Term
| Characteristics of a Perfectly Competitve Market |
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Definition
| Many firms, all firms produce identical product, buyers and sellers understand market, independent, price taker, Price, MR, AR are all equal |
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Term
| Characteristics of a Monopolistic Competitive firm |
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Definition
| Many firms, some difference in products, independent, some price seting ability, price higher than MR |
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Term
| Characteristics of an Oligopoly |
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Definition
| Few powerful firms, products are different, downward sloping demand curve, not public market knowledge, interdependent, greater price setting ability, price higher than MR |
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Term
| Characteristics on a Monopoly |
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Definition
| 1 firm, unique product, restricted market knowledge to the 1 firm, price maker, price higher than MR |
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Term
| Hirfindahl-Hirschman Index: Perfectly Competitive |
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Definition
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Term
| Hirfindahl-Hirschman Index: Monopolistic Competitive |
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Definition
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Term
| Hirfindahl-Hirschman Index:Oligopoly |
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Definition
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Term
| Hirfindahl-Hirschman Index: Monopoly |
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Definition
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Term
| 4 firm concentration ratio: Perfectly competitive |
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Definition
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Term
| 4 firm concentration ratio: Monopolistic Competition |
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Definition
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Term
| 4 firm concentration ratio: Oligopoly |
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Definition
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Term
| 4 firm concentration ratio: Monopoly |
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Definition
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Term
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Definition
| Small number of firms acting together as a monopoly. Produce less for a higher price. |
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Term
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Definition
| Σ(current year's output X base year's prices) |
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Term
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Definition
| Σ(current year's output X current year's prices) |
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Term
| GDP Expenditures approach |
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Definition
GDP= C+I+G+NX
GDP= Consumer spending + Gross private investment (including account depreciation) + Gov't Spending + Net Exports (Exports-Imports) |
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Term
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Definition
| Compensation to Employees + Rental Income + Net Interest + Corporate Profits + Proprietors' Income + (Indirect Taxes - Subsidies) + Capital Consumptions |
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Term
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Definition
| Allow adjustments for costs of living of ppl w/ fixed incomes. Designed to keep the standard of living the same. |
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Term
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Definition
Σ(base market basket quantities X current prices)
Σ(Base year market basket quantities X base year's prices)
Multiplied by 100 |
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Term
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Definition
Current CPI - Previous CPI
Previous CPI
Multiplied by 100 |
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Term
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Definition
Nominal GDPk
Real GDPk
Multiplied by 100 |
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Term
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Definition
GDP Deflatork - GDP Deflatork-1
GDP Deflatork-1
Multiplied by 100
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Term
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Definition
Nominal (Current Wage)
CPI Current Year
Multiplied by 100 |
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Term
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Definition
| Nominal Interest - Inflation |
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Term
Which of the following is a characteristic f a perfectly-competitive firm?
1) Single firm
2) Market (equilibrium) price = firm price
3)Great Barriers to entering market
4) Unique product
5) All of the above |
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Definition
| 2) Market (equilibrium) price equals firm price |
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Term
If a PC firm is facing a market price that is below its ATC, but above AVC @ an output where its MC=MR
1) it's making an economic profit
2) it's making an economic loss
3) It will continue to operate in the short run
4) It wil shut down in the short run
5) 2 & 3 |
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Definition
5) 2 & 3
It is making an economic loss and it will continue to operate in the short run |
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Term
If a PC firm is facing a market price that is below its ATC & below its AVC @ an output where its MC=MR
1) It's making an economic profit
2) It will continue to operate in the short run
3) It will shut down in the short run
4) 2 & 3 |
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Definition
| 3) It will shut down in the long run |
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Term
| (True/False) In a PC firm, market prices = Marginal Revenue for all values of total product. |
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Definition
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Term
| (True/False) Profit maximization for a PC firm occurs at an output where marginal cost is = to the market price and the firm's marginal cost = to the firm's marginal revenue. |
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Definition
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Term
Which type of market(s) would expect to earn zero economic profit (ie normal return) in the long run?
1) Monopoly
2) PC and Monopoly w/o rent seeking
3) PC & Monopoly w/ extreme rent seeking
4)None of the above |
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Definition
| 3) PC & Monopoly w/ extreme rent seeking |
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Term
In comparing a PC firm to a monopoly
1) They will both sell every level of output at the same price
2) A monopoly will produce less than a PC market and the monopoly price will be higher than that of the PC market
3) PC firms produce the same quant and sel at the same price as a monopoly
4) none of the above |
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Definition
| 2) A monopoly will produce less than a PC market and the monopoly price will be higher than that of the PC market |
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Term
To capture all of a markets consumer surplus
1) A PC firm will operate at equilibrium
2) A monopoly firm will operate at capacity in the long run, a pc firm will not
3) a monopoly will use rent seeking
4) a monopoly will use price discrimination
5) A monopoly will perfect price discrimination |
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Definition
| 5) A monopoly will perfect price discrimination |
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Term
In comparing a PC firm to a mono
1) a mono will have MR = price (ie AR), a pc firm's price will exceed its MR
2) A PC firm will have MR = price (ie AR), a mono's price will exceed its MR |
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Definition
| 2) A PC firm will have MR = price (ie AR), a mono's price will exceed its MR |
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Term
| (True/False) 1 thing that monos & PC firms have in common is that they both make the greatest profit (or least loss) when they operate at a total product value where MC=MR |
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Definition
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Term
In comparing a PC firm to a MC firm
1) A PC firm will operate at capacity in the long run, a MC firm won't
2) A MC firm will operate at capacity in the long run, a pc firm won't
3) Neither PC firms nor MC firms will operate at capacity in the long run
4) Both PC and MC firms will operate at capacity in the long run |
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Definition
| 1) A PC firm will operate at capacity in the long run, a MC firm won't |
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Term
| (True/False) A 4-firm concentration ratio of 20% would suggest that the market is a MC market |
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Definition
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Term
| (True/False) A Herfindahl-Hirshman index of 2000 would suggest that the market is MC |
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Definition
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Term
Which of the following might be responsible for a monopoly?
1) Public franchise
2) Gov't licensing
3) Sole ownership of required resources
4) Copyright
5) All of the above |
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Definition
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Term
If a monopoly were losing money, it would choose to operate at an output where
1) MR=AR
2) MR= price
3) MR= demand
4) MR is greater than price
5) MR=MC |
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Definition
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Term
| (True/False) An unregulated monopoly market experiences no deadweight loss |
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Definition
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Term
In a MC pricing monopoly
1) The mono would produce less than an AC pricing mono
2) The mono would produce less than an unregulated mono
3) The mono would produce more than an AC mono and an unregulated mono |
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Definition
| 3) The mono would produce more than an AC mono and an unregulated mono |
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Term
| (True/False) In an AC pricing monopoly, the monopoly would earn a normal return, but the consumer would have more service available at a lower price than an unregulated monopoly. |
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Definition
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Term
A market w/ a H-H index of 1500 would be
1) PC
2) MC
3) Oli
4) Mono
5) Outside the range of index |
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Definition
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Term
A market w/ a 4-firm concentration ratio of 70% would be
1) PC
2) MC
3) Oli
4) Mono |
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Definition
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Term
| (True/False) In the long run we would expect a MC firm to have a normal return. |
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Definition
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Term
| (True/False) In the long run a MC firm would operate at its capacity point. |
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Definition
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Term
Which type of markets would expect to earn 0 economic profit in the long run?
1) Mono
2) 1 & 3
3) Oli
4) PC & MC
5) None of the above |
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Definition
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Term
In comparing a PC firm to a MC firm
1) A PC firm will operate at capacity in the long run, a MC firm won't
2) A MC firm will operate @ capacity in the long run, a PC firm will not
3) Neither PC nor MC firms will operate @ capacity in the long run
4) Both PC and MC firms operate at capacity in the long run |
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Definition
| 1) A PC firm will operate at capacity in the long run, a MC firm won't |
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Term
| (True/False) TH MC firm exhibits a difference b/w price and Marg cost at its profit-maximizing (or loss-minimizing) output, and this is referred to as markup |
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Definition
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Term
| (True/False) A H-H index of 2000 would suggest that the market is MC |
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Definition
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Term
Traditional Real GDP for a given base year
1)Is significantly greater than the nominal GDP for that year
2) May be less than the nom GDP for that year
3) Is the same as the nom GDP for that year
4) Is only slightly greater than the nom GDP for that year
5) None of the above |
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Definition
| 3) Is the same as the nom GDP for that year |
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Term
| (True/False) US net exports represent the difference b/w what is produced in teh US and sold abroad and what is produced abroad and bought by US citizens, firms, and the gov't |
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Definition
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Term
Goods that were produced in a previous year, but sold this year are
1) Included in this year's GDP
2) included only in the expenditure approach in determining this year's GDP
3) Included only in the incomes approach in determining this year's GDp
4) NOt included in this year's GDP |
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Definition
| 4) Not included in this year's GDP |
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Term
| (True/False) The greates spenders, in terms of calculating GDP are households, while the greatest recipient of income, in terms of determining GDP are firms |
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Definition
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Term
If I were unemployed, could not find employment for several months and decided to stop looking for employment
1) After a month of not looking I would no longer be included in the labor force
2) I would be a discouraged worker
3) Included w/ other discouraged workers, I could make the unemployment rate to appear to decline
4) All of the above |
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Definition
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Term
| (True/False) Involuntary part-time worker percentages typically peak during recessions. |
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Definition
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Term
| (True/False) If I employed an electrician to install a new circuit in my house, but paid him in cash, with neither of us reporting this to the IRS, we would find this productive activity not included in any measure of GDP. |
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Definition
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Term
If I were incarcerated and were producing vanity license plates
1) I would be considered employed
2) I would be considered unemployed
3) I woud be considered not in the working-age population
4) None of the above |
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Definition
| 3) I would be considered not in the working-age population |
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Term
Part-time workers
1) typically work less than 35 hrs weekly
2) Typically not eligible for health and other benefits available to full time workers
3) May do this voluntarily or may be considered involuntary part-time workers
4) All of the above |
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Definition
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Term
THe CPI is used to gage the health of our economy by
1) the value of all output change
2) the value of specific output change
3) the change in the price level
4) the value of producer cost changes
5) none of the above |
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Definition
| 3) by the change in the price level |
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Term
The CPI-U
1) measures price-level changes for urban workers
2) is helpful for negotioating wage contracts
3) is helpful for fixed-income households COLAs |
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Definition
| 3) is helpful for fixed-income households COLAs |
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Term
The CPI-W
1) Measures price-level changes for urban workers
2) Is helpful for negotiating wage contracts
3) Is most helpful for fixed-income household COLAs
4) 1 & 2
5) 2 & 3 |
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Definition
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Term
| (True/False) The CPI (ie considering either CPI-I or CPI-W) would be considered to be very accurate in measuring the true change in price level b/w time periods. |
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Definition
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Term
| (True/False) The CPI focuses on output changes that occur b/w a given base year and the current year, while traditional real GDP is primarily concerned w/ price changes that occur b/w a given base year and the current year. |
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Definition
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Term
| (True/False) In traditional real GDP measurements, prices are held constant for the base year and the current year; in CPI measurements, quants are held constant for the base year and the current year |
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Definition
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Term
The CPI for a year that represents the base could be
1) greater than 100
2) less than 100
3) 100 |
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Definition
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Term
In the Boskin Commission study the amount of CPI overestimation was suggested to be
1) 5%
2) 10.5%
3) 3.7%
4) 1.1% |
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Definition
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Term
| (True/False) If the Boskin Commission overestimation were taken into consideration and implemented, the gov't would spend less ,and fixed income individuals and wage earners would receive less in teh way of COLAs and wage increases. |
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Definition
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Term
| (True/False) The labor force includes all of those who are employed and all who are officially unemployed. |
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Definition
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Term
To be an unemployed person, in addition to being out of work,
1) must have dropped out of the labor force
2) must be a discouraged worker
3) must be available for work and be waiting for a recall to a job from which they had been laid off
4) must be available for work and have looked for work during the last month
5) 3&4 |
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Definition
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Term
Given a labor force of 15000 a number employed of 10000 and working age pop of 20000, the labor force participation rate would be
1) 25%
2) 75%
3) 50%
4) 80%
5) 15% |
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Definition
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Term
| (True/False) The discouraged-worker is the person who is not working, available for work but has ade no effort to find a job w/in the last month. |
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Definition
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Term
| (True/False) involuntary part-time workers are less affected by recessions than the pop of all part-time workers |
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Definition
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Term
The type of unemployment that is most affected by technological advances in a society is
1)frictional
2) cyclical
3) structural
4) Seasonal |
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Definition
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Term
The type of unemployment that may be good for the economy b/c it's always there and represents what occurs when there is a mismatch b/w employer and employee is
1) frictional
2) cyclical
3) structural
4) seasonal |
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Definition
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Term
5) The type of unemployment that is of greatest concern, since it represents how well or how poorly the economy is doing is
1) frictional
2) cyclical
3) structural
4) seasonal |
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Definition
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Term
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Definition
| Payments tha monos make to retain their monopolistic position. Always causes ATC to rise. |
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Term
| Extreme Rent Seeking Monopoly |
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Definition
| ATC= price b/c downward sloping demand curve capacity point isn't where MC=ATC |
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Term
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Definition
| Agreement b/w gov't and mono to chante the price to the avg cost which means the price in a reg mon will be lwoer than that of an unreg mono and the output of a reg will be greater |
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Term
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Definition
| Even smaller price. Use based on MC difference b/w Avg and marg cost. Provides greatest output greater than avg cost pricing and unreg. |
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