond?
CV= R/r
213
What is the order of the queue?
PST or price size time
214
Cardinal
Value
215
Ordinal
Rank
216
3 degrees of price discrimination
Perfect price
Quantity discounts
Market separation
