ECO 3101 EXAM 2 questions with answers
In monopolies, MR is always - **🔰 VERIFIED ANSWERS🔰 ✔✔twice as steep as original
demand function
What creates market power (monopolies)? - **🔰 VERIFIED ANSWERS🔰 ✔✔Patents,
Control over inputs, Economies of scale,Network externalities, Franchises
If an industry has IRTS - **🔰 VERIFIED ANSWERS🔰 ✔✔There will be few large firms
If an industry has DRTS - **🔰 VERIFIED ANSWERS🔰 ✔✔There will be lots of small
firms
The more firms there are in a market - **🔰 VERIFIED ANSWERS🔰 ✔✔the higher
consumer surplus will be. DWL also decreases with a greater number of firms.
Consumer surplus is the area - **🔰 VERIFIED ANSWERS🔰 ✔✔below the demand curve
and above the price
Two factos for third degree price discrimination to occur: - **🔰 VERIFIED ANSWERS🔰
✔✔1) Prevent resale
2) Must be able to identify if someone is a part of a group
If firms are making profit in a perfectly competitive market: - **🔰 VERIFIED
ANSWERS🔰 ✔✔more firms will join the market, shifting supply to the right, and dropping
price (MR) back down.
the analog to budget constraints in consumer theory is ____ in producer theory - **🔰
VERIFIED ANSWERS🔰 ✔✔Isocosts
, profit - **🔰 VERIFIED ANSWERS🔰 ✔✔revenue - cost
P*Q - c(Q)
Long run - **🔰 VERIFIED ANSWERS🔰 ✔✔the time period in which all inputs can be
varied
Short run - **🔰 VERIFIED ANSWERS🔰 ✔✔the period of time during which at least one
of a firm's inputs is fixed
law of diminishing returns - **🔰 VERIFIED ANSWERS🔰 ✔✔When additional units of a
variable input are added to fixed inputs after a certain point, the marginal product of the
variable input declines.
- Slope increases and then decreases
- You keep getting gains but they get smaller and smaller each time
- Short run concept
Thomas Malthus - **🔰 VERIFIED ANSWERS🔰 ✔✔1798 said human population will
outgrow food supply
- knew land was fixed, but forgot to consider technology
Marginal Product - **🔰 VERIFIED ANSWERS🔰 ✔✔The change in output generated by
adding one more unit of input.
MP L = change in Q/ change in L
Average Product - **🔰 VERIFIED ANSWERS🔰 ✔✔Total output divided by the amount of
variable input
- AP L = Q/L
In monopolies, MR is always - **🔰 VERIFIED ANSWERS🔰 ✔✔twice as steep as original
demand function
What creates market power (monopolies)? - **🔰 VERIFIED ANSWERS🔰 ✔✔Patents,
Control over inputs, Economies of scale,Network externalities, Franchises
If an industry has IRTS - **🔰 VERIFIED ANSWERS🔰 ✔✔There will be few large firms
If an industry has DRTS - **🔰 VERIFIED ANSWERS🔰 ✔✔There will be lots of small
firms
The more firms there are in a market - **🔰 VERIFIED ANSWERS🔰 ✔✔the higher
consumer surplus will be. DWL also decreases with a greater number of firms.
Consumer surplus is the area - **🔰 VERIFIED ANSWERS🔰 ✔✔below the demand curve
and above the price
Two factos for third degree price discrimination to occur: - **🔰 VERIFIED ANSWERS🔰
✔✔1) Prevent resale
2) Must be able to identify if someone is a part of a group
If firms are making profit in a perfectly competitive market: - **🔰 VERIFIED
ANSWERS🔰 ✔✔more firms will join the market, shifting supply to the right, and dropping
price (MR) back down.
the analog to budget constraints in consumer theory is ____ in producer theory - **🔰
VERIFIED ANSWERS🔰 ✔✔Isocosts
, profit - **🔰 VERIFIED ANSWERS🔰 ✔✔revenue - cost
P*Q - c(Q)
Long run - **🔰 VERIFIED ANSWERS🔰 ✔✔the time period in which all inputs can be
varied
Short run - **🔰 VERIFIED ANSWERS🔰 ✔✔the period of time during which at least one
of a firm's inputs is fixed
law of diminishing returns - **🔰 VERIFIED ANSWERS🔰 ✔✔When additional units of a
variable input are added to fixed inputs after a certain point, the marginal product of the
variable input declines.
- Slope increases and then decreases
- You keep getting gains but they get smaller and smaller each time
- Short run concept
Thomas Malthus - **🔰 VERIFIED ANSWERS🔰 ✔✔1798 said human population will
outgrow food supply
- knew land was fixed, but forgot to consider technology
Marginal Product - **🔰 VERIFIED ANSWERS🔰 ✔✔The change in output generated by
adding one more unit of input.
MP L = change in Q/ change in L
Average Product - **🔰 VERIFIED ANSWERS🔰 ✔✔Total output divided by the amount of
variable input
- AP L = Q/L
