lesson 6-9, part of 10

Question 1

What does the price of a good represent?

Answer 1

The amount of money the buyer has to spend to buy it from the seller.

Question 2

What is a cost to a producer?

Answer 2

The amount of money the seller has to spend to produce a good.

Question 3

What is total cost (TC)

Answer 3

The cost of producing a certain quantity of units of a good.

Question 4

What is a fixed cost?

Answer 4

Costs that do not vary with the quantity of units produced.

Question 5

What is a variable cost. (VC)

Answer 5

Costs that vary with the quantity of units produced.

Question 6

What is marginal cost? (MC)

Answer 6

The cost of producing one more unit of a good.

Question 7

What is the Law of diminishing Marginal returns?

Answer 7

With fixed input, and an increasing variable input, at some point the marginal product of the variable input must decline.

Question 8

What is a Marginal product?

Answer 8

The additional output produced when one more unit variable input is added.

Question 9

What does increasing marginal return mean?

Answer 9

The range of input usage over which marginal product increases.

Question 10

What is diminishing marginal returns?

Answer 10

The range of input usage over which marginal product decreases.

Question 11

What does Average Total Cost mean?

Answer 11

The total coast divided by the quantity of units produced.

Question 12

What are the Average Fixed Costs?

Answer 12

The Total Fixed Cost divided by the quantity of. units produced.

Question 13

What is the Average Variable Costs mean?

Answer 13

The total variable costs divided by the quantity of units produced.

Question 14

What is the Short run mean?

Answer 14

The time horizon where some inputs are fixed and some are variables.

Question 15

What does the Long Run mean?

Answer 15

The time horizon where all inputs are variable.

Question 16

What does the range of economies of scale mean?

Answer 16

The range where long run average total costs decrease as output increases.

Question 17

What is the range of diseconomies of scale mean?

Answer 17

The range where long run average total costs increase as output increases.

Question 18

Why is the range of constant returns of scale?

Answer 18

The range where long run average total costs stay constant as outputs increases.

Question 19

What does the optimal firm size mean?

Answer 19

The quantity of production that minimizes long run average total costs.

Question 20

What are the two assumptions for perfect competition?

Answer 20

Zero transaction costs
No coercive barriers to entry

Question 21

What are transaction costs?

Answer 21

Any costs of going through with an exchange transaction, other than the price of the good itself (shipping)

Question 22

What is a coercive barrier to entry?

Answer 22

The use or threat of force to prevent others from offering their products for sale to the same customers.

Question 23

What is Total Revenue?

Answer 23

The amount of money a seller receives in exchange for their products.

Question 24

What is marginal revenue?

Answer 24

The additional revenue a seller gets from selling one more unit of a good.

Question 25

What does profit mean?

Answer 25

The difference between a firms total revenue and total cost (PI = TR - TC)

Question 26

What does accounting profit mean?

Answer 26

The total revenue minus explicit cost.

Question 27

What is the explicit cost mean?

Answer 27

The amount of money spent on all inputs to a production process.

Question 28

What is economic profit?

Answer 28

Total revenue minus explicit cost and implicit cost.

Question 29

What does a implicit cost mean?

Answer 29

The opportunity cost of the money spent on all inputs to a production process.

Question 30

What are intermediaries?

Answer 30

A person who facilitates an exchange.

Question 31

What is the Private marginal cost mean?

Answer 31

The cost the supplier bears when it produces one more unit of a good.

Question 32

What is the social marginal cost?

Answer 32

The cost that everyone in society bears when the supplier produces one more unit of a good.

Question 33

What is the Non-excludable good?

Answer 33

A good that people can consume even without paying for it.

Question 34

What is the Free rider problem?

Answer 34

The problem that when a good is non-excludable people have an incentive to consume it but not pay for it.

Question 35

what is a market failure viewpoint?

Answer 35

Observed inefficiency in a market system a failure of the market to achieve an efficient outcome.

Question 36

What is the market process?

Answer 36

A free market system is best understood as an outgoing process in which entrepreneurs seek profits by eliminating inefficiency

Question 37

What does consumer sovereignty mean?

Answer 37

The power of commoners to decide that gets produced.

Question 38

What is the marginal revenue productivity theory of wages?

Answer 38

The theory that in a competitive market a workers wage is determined by that workers marginal revenue product.

Question 39

In the shift of the labor demand curve, what is capital accumulation?

Answer 39

Increasing the amount of tools, machines, education, and other goods that make workers more productive.

Question 40

What is a union?

Answer 40

A group of workers, who voluntarily join together to bargain with their employer as a team.

Question 41

What is a strike?

Answer 41

When employees stop working until their employer grants certain demands.

Question 42

In factors that affect capital accumulations, what is deferred consumption mean?

Answer 42

Consuming less in the present in anticipation of consuming more in the future.

Question 43

What is public choice economics mean?

Answer 43

economic analysis of the political process.

Question 44

What are the three voting rules?

Answer 44

Plurality(win by most votes) Majority rule with runoff election, if no majority then their is a second election. Borda Rule- (Preference lists)

Question 45

When will a person vote?

Answer 45

When the have a higher incentive to vote by, civic duty, net candidate differential, and probability of decisiveness.

Question 46

What is Rational ignorance?

Answer 46

When a person is ignorant because the cost of gaining additional information would outweigh the benefit.

Question 47

what does rent-seeking mean in the government?

Answer 47

Using government coercion to seek benefits at the expense of other people.