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Chapters 15-20
N/A
50
Economics
12th Grade
02/29/2012

Additional Economics Flashcards

 


 

Cards

Term
Cartel
Definition
a combination of firms that acts as if it were a single firm.
Term
Cartel model of oligopoly
Definition
a model that assumes that oligopolies act as if they were monopolists that have assigned output quotas to individual member firms of the oligopoly so that total output is consistent with joint profit maximization.
Term
Concentration ration
Definition
the value of sales by the top firms of an industry stated as a percentage of total industry sales.
Term
Contestable market model
Definition
: a model of oligopoly in which barriers to entry and barriers to exit, not the structure of the market, determine a firm’s price and output decisions
Term
Herfindahl index
Definition
an index of market concentration calculated by adding the squared value of the individual market shares of all firms in the industry
Term
Implicit collusion
Definition
a type of collusion in which multiple firms make the same pricing decisions even though they have not explicitly consulted with one another.
Term
Market structure
Definition
the physical characteristics of the market within which firms interact
Term
Monopolistic competition
Definition
a market structure in which many firms sell differentiated products
Term
North American Industry Classification System (NAICS)
Definition
an industry classification that categorizes industries by type of economic activity and groups firms with like production processes.
Term
Oligopoly
Definition
a market structure in which there are only a few firms and firms explicitly take other firms’ likely response into account
Term
Strategic decision making
Definition
taking explicit account of a rival’s expected response to a decision you are making
Term
Corporate takeover
Definition
an action in which another firm or a group of individuals issues a tender offer (that is, offers to buy up the stock of a company) to gain control and to install its own managers
Term
Dynamic efficiency
Definition
a market’s ability to promote cost reducing or product-enhancing technological change.
Term
Incentive-compatible contract
Definition
a contract in which the incentives of each of the two parties to the contract are made to correspond as loosely as possible
Term
Lazy monopolist
Definition
a monopolist that does not push for efficiency, but merely enjoys the position it is already in
Term
Monitoring problem
Definition
the need to oversee employees to ensure that their actions are in the best interest of the firm
Term
Network externality
Definition
the phenomenon that the greater use of a product increases the benefit of tat product to everyone
Term
Reverse engineering
Definition
the process of a firm buying other firms’ products, disassembling them, figuring out what’s special about them, and then copying them within the limits of the law
Term
Technological development
Definition
the discovery of new or improved products or methods of production
Term
Technological lock-in
Definition
the prior use of a technology makes the adoption of subsequent technologies difficult
Term
X-inefficiency
Definition
the underperformance of a firm that has a monopoly position
Term
Acquisition
Definition
a transaction in which a company buys another company and the purchaser has the right of direct control over the result ion operation
Term
Antitrust policy
Definition
the government’s policy toward the competitive process
Term
Clayton Antitrust Act
Definition
a U.S. law that made four specific monopolistic practices illegal: price discrimination, tie-in contracts, interlocking directorships, and buying stock in a competitor’s company in order to reduce competition
Term
Conglomerate merger
Definition
the merging of relatively unrelated businesses
Term
Deacquisition
Definition
one company’s sale of either parts of another company it has bought or parts of itself
Term
European Commission (EC)
Definition
the executive group of the European Union that guides action and safeguards the European Union nations; also called commission of the European Communities
Term
Federal Trade Commission Act
Definition
A U.S. law that made it illegal for firms to use ‘unfair methods of competition’ and to engage in ‘unfair or deceptive acts or practices”
Term
Horizontal merger
Definition
the combining of two companies in the same industry
Term
Hostile takeover
Definition
a merger in which the firm being taken over doesn’t want to be taken over
Term
Industrial policy
Definition
a formal policy that government takes toward business.
Term
Judgment by performance
Definition
to judge the competitiveness of markets by the performance of firms in that market
Term
Judgment by structure
Definition
to judge the competitiveness of markets by the structure of the industry
Term
Merger
Definition
the act of combining two firms.
Term
Natural monopoly
Definition
an industry in which a single firm can produce at a lower cost that can two or more firms. Also: an industry in which significant economies of scale make the existence of more than one firm inefficient
Term
Sherman Antitrust
Definition
A U.S. law designed to regulate the competitive process.
Term
Sovereign wealth funds
Definition
investments funds held by governments.
Term
Takeover
Definition
the purchase of one firm by a shell firm that then takes direct control of all the purchased firm’s operations
Term
Vertical merger
Definition
a combination of two companies that are involved in different phases of producing a product.
Term
Bilateral monopoly
Definition
a market with only a single seller and a single buyer
Term
Closed shops
Definition
a firm where unions control the hiring
Term
Comparable worth laws
Definition
laws mandating comparable pay for comparable work
Term
Derived demand
Definition
the demand for factors of production by firms, which depends on consumers’ demands
Term
Efficiency wages
Definition
wages paid above the going-market wage to keep workers happy and productive
Term
Entrepreneurship
Definition
the ability to organize and get something done. Also: labor services that involve high degrees of organizational skills, concern, oversight responsibility, and creativity.
Term
Incentive effect
Definition
how much a person will change his or her hours worked in response to a change in the wage rate
Term
Labor market
Definition
: the factor market in which individuals supply labor services for wages to other individuals and to firs that need (demand) labor services
Term
Marginal factor cost
Definition
the additional cost to a firm of hiring another worker
Term
Monopsony
Definition
a market in which a single firm is the only buyer
Term
Union shops
Definition
a firm in which all workers must join the union.
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