Terms in this set (25)
Allocative efficiency requires that:
Resources be apportioned among firms and industries to yield the mix of products and services that is most wanted by society
A _______ competitive firm's average-revenue schedule is also known as its demand schedule.
What describes the break-even point?
The point where total revenue covers all costs, including implicit and explicit costs
The MR=MC rule is known as the:
_______ efficiency means that resources are distributed among firms and industries to yield a mix of products and services that is most wanted by society.
Productive efficiency requires that
Goods be produced in the least costly way.
In pure competition, a firm's economic profit is equal to its product _______ or _______ revenue minus average total cost multiplied by output.
A basic feature of the purely competitive market is the presence of _______.
________ competition is considered to be rare in the real world.
From an economic standpoint, the break-even point is the level of output at which a firm makes ______ profit.
A zero/a normal
The profit-maximizing rule of MR=MC states that:
In the short run, the firm will maximize profit or minimize loss by producing the output at which marginal revenue equals marginal cost
What condition will cause firms to exit an industry?
If price is less than minimum average total and variable cost, resulting losses will cause firms to leave the industry.
A competitive market strives to generate ______ efficiency and ______ efficiency.
For a perfectly competitive firm, ______ cost is equal to _______ which is equal to marginal ______.
In pure competition, a firm's economic profit is equal to:
Marginal revenue minus average total cost multiplied by quantity/Price minus average total cost multiplied by quantity
The portion of the firm's _____ cost curve lying ______ its average ______ cost curve is its short-run supply curve.
What does not describe a purely competitive market?
Selling in only national markets
_______ is relatively rare in the real world, although this market model is highly ______ to several industries.
What factors will alter costs and shift the marginal cost or short-run supply curve to a new location?
Technology/Prices of variable inputs
A purely competitive market strives toward _____ use of society's scarce resources.
A wage increase would increase marginal costs and shift the supply curve:
Upward/to the left
A competitive firm may realize an economic profit or loss in the _____ run but will earn only a normal profit in the _____ run.
When will a firm earn an economic profit?
When price is greater than average total cost
In a purely competitive market, price per unit to the purchaser is the same as _____ per unit or _____ revenue to the seller.
A firm should not produce a unit of output when the marginal cost is _____ than marginal revenue.
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