2010澳班微观经济学复习.doc

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1. The minimum price necessary to get a labour resource owner to supply his or her labour is its_____
2. The amount of earnings above the opportunity cost of a Labour is called_____
3.All earnings are opportunity costs when the labour supply curve is _____
4.When the supply curve is vertical,_____ determines the equilibrium price
5. A profit-maximsing firm will hire an additional worker if the wage is less than labour’s_____
6.The marginal revenue product in perfect competition is also called the_____ of the marginal product
7. The competitive firm’s demand curve for labour slopes downward because of the ______
8. When the product of one firm is identical to the product of other firms in the market, the product is said to be_____
9. Resources are freely____ if firms can enter and exit an industry easily.
10. A firm is a ___ if it faces a horizontal demand cure for its product.
11. Under perfect competition, price always equals_____and_____.
12.As long as price at least covers variable costs, a profit-maximising firm produces where _____equals_____
13.If marginal cost exceeds marginal revenue, the firm should____its output level.
14.The short-run supply curve of a perfectly competitive firm is the portion of its____curve that lies above the minimum point of its____curve.
15. Long-run equilibrium in perfect competition is characterized by____ economic profits
16.Long-run equilibrium in perfect competition, each firm produces at the ____of the long-run average cost curve.
17.A ____-cost industry can decrease output and not see resource prices fall.
18.If new firms entering an industry have higher production costs then existing firms, the industry is a (n) _____cost industry
19. _____efficiency is achieved when firms produce the goods society values the most.
20. Allocative efficiency occurs when firm produce at the rate of output where ____equals______.
21. is the amount a seller is paid for a good minus the seller’s cost.
22. economics is the study of how society its scarce resources.
23. efficiency is the property of society getting the it can from its scarce resources.
24. a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology.
25.Bread is a good if demand for it increases when income increases.
26. claims that attempt to prescribe how the world should be.
27.Two goods are complements if the cross-price elasticity of demand is
.
28. comparative advantageis the comparison among producers of a good according to their
29. price ceiling is a legal on the price at which a good can be sold.
30.The marginal revenue product in perfect compeltition is also called the
of the marginal product.
31. If the amount producers receive for their output is greater than the minimum amount they require to produce the output, then producers receive______.

True/false
______1 The decisions a firm makes depend on the structure of the market in which it operates
______2 Under perfect competition, each firm has only to decide how much of a good to produce
______3 The product of one producer is identical to the products of all other producers in the market under perfect competition.
______4 Under perfect competition, a firm will not advertise its product
______5 Perfectly competitive firms try to change the profit-maximising price.
______6 Firms compete vigorously with each other under perfect competition
______7 The slope of the perfectly competitive firm’s total revenue curve is the price of the good.
______8 For a firm in a perfectly competitive industry, marginal revenue equals the market price.
______9 Firms maximize prefects by producing where total revenue equals total cost
______10 In the short run, perfectly competitive firms can make economic profits or losses.
______11 In the short run, a firm should never have to lose more than its fixed costs.
______12 IF price is greater than average variable cost for some range of output, the firm should produce in the short run.
______13 The firm’s marginal cost curve is also its short-run supply curve.
______14 If the market demand curve and the market supply curve intersect at a price of $5, the minimum point of the A VC curve must be below $5.
______15 In the long run, perfectly competitive firms can make economic profits.
______16 In long-run equilibrium, the competitive fu-in produces at the minimum point of its long-run average
______17 A decrease in market demand causes some competitive firms to leave the industry in the long run.
______18 The industry long-run supply curve always slopes upward.
______19 Where there is productive efficiency there must also be allocative efficiency.
______20 Producer surplus is positive only when economic profits are positive.

21.Rent seeking is an important type of productivity activity.
22.The median voter model says that the policy that is the first choice of most people will be selected.
23.The Gini coefficient is a part of the Lorenz Curve analysis.
24.All monopolist maximizes profit by selecting the rate of output where price equals marginal cost.
25.The firm’s marginal cost curve is also its short-run supply curve.
26.The difference between accounting profit and economic profit is in treatment of implicit costs.
27.Along the demand curve ,price measures the value of the marginal utility derived from the last unit of consumption.
28. If demand for a good is price elastic,the producer can increase total revenue by lowering the price of the good.
29.An increase in the price of a required resourse will cause a change in quantity demanded of the good produced with it.
30. A natural monopoly exists when one firm controls all of a natural resource.

definition of concepts
1.natural monopoly: a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms.
2.monopoly: a firm that is the sole seller of a product without close substitutes.
3.price discrimination: the business practice of selling the same good at different prices to different customers.
3.Perfect(First Degree) price discrimination describes a situation where a monopolist knows exactly the willingness to pay of each customer and can charge each customer a different price.
4.Second-degree price discrimination is pricing according to quantity consumed--or in blocks.
5.Third-degree price discrimination is feasible when the seller can separate his/her market into roups who have different price elasticities of demand (e.g. business air travelers versus vacation air travelers)
6. oligopoly: a market structure in which only a few sellers offer similar or identical products.
7. monopolistic competition: a market structure in which many firms sell products that are similar but not identical.
8. Nash equilibrium: a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all the other actors have chosen.
9. game theory: the study of how people behave in strategic situations.
10. prisoners’ dilemma: a particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial.
11. dominant strategy: a strategy that is best for a player in a game regardless of the strategies chosen by the other players.
12. competitive market: a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker.
13. marginal revenue: the change in total revenue from an additional unit sold.

14.A shutdown refers to the short-run decision not to produce anything during a specified period of time because of current market conditions.
15.Exit refers to a long-run decision to leave the market.
One important difference is that, when a firm shuts down temporarily, it still must pay fixed costs. If a firm shuts down, it will earn no revenue and will have only fixed costs (no variable costs). Therefore, a firm will shut down if the revenue that it would get from producing is less than its variable costs of production:

Shut down if P<AVC.
16. sunk cost: a cost that has been committed and cannot be recovered.

17. explicit costs: input costs that require an outlay of money by the firm.
18. implicit costs: input costs that do not require an outlay of money by the firm.
19. economic profit: total revenue minus total cost, including both explicit and implicit costs.
20. accounting profit: total revenue minus total explicit cost.
If implicit costs are greater than zero, accounting profit will always exceed economic profit.
21. production function: the relationship between quantity of inputs used to make a good and the quantity of output of that good.
22. marginal product: the increase in output that arises from an additional unit of input.

As the amount of labor used increases, the marginal product of labor falls.
23. diminishing marginal product: the property whereby the marginal product of an input declines as the quantity of the input increases.
24. marginal cost: the increase in total cost that arises from an extra unit of production.

25. efficient scale: the quantity of output that minimizes average total cost.
26. economies of scale: the property whereby long-run average total cost falls as the quantity of output increases.
27. diseconomies of scale: the property whereby long-run average total cost rises as the quantity of output increases.
28. constant returns to scale: the property whereby long-run average total cost stays the same as the quantity of output changes.

29. excludability: the property of a good whereby a person can be prevented from using it.
30. rivalry: the property of a good whereby one person’s use diminishes other people’s use.
31. private goods: goods that are both excludable and rival.
32. public goods: goods that are neither excludable nor rival.
33. common resources: goods that are rival but not excludable.
34.If a good is excludable but not rival, it is an example of a natural monopoly.
35. free rider: a person who receives the benefit of a good but avoids paying for it.
36. externality: the uncompensated impact of one person’s actions on the well-being of a bystander.
37. internalizing an externality: altering incentives so that people take account of the external effects of their actions.
38. coase theorem: the proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own.
39. transaction costs: the costs that parties incur in the process of agreeing and following through on a bargain.
40. Pigouvian tax: a tax enacted to correct the effects of a negative externality.
41. deadweight loss: the fall in total surplus that results from a market distortion, such as a tax.
42. welfare economics: the study of how the allocation of resources affects economic well-being.
43. consumer surplus: a buyer’s willingness to pay minus the amount the buyer actually pays.
44. producer surplus: the amount a seller is paid for a good minus the seller’s cost.
45. price ceiling: a legal maximum on the price at which a good can be sold.
46. price floor: a legal minimum on the price at which a good can be sold.
47. law of demand: the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.
48. normal good: a good for which, other things equal, an increase in income leads to an increase in demand.
49. inferior good: a good for which, other things equal, an increase in income leads to a decrease in demand.
50. substitutes: two goods for which an increase in the price of one good leads to an increase in the demand for the other.
51. complements: two goods for which an increase in the price of one good leads to a decrease in the demand for the other.
52. law of supply: the claim that, other things equal, the quantity supplied of a good rises when the price of the good rises.
53. the law of supply and demand: the claim that the price of any good adjusts to bring the supply and demand for that good into balance.
54. absolute advantage: the comparison among producers of a good according to their productivity.
55. opportunity cost: whatever must be given up to obtain some item.
56. comparative advantage: the comparison among producers of a good according to their opportunity cost.
57. production possibilities frontier: a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology.
58. positive statements: claims that attempt to describe the world as it is.
59. normative statements: claims that attempt to prescribe how the world should be.
60. human capital: the accumulation of investments in people, such as education and on-the-job training.
61. budget constraint: the limit on the consumption bundles that a consumer can afford.
62. indifference curve: a curve that shows consumption bundles that give the consumer the same level of satisfaction.
63. marginal rate of substitution: the rate at which a consumer is willing to trade one good for another.
64. perfect substitutes: two goods with straight-line indifference curves.
65. perfect complements: two goods with right-angle indifference curves.
66. normal good: a good for which an increase in income raises the quantity demanded.
67. inferior good: a good for which an increase in income reduces the quantity demanded.
68. income effect: the change in consumption that results when a price change moves the consumer to a higher or lower indifference curve.
69. substitution effect: the change in consumption that results when a price change moves the consumer along a given indifference curve to a point with a new marginal rate of substitution.
70. Giffen good: a good for which an increase in the price raises the quantity demanded.
71. moral hazard: the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior.
72. agent: a person who is performing an act for another person, called the principal.
73. principal: a person for whom another person, called the agent, is performing some act.
74. adverse selection: the tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party.
75. signaling: an action taken by an informed party to reveal private information to an uninformed party.
76. screening: an action taken by an uninformed party to induce an informed party to reveal information.
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