Review Chapters 1 & 2
|
|
- Alison Baldwin
- 5 years ago
- Views:
Transcription
1 Review Chapters 1 & 2 ECON 1 Midterm 1 Review Session Scarcity or No Free Lunch Principle. Cost-Benefit Principle. Reservation Price. Economic Surplus = Benefit Cost. Opportunity Cost (DO NOT FORGET!!). Sunk Cost (DO NOT FORGET!!). Oct. 7 th, 2002 ECON 1 MT1 Review Session Page 1 ECON 1 MT1 Review Session Page 2 Review Chapters 1 & 2 (cont d) Review Chapters 1 & 2 (cont d) Remember: Cost-Benefit Principle: Keep doing it if MB > MC Or in another words, if Economic Surplus = BENEFIT COST > 0. DO NOT FORGET OPPORTUNITY COST OF FORGONE ACTIVITY!!!!! PV: Amount we put in the bank today to earn M at a future time T with given interest rate r. PV = M /( 1+ r) T So, PV and M depend on r and T. ECON 1 MT1 Review Session Page 3 ECON 1 MT1 Review Session Page 4 Review Chapters 1 & 2 (cont d) Marginal vs Average Average costs: TC / Q Average benefits: TB / Q Marginal costs: additional costs of adding a unit Marginal benefits: additional benefits of adding a unit Optimal output: where MB = MC This maximizes economic surplus (benefit -cost). Three way to ensure a bad grade: Ignore Opportunity Costs Fail to Ignore Sunk Costs Use Average rather than Marginal Review Chapters 4 & 5 Supply Curve (slope, what is plotted) Demand Curve (slope, what is plotted) S & D diagram (labeling of axes) Equilibrium Disequilibrium (ES, ED, P vs equilibrium P) Free market equilibrium P (efficiency; MB=MC; social optimum) Government Intervention (ceiling, floor: examples, who likes each) Movement Along vs Shift of D & S curves (technology, regulation, input price, complements, substitutes) ECON 1 MT1 Review Session Page 5 ECON 1 MT1 Review Session Page 6
2 Supply: Curve showing the total quantity of a good that sellers wish to sell at each price. Trick: Think in marginal cost. Demand: Curve showing the total quantity of a good that buyers wish to buy at each price. Trick: Think in income. Utility: Satisfaction consumers derive from activities. Rational Spending Rule: Spending allocated across goods so MU per dollar (MU / P) is same for each good. Total Expenditure = P*Q = Total Revenue (TR). Price elasticity of demand: percentage change in quantity demanded divided by percentage change in price. Q P Q / = Q P P P * Q ECON 1 MT1 Review Session Page 7 ECON 1 MT1 Review Session Page 8 Trick for elasticity: Elastic. Inelastic. Remember: Utility Maximization: allocation of time and income to maximize satisfaction. Marginal Utility: Additional utility gained from consuming one additional unit of a good. Rational Spending Rule: Ratio of marginal utility to price must be the same for each good the consumer buys. MUc MUs = Pc Ps ECON 1 MT1 Review Session Page 9 ECON 1 MT1 Review Session Page 10 Remember: Law of Diminishing Marginal Utility: when consumption of a good increases beyond some point, MU of each additional unit declines (Assumption based upon observation). ECON 1 MT1 Review Session Page 11 Also: GOOD PRICE ELAST. SUBSTs.? TR? Elastic >1 Yes if P Inelastic <1 Few if P Price elasticity of demand relatively high if substitutes are readily available. If share of budget is high (big ticket items), have higher price elasticity of demand Timeframe: Price elasticity is higher in long run than in short run, since substitutions can be made. ECON 1 MT1 Review Session Page 12
3 Review Chapter 6 Perfectly Competitive Market: no individual supplier has influence on market price of product (price taker). Competitive market has many sellers with free entry and exit. The Demand Curve Facing Perfectly Competitive Firm Review Chapter 6 (cont d) How much to produce? Firm should increase output if MB = MR > MC For perfectly competitive firm MR = P, So choose output where P = MC Changes in Suppply (other than P): Technology (important long-run determinant) Input Prices (important short-run determinant) Expectations about future prices Changes in prices of other possible products to supply Profit Maximization Profit: total revenue (P * Q) minus total costs. ECON 1 MT1 Review Session Page 13 ECON 1 MT1 Review Session Page 14 Review Chapter 6 (cont d) Remember: Price elasticity changes along a straight-line demand curve (see F&B page 127). A = P Q * 1 slope GOOD PRICE ELAST. TR? Elastic >1 if P Inelastic <1 if P Review Chapter 7 Total economic surplus = Consumer Surplus + Producer Surplus. Free markets promote efficiency. Maximize output at minimum cost. Pareto efficient outcome: No change is possible that will help some people without harming others. Price Ceilings and price floors effect on economic surplus. ECON 1 MT1 Review Session Page 15 ECON 1 MT1 Review Session Page 16 Review Chapter 8 Economic rent. Payment to factor of production that exceeds owner s reservation price. In the long run, economic rent accrues to inputs that cannot be reproduced easily (entry is constrained and supply not competitive). Short-run rents are windfalls (like cost saving innovations). Invisible Hand: Resources flow to markets in which economic profit is positive and out if is negative. Perfectly Competitive Firm. Price taker: firm that must take market price. Imperfectly Competitive Firm. Price setter: firm with some latitude to set its own price Essential Difference: D curve. Perfectly competitive firm: perfectly elastic demand curve at market P. Higher P: cannot sell output Lower P: no advantage in selling output ECON 1 MT1 Review Session Page 17 ECON 1 MT1 Review Session Page 18
4 Price For any firm, in the long run economic profit=0, P=MC=min AC. Industry supply curve adjusts (free entry and exit) until zero profits (lowest cost to society), which is a P where MC=AC for the firm. MARKET (long run) Price ANY FIRM (long run) S A =MC A Imperfectly competitive: Firm faces downward-sloping demand curve Charging a price different from competitors may be advantageous P Q S P D A D Quantity Q A Quantity AC ECON 1 MT1 Review Session Page 19 ECON 1 MT1 Review Session Page 20 Economies of Scale!!!!!. Average cost of production falls as output increases High start-up costs relative to MC First mover has market advantage Marginal Revenue Curve for Monopolist with Straight- Line Demand Curve. Remember: TR = P*Q and P = a-bq so TR = aq-bq 2. 2 dtr d(aq - bq ) MR = = = a 2bQ dq dq ECON 1 MT1 Review Session Page 21 ECON 1 MT1 Review Session Page 22 Profit-Maximizing Rule: Set Q where MR = MC. Then set P off of demand curve (for given Q) But: Review Chapter 9 & 10 Chapter 9: Monopoly and efficiency: Deadweight loss. Price Discrimination, types, benefits. Chapter 10: Elements of a game. Dominant strategies. Nash Equilibrium. Prisoner's dilemma. ECON 1 MT1 Review Session Page 23 ECON 1 MT1 Review Session Page 24
5 Review Chapter 9 & 10 (cont d) Deadweight loss due to monopoly. Monopolist produces LESS than socially efficient level of output (Not efficient). Price discrimination. Charging different buyers different prices for same good or service. So monopolists will increase Q by reducing P in some units. Review Chapter 9 & 10 (cont d) Perfect price discrimination. Charge each buyer exactly her reservation price (move down D curve): no consumer surplus for these transactions. Perfect P discrimination results in transfer of consumer surplus to producer surplus. So a monopolist has an incentive to price discriminate Hurdle method of price discrimination. Seller offers discount to all buyers who overcome an obstacle. Game Theory: The payoff of many actions depends upon the actions of others. Basic elements, payoff matrix. Dominant Strategy, Nash equilibrium. Prisoner s dilemma. ECON 1 MT1 Review Session Page 25 ECON 1 MT1 Review Session Page 26 Review Chapter 11 & 12. Chapter 11: Positive and Negative Externality. Socially optimal outcome. Coase Theorem. Tragedy of Commons. Chapter 12: Rational Information Gathering/Search. Free Rider Problem. Fair Gamble and taste for risk. Asymmetric Information. ECON 1 MT1 Review Session Page 27 Review Chapter 11 & 12 (cont d) Externality: a cost or benefit of an activity that does not accrue to buyer or seller. External cost (negative externality): cost that falls on people other than those who pursue the activity. External benefit (positive externality): benefit received by people other than those who pursue the activity. ECON 1 MT1 Review Session Page 28 Review Chapter 11 & 12 (cont d) With externalities present (XB and XC): free markets do not provide optimal outcome. Social MC = Private MC + XC (Ext. cost) Social demand = private D + XB (Ext. Benefit) Review Chapter 11 & 12 (cont d) Coarse Theorem: If people can negotiate the purchase and sale of the right to perform activity with externalities, they will arrive at efficient solutions. Assumes: No cost of negotiation Perfect information Optimal amount of negative externalities is not zero, but when MC=MB to society. Tragedy of commons: Resources with no price will be used until MB = 0 (since private MC=0 although social MC>0). ECON 1 MT1 Review Session Page 29 ECON 1 MT1 Review Session Page 30
6 Review Chapter 11 & 12 (cont d) Information: No one is fully informed. Consumers can collect information but it takes time, so stop when MB = MC. Free-rider problem. Occurs when non-payers cannot be excluded from using a valuable good or service. Too little of good is produced. Expected value of a gamble: Sum of possible outcomes multiplied by their probabilities. Risk neutral: accept gamble that is fair (EV=0) or better (EV>0). Risk averse: accept only better-than-fair gambles. Asymmetric information: reduces the average quality of used goods offered for sale (reduces economic surplus), and so P falls (Lemons model), then sellers have incentive to lower quality of goods for sale, quality lowers, (downward spiral) Review Chapter 14 & 15 Chapter 14: Policies to regulate natural monopoly. Marginal cost pricing of public services. Taxation of pollution. Chapter 15: Public Goods. Provision of public goods (demand curve, free rider problem, elasticity) What should we tax? ECON 1 MT1 Review Session Page 31 ECON 1 MT1 Review Session Page 32 Review Chapter 14 & 15 (cont d) Public policy: apply cost-benefit principle. Natural monopoly and Four Types of Government Control. Pricing Public Services (Health Care Delivery) Environmental regulation. Taxing pollution. Types of public goods. Demand curve. Paying for Public goods. ECON 1 MT1 Review Session Page 33
Economics 323 Microeconomic Theory Fall 2016
green=b SECOND EXAM Chapter Ten Economics 323 Microeconomic Theory Fall 2016 1. The markets for many come close to satisfying the conditions required for perfect competition. a. agricultural goods b. transportation
More informationEcon 201 Review Notes - Part 3
Econ 201 Review Notes - Part 3 This is intended as a supplement to the lectures and section. It is what I would talk about in section if we had more time. After the first three chapters where we talked
More informationEcon 2113: Principles of Microeconomics. Spring 2009 ECU
Econ 2113: Principles of Microeconomics Spring 2009 ECU Chapter 12 Monopoly Market Power Market power is the ability to influence the market, and in particular the market price, by influencing the total
More informationMicroeconomics Exam Notes
Microeconomics Exam Notes Opportunity Cost What you give up to get it Production Possibility Frontier Maximum attainable combination of two products (Concept of Opportunity Cost). Main Decision Makers:
More informationMonopoly. Basic Economics Chapter 15. Why Monopolies Arise. Monopoly
1 Why Monopolies Arise Basic Economics Chapter 15 Monopoly Monopoly - The monopolist is a firm that is the sole seller of a product (or service) without close substitutes - The monopolist is a price maker
More informationAP Microeconomics Review With Answers
AP Microeconomics Review With Answers 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry (which means show
More information1.3. Levels and Rates of Change Levels: example, wages and income versus Rates: example, inflation and growth Example: Box 1.3
1 Chapter 1 1.1. Scarcity, Choice, Opportunity Cost Definition of Economics: Resources versus Wants Wants: more and better unlimited Versus Needs: essential limited Versus Demand: ability to pay + want
More informationWeek One What is economics? Chapter 1
Week One What is economics? Chapter 1 Economics: is the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives
More informationMarket structures. Why Monopolies Arise. Why Monopolies Arise. Market power. Monopoly. Monopoly resources
Market structures Why Monopolies Arise Market power Alters the relationship between a firm s costs and the selling price Charges a price that exceeds marginal cost A high price reduces the quantity purchased
More informationContents EXPLORING ECONOMICS
Contents About the authors I-5 Preface to second edition I-7 Chapter-heads I-9 Syllabus : Choice Based Credit System (CBCS) I-19 1 EXPLORING ECONOMICS 1.1 Why study economics? 1 1.2 Meaning of economics
More informationPrinciples of Economics. January 2018
Principles of Economics January 2018 Monopoly Contents Market structures 14 Monopoly 15 Monopolistic competition 16 Oligopoly Principles of Economics January 2018 2 / 39 Monopoly Market power In a competitive
More information4. Which of the following statements about marginal revenue for a perfectly competitive firm is incorrect? A) TR
Name: Date: 1. Which of the following will not be true of a perfectly competitive market? A) Buyers and sellers will have an imperceptible effect on the market. B) Firms can freely enter and exit the market.
More informationTo produce more beach balls, you must give up ever increasing quantities of ice cream cones.
Unit 01: Basic Concepts (Macro/Micro) Scarcity The Economic Problem: Unlimited wants, limited economic resources Factors of Production: -Land -Labor -Capital -Entrepreneurship Big 3 Questions: -What to
More informationWhat Is Covered. Econ 2 Final Exam. The Big Concepts. An Outline of Topics Covered In Econ 2
What Is Covered Econ 2 Final Exam Where: Price Center Theatre Date: Friday March 24 Time: 8:00-11:00 a.m. Final is cumulative Heavier emphasis on chapters (14&15) not covered on earlier midterms Format:
More informationMicro Semester Review Name:
Micro Semester Review Name: The following review is set up to emphasize certain concepts, graphs and terms. It is the responsibility of the individual teachers to emphasize and review the analysis aspects
More informationEcon Microeconomics Notes
Econ 120 - Microeconomics Notes Daniel Bramucci December 1, 2016 1 Section 1 - Thinking like an economist 1.1 Definitions Cost-Benefit Principle An action should be taken only when its benefit exceeds
More informationAP Microeconomics. Content Skills Learning Targets Assessment Resources & Technology
St. Michael Albertville High School Teacher: Matthew Rooker AP Microeconomics October 2014 Content Skills Learning Targets Assessment Resources & Technology November 2014 Content Skills Learning Targets
More informationChapter 1- Introduction
Chapter 1- Introduction A SIMPLE ECONOMY Central PROBLEMS OF AN ECONOMY: scarcity of resources problem of choice Every society has to decide on how to use its scarce resources. Production, exchange and
More informationFINALTERM EXAMINATION FALL 2006
FINALTERM EXAMINATION FALL 2006 QUESTION NO: 1 (MARKS: 1) - PLEASE CHOOSE ONE Compared to the equilibrium price and quantity sold in a competitive market, a monopolist Will charge a price and sell a quantity.
More informationMonopoly, Oligopoly, and Monopolistic Competition Chapter 8 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Monopoly, Oligopoly, and Monopolistic Competition Chapter 8 McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Learning Objectives 1. Distinguish among three types
More informationshort run long run short run consumer surplus producer surplus marginal revenue
Test 3 Econ 3144 Name Fall 2005 Dr. Rupp 20 Multiple Choice Questions (50 points) & 4 Discussion (50 points) Signature I have neither given nor received aid on this exam Use this table to answer questions
More informationQuiz #5 Week 04/12/2009 to 04/18/2009
Quiz #5 Week 04/12/2009 to 04/18/2009 You have 30 minutes to answer the following 17 multiple choice questions. Record your answers in the bubble sheet. Your grade in this quiz will count for 1% of your
More informationChapter 10: Monopoly
Chapter 10: Monopoly Answers to Study Exercise Question 1 a) horizontal; downward sloping b) marginal revenue; marginal cost; equals; is greater than c) greater than d) less than Question 2 a) Total revenue
More informationTextbook Media Press. CH 12 Taylor: Principles of Economics 3e 1
CH 12 Taylor: Principles of Economics 3e 1 Monopolistic Competition and Differentiated Products Monopolistic competition refers to a market where many firms sell differentiated products. Differentiated
More informationECON 101 KONG Midterm 2 CMP Review Session. Presented by Benji Huang
ECON 101 KONG Midterm 2 CMP Review Session Presented by Benji Huang Chapter 5 Efficiency and Equity Benefit, Cost, Surplus Consumers (1) A consumer benefits from the consumption of a product this benefit
More informationDo not open this exam until told to do so. Solution
Do not open this exam until told to do so. Department of Economics College of Social and Applied Human Sciences K. Annen, Fall 003 Final (Version): Intermediate Microeconomics (ECON30) Solution Final (Version
More informationContents. Concepts of Revenue I-13. About the authors I-5 Preface I-7 Syllabus I-9 Chapter-heads I-11
Contents About the authors I-5 Preface I-7 Syllabus I-9 Chapter-heads I-11 1 Concepts of Revenue 1.1 Introduction 1 1.2 Concepts of Revenue 2 1.3 Revenue curves under perfect competition 3 1.4 Revenue
More informationPractice Exam 3: S201 Walker Fall with answers to MC
Practice Exam 3: S201 Walker Fall 2007 - with answers to MC Print Your Name: I. Multiple Choice (3 points each) 1. If marginal utility is falling then A. total utility must be falling. B. marginal utility
More information2007 Thomson South-Western
Monopolistic Competition Characteristics: Many sellers Product differentiation Free entry and exit In the long run, profits are driven to zero Firms have some control over price What does the costs graph
More informationECON 101: Principles of Microeconomics Discussion Section Week 12 TA: Kanit Kuevibulvanich
Important Concepts: Monopoly ECON 101: Principles of Microeconomics Discussion Section Week 12 Comparison of Perfectly Competitive Market and Monopoly Market Perfect Competition Monopoly Number of Participants
More informationMonopoly. Cost. Average total cost. Quantity of Output
While a competitive firm is a price taker, a monopoly firm is a price maker. A firm is considered a monopoly if... it is the sole seller of its product. its product does not have close substitutes. The
More informationOligopoly: How do firms behave when there are only a few competitors? These firms produce all or most of their industry s output.
Topic 8 Chapter 13 Oligopoly and Monopolistic Competition Econ 203 Topic 8 page 1 Oligopoly: How do firms behave when there are only a few competitors? These firms produce all or most of their industry
More informationECON 1 Section 5 Demand: The Benefit Side of the Market. Administrative stuff (aprox. 3 min). PS-1 due TODAY!!! Leave them on the table.
Contact Details ECON 1 Section 5 Demand: The Benefit Side of the Market. GSI: Ramon Estopina Office: Evans 508-5 Office Hours: Tuesday 1-3 PM Email: estopina@haas.berkeley.edu Handouts: Trough email. Anybody
More informationAP Microeconomics Review Session #3 Key Terms & Concepts
The Firm, Profit, and the Costs of Production 1. Explicit vs. implicit costs 2. Short-run vs. long-run decisions 3. Fixed inputs vs. variable inputs 4. Short-run production measures: be able to calculate/graph
More information14.01 Principles of Microeconomics, Fall 2007 Chia-Hui Chen November 7, Lecture 22
Monopoly. Principles of Microeconomics, Fall Chia-Hui Chen November, Lecture Monopoly Outline. Chap : Monopoly. Chap : Shift in Demand and Effect of Tax Monopoly The monopolist is the single supply-side
More informationEco402 - Microeconomics Glossary By
Eco402 - Microeconomics Glossary By Break-even point : the point at which price equals the minimum of average total cost. Externalities : the spillover effects of production or consumption for which no
More information2010 Pearson Education Canada
What Is Perfect Competition? Perfect competition is an industry in which Many firms sell identical products to many buyers. There are no restrictions to entry into the industry. Established firms have
More informationMonopolistic Competition. Chapter 17
Monopolistic Competition Chapter 17 The Four Types of Market Structure Number of Firms? Many firms One firm Few firms Differentiated products Type of Products? Identical products Monopoly Oligopoly Monopolistic
More informationCh. 9 LECTURE NOTES 9-1
Ch. 9 LECTURE NOTES I. Four market models will be addressed in Chapters 9-11; characteristics of the models are summarized in Table 9.1. A. Pure competition entails a large number of firms, standardized
More informationChapter 11 Perfect Competition
Chapter 11 Perfect Competition Introduction: To an economist, a competitive firm is a firm that does not determine its market price. This type of firm is free to sell as many units of its good as it wishes
More informationSHORT QUESTIONS AND ANSWERS FOR ECO402
SHORT QUESTIONS AND ANSWERS FOR ECO402 Question: How does opportunity cost relate to problem of scarcity? Answer: The problem of scarcity exists because of limited production. Thus, each society must make
More informationLecture 12. Monopoly
Lecture 12 Monopoly By the end of this lecture, you should understand: why some markets have only one seller how a monopoly determines the quantity to produce and the price to charge how the monopoly s
More informationLAHORE UNIVERSITY OF MANAGEMENT SCIENCES SULEMAN DAWOOD SCHOOL OF BUSINESS. MECO 111 Principles of Microeconomics. Dr. Bushra Naqvi COURSE OUTLINE
LAHORE UNIVERSITY OF MANAGEMENT SCIENCES SULEMAN DAWOOD SCHOOL OF BUSINESS MECO 111 Principles of Microeconomics Dr. Bushra Naqvi COURSE OUTLINE ACF Fall 2011/12 Instructor: Dr. Bushra Naqvi Email: Bushra.Naqvi@lums.edu.pk
More informationEconomics 101 Midterm Exam #2. April 9, Instructions
Economics 101 Spring 2009 Professor Wallace Economics 101 Midterm Exam #2 April 9, 2009 Instructions Do not open the exam until you are instructed to begin. You will need a #2 lead pencil. If you do not
More informationChapter 33: Terms of Trade
Chapter 33: Terms of Trade 1 The Terms of Trade The division of the gains from trade depends on the terms of trade. The terms of trade are measured by the ratio of the price of exports to the price of
More informationMonopoly. Chapter 15
Monopoly Chapter 15 Monopoly While a competitive firm is a price taker, a monopoly firm is a price maker. Monopoly u A firm is considered a monopoly if... it is the sole seller of its product. its product
More informationECON 230D2-002 Mid-term 1. Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
ECON 230D2-002 Mid-term 1 Name Student Number MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Scenario 12.3: Suppose a stream is discovered whose
More informationMonopoly. PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University
15 Monopoly PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Market power Why Monopolies Arise Alters the relationship between a firm s costs and the selling price Monopoly
More informationECON 311 MICROECONOMICS THEORY I
ECON 311 MICROECONOMICS THEORY I Profit Maximisation & Perfect Competition (Short-Run) Dr. F. Kwame Agyire-Tettey Department of Economics Contact Information: fagyire-tettey@ug.edu.gh Session Overview
More informationUnit 4: Imperfect Competition
Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique
More information2.1 Markets Definition of markets with relevant local, national and international examples
2.1 Markets of markets with relevant local, national and international examples M&B 41 Market: Institution or mechanism that brings together the buyers ( demanders ) and sellers ( suppliers ) of particular
More informationUnit 4: Imperfect Competition
Unit 4: Imperfect Competition 1 Monopoly 2 Characteristics of Monopolies 3 5 Characteristics of a Monopoly 1. Single Seller One Firm controls the vast majority of a market The Firm IS the Industry 2. Unique
More informationMonopoly. 3 Microeconomics LESSON 5. Introduction and Description. Time Required. Materials
LESSON 5 Monopoly Introduction and Description Lesson 5 extends the theory of the firm to the model of a Students will see that the profit-maximization rules for the monopoly are the same as they were
More informationCOMM 295 MIDTERM REVIEW SESSION BY WENDY ZHANG
COMM 295 MIDTERM REVIEW SESSION BY WENDY ZHANG TABLE OF CONTENT I. Introduction, Supply and Demand, Elasticity II. Estimation III. Profit Maximization IV. Competition, Consumer and Producer Surpluses V.
More informationECON 102 Brown Final Exam (New Material) Practice Exam Solutions
www.liontutors.com ECON 102 Brown Final Exam (New Material) Practice Exam Solutions 1. B A very large percent of their earnings comes from economic rent 2. B Any funds left, after everyone who has a claim
More informationEcon 98 (CHIU) Midterm 1 Review: Part A Fall 2004
Disclaimer: The review may help you prepare for the exam. The review is not comprehensive and the selected topics may not be representative of the exam. In fact, we do not know what will be on the exam.
More informationA Planned Course Statement for. Economics, AP. Length of Period (mins.) 41 Total Clock Hours: 123. Periods per Cycle: 6 Length of Course (yrs.) 1.
East Penn School District Secondary Curriculum A Planned Course Statement for Economics, AP Course # 266 Grade(s) 12 Department: Social Studies Length of Period (mins.) 41 Total Clock Hours: 123 Periods
More informationEssential Questions Content Skills Assessments Standards/PIs Resources/Notes. Discriminates between scarcity and shortage.
Map: AP Economics Type: Consensus Grade Level: 12 School Year: 2010-2011 Author: Jessica Cartusciello District/Building: Island Trees/Island Trees High School Created: 06/28/2010 Last Updated: 07/22/2010
More information6) Consumer surplus is the red area in the following graph. It is 0.5*5*5=12.5. The answer is C.
These are solutions to Fall 2013 s Econ 1101 Midterm 1. No guarantees are made that this guide is error free, so please consult your TA or instructor if anything looks wrong. 1) If the price of sweeteners,
More informationMonopoly. While a competitive firm is a price taker, a monopoly firm is a price maker.
Monopoly Monopoly While a competitive firm is a price taker, a monopoly firm is a price maker. Monopoly A firm is considered a monopoly if... it is the sole seller of its product. its product does not
More informationMonopoly and How It Arises
13 MONOPOLY Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists If a good has a close substitute, even if it is produced by only one
More informationEastern Mediterranean University Faculty of Business and Economics Department of Economics Fall Semester
Eastern Mediterranean University Faculty of Business and Economics Department of Economics 2016-17 Fall Semester Duration: 110 minutes ECON101 - Introduction to Economics I Final Exam Type A 11 January
More informationAP Microeconomics Chapter 10 Outline
I. Learning Objectives In this chapter students should learn: A. How the long run differs from the short run in pure competition. B. Why profits encourage entry into a purely competitive industry and losses
More informationMonopolistic Competition
16 Monopolistic Competition PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University 1 Monopolistic Competition Imperfect competition Between perfect competition and monopoly Oligopoly
More informationUnit 4: Imperfect Competition
Unit 4: Imperfect Competition 1 FOUR MARKET STRUCTURES Perfect Competition Monopolistic Competition Oligopoly Pure Monopoly Imperfect Competition Every product is sold in a market that can be considered
More informationCONTENTS. Introduction to the Series. 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply Elasticities 37
CONTENTS Introduction to the Series iv 1 Introduction to Economics 5 2 Competitive Markets, Demand and Supply 17 3 Elasticities 37 4 Government Intervention in Markets 44 5 Market Failure 53 6 Costs of
More information2000 AP Microeconomics Exam Answers
2000 AP Microeconomics Exam Answers 1. B Scarcity is the main economic problem!!! 2. D If the wages of farm workers and movie theater employee increase, the supply of popcorn and movies will decrease (shift
More informationMICRO EXAM REVIEW SHEET
MICRO EXAM REVIEW SHEET 1. Firm in Perfect Competition (Long-Run Equilibrium) 2. Monopoly Industry with comparison of price & output of a Perfectly Competitive Industry 3. Natural Monopoly with Fair-Return
More informationThe Behavior of Firms
Chapter 5 The Behavior of Firms This chapter focuses on how producers make decisions regarding supply. Individuals demand goods and services. Firms supply goods and services. An important assumption is
More informationMicroeconomics. Use the Following Graph to Answer Question 3
More Tutorial at www.dumblittledoctor.com Microeconomics 1. To an economist, a good is scarce when: *a. the amount of the good available is less than the amount that people want when the good's price equals
More informationPerfect Competition CHAPTER14
Perfect Competition CHAPTER14 MARKET TYPES The four market types are Perfect competition Monopoly Monopolistic competition Oligopoly MARKET TYPES Perfect Competition Perfect competition exists when Many
More informationREDEEMER S UNIVERSITY
REDEEMER S UNIVERSITY Km 46/48 Lagos Ibadan Expressway, Redemption City, Ogun State COLLEGE OF MANAGEMENT SCIENCE DEPARTMENT OF ECONOMICS AND BUSINESS STUDIES COURSE CODE /TITLE ECO 202/Microeconomics
More informationSection I (20 questions; 1 mark each)
Foundation Course in Managerial Economics- Solution Set- 1 Final Examination Marks- 100 Section I (20 questions; 1 mark each) 1. Which of the following statements is not true? a. Societies face an important
More informationMarket Equilibrium, Price Floor, Price Ceiling
Porters 5 Forces: 1. Entrants sunk costs, switching costs, speed of adjustment, economies of scale, sunk costs, network effects, reputation, government restraints 2. Power of input suppliers supplier concentration,
More informationMonopoly. The single seller or firm referred to as a monopolist or monopolistic firm. Characteristics of a monopolistic industry
Monopoly Monopoly: a market structure in which there is only one seller of a good or service that has no close substitutes and entry to the market is completely blocked. The single seller or firm referred
More informationPreface. Chapter 1 Basic Tools Used in Understanding Microeconomics. 1.1 Economic Models
Preface Chapter 1 Basic Tools Used in Understanding Microeconomics 1.1 Economic Models 1.1.1 Positive and Normative Analysis 1.1.2 The Market Economy Model 1.1.3 Types of Economic Problems 1.2 Mathematics
More informationMicroeconomics: MIE1102
TEXT CHAPTERS TOPICS 1, 2 ECONOMICS, ECONOMIC SYSTEMS, MARKET ECONOMY 3 DEMAND AND SUPPLY. MARKET EQUILIBRIUM 4 ELASTICITY OF DEMAND AND SUPPLY 5 DEMAND & CONSUMER BEHAVIOR 6 PRODUCTION FUNCTION 7 COSTS
More informationMonopoly CHAPTER. Goals. Outcomes
CHAPTER 15 Monopoly Goals in this chapter you will Learn why some markets have only one seller Analyze how a monopoly determines the quantity to produce and the price to charge See how the monopoly s decisions
More informationMICROECONOMICS - CLUTCH CH PERFECT COMPETITION.
!! www.clutchprep.com CONCEPT: THE FOUR MARKET MODELS Market structure describes the environment in which a firm operates, determined by the Perfect Competition Monopolistic Competition Oligopoly Monopoly
More informationChapter 13. Microeconomics. Monopolistic Competition: The Competitive Model in a More Realistic Setting
Microeconomics Modified by: Yun Wang Florida International University Spring, 2018 1 Chapter 13 Monopolistic Competition: The Competitive Model in a More Realistic Setting Chapter Outline 13.1 Demand and
More informationEconomics 203: Intermediate Microeconomics I. Sample Final Exam 1. Instructor: Dr. Donna Feir
Last Name: First Name: Student Number: Economics 203: Intermediate Microeconomics I Sample Final Exam 1 Instructor: Dr. Donna Feir Instructions: Make sure you write your name and student number at the
More informationEcon 98 (CHIU) Midterm 1 Review: Part A Fall 2004
Disclaimer: The review may help you prepare for the exam. The review is not comprehensive and the selected topics may not be representative of the exam. In fact, we do not know what will be on the exam.
More informationSupply and demand: Price-taking and competitive markets
Supply and demand: Price-taking and competitive markets ECONOMICS Dr. Kumar Aniket Bartlett School of Construction & Project Management Lecture 8 CONTEXT Firms with market power can set their own price.
More informationSection I (20 questions; 1 mark each)
Foundation Course in Managerial Economics Examination Marks- 100, Time 3 hours Section I (20 questions; 1 mark each) 1. Which of the following statements is not true: a. Rich countries also face problems
More informationMarginal willingness to pay (WTP). The maximum amount a consumer will spend for an extra unit of the good.
McPeak Lecture 10 PAI 723 The competitive model. Marginal willingness to pay (WTP). The maximum amount a consumer will spend for an extra unit of the good. As we derived a demand curve for an individual
More informationDemand curve - using Game Results How much customers will buy at a given price Downward sloping - more demand at lower prices
31 October Bige Kahraman Class Notes First half of course (Michaelmas) is Microeconomics, second half (Hilary) is Macroeconomics Focusing on profit maximization & price formation Looking at industry level
More informationName Date Period -Econ Unit 2: Chapter 4-7- Demand, Supply, Prices and Markets
/ 88 Packet /20 Notes Unit 2 BIG PICTURE Questions /12 Name Date Period -Econ Unit 2: Chapter 4-7- Demand, Supply, Prices and Markets /108 Total Packet What is BIG PICTURE for Unit 2? To find the answer,
More informationMarket structure 1: Perfect Competition The perfectly competitive firm is a price taker: it cannot influence the price that is paid for its product.
Market structure 1: Perfect Competition The perfectly competitive firm is a price taker: it cannot influence the price that is paid for its product. This arises due to consumers indifference between the
More informationChapter 13 MODELS OF MONOPOLY. Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.
Chapter 13 MODELS OF MONOPOLY Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved. 1 Monopoly A monopoly is a single supplier to a market This firm may choose to produce
More informationEconomics 101 Section 5
Economics 101 Section 5 Lecture #22 April 13, 2004 Chapter 10 Monopolistic Competition Oligopoly Game Theory Monopolistic Competition 3 characteristics of a monopolistically competitive market 1) Many
More informationStudy Guide Final Exam, Microeconomics
Study Guide Final Exam, Microeconomics 1. If the price-consumption curve of a commodity slopes downward how can you tell whether the consumer spends more or less on this commodity from her budget (income)?
More informationECON 102 Brown Final Exam Practice Exam Solutions
www.liontutors.com ECON 102 Brown Final Exam Practice Exam Solutions 1. B 2. C 3. C All products are identical (homogenous) in perfect competition so there is no such thing as brand preference. 4. C Breakeven
More informationUnit 13 AP Economics - Practice
DO NOT WRITE ON THIS TEST! Unit 13 AP Economics - Practice Multiple Choice Identify the choice that best completes the statement or answers the question. 1. A natural monopoly exists whenever a single
More informationEcon 300: Intermediate Microeconomics, Spring 2014 Final Exam Study Guide 1
Econ 300: Intermediate Microeconomics, Spring 2014 Final Exam Study Guide 1 Chronological order of topics covered in class (to the best of my memory). Introduction to Microeconomics (Chapter 1) What is
More informationECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions
www.liontutors.com ECON 102 Kagundu Final Exam (New Material) Practice Exam Solutions 1. A A large number of firms will be able to operate in the industry because you only need to produce a small amount
More informationMonopoly and How It Arises
Monopoly and How It Arises A monopoly is a market: That produces a good or service for which no close substitute exists In which there is one supplier that is protected from competition by a barrier preventing
More informationDo not remove any pages or add any pages. No additional paper is supplied
ECON 001 Spring 2018 Midterm 2 March 27, 2018 Time Limit: 60 Minutes Name (Print): Recitation Section: Name of TA: This exam contains 5 pages (including this cover page) and 10 questions. Check to see
More informationECON 2100 (Fall 2018 Section 11) Final Exam Version B
ECON 21 (Fall 218 Section 11) Final Exam Version B Multiple Choice Questions: (3 points each) 1. I am taking of the exam. B. Version B 2. Which of the following could never lead to a change in demand for
More informationECON 2100 (Fall 2018 Section 11) Final Exam Version A
ECON 21 (Fall 218 Section 11) Final Exam Version A Multiple Choice Questions: (3 points each) 1. I am taking of the exam. A. Version A 2. Which of the following could never lead to a change in demand for
More information