Term
| What is a firm’s production function? |
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Definition
| - Relationship between producers input and output |
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Term
| What are diminishing returns to labor? |
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Definition
| - As you add 1 worker, you get less benefit out of the next worker |
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Term
| What are the four key factors of a perfectly competitive market? |
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Definition
| - Lots of sellers, standardized product, no one controls price, easy to exit/enter |
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Term
| What does it mean when economists say producers and consumers are for the most part price takers in a perfectly competitive market? |
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Definition
| - Price evolves naturally (no one has influence over prices) |
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Term
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Definition
| - Unintended cost or benefit |
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Term
| Give an example of an externality. |
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Definition
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Term
| What are the three ways suppliers in a monopolistic environment differ from those in a perfectly competitive market? |
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Definition
| - One seller, entry is hard, supplier controls price |
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Term
| How can firms increase price in a monopolistic market? |
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Definition
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Term
| What is a natural monopoly? |
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Definition
| - Company has control over prices |
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Term
| What did the government enact to prevent monopolies? |
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Definition
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Term
| How does the government help to create monopolies? |
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Definition
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Term
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Definition
| - When a few firms are in control |
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Term
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Definition
| - Sales in the market place that a producer supplies |
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Term
| How can a firm increase its market share in an oligopolistic market? |
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Definition
| - Advertising & product differentiation |
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Term
| How do firms in an oligopolistic market drive up prices? |
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Definition
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Term
| How else can prices be set in an oligopolistic market? |
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Definition
| - Government can intervene |
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Term
| Give an example of a monopoly. |
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Definition
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Term
| Give an example of an oligopoly. |
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Definition
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Term
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Definition
| - Study of interdependence of the firms in an oligopoly |
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Term
| How does the prisoner’s dilemma fall short in looking at how oligopolies interact in the market place? |
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Definition
| - Only looks at a 1-time interaction |
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Term
| What is strategic behavior? |
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Definition
| - Influencing others behavior for the future |
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Term
| What is non-cooperative behavior? |
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Definition
| - Acting in your own best interests |
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