ECO 105 Lecture Notes - Lecture 5: Imperfect Competition, Production Function, Marginal Product

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apricotmoose994

2 Mar 2017

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Market has many buyers an sellers, none big enough to influence market price. Buyers and sellers are well informed about the market. Freedom of entry and exit of the markets. Price taker: is a firm that has no influence over the price at which it sells its product. Price seller: has control over the prices they charge. Does(cid:374)"t (cid:373)ea(cid:374) they ca(cid:374) charge a(cid:374)y price that they wa(cid:374)t. How much of a product to make. Factor of production: is an input used in the production of a good service. A fixed factor of production: is an input whose quantity cannot be altered in the short run. A variable factor of production: is an input whose quantity can realter in the short run. It is the period of time in which a business or firm has an input, fixed. Total level of output reaches a limit.

Related Questions

A. When two goods must be bought in a package (with a fixed ratio), they are

tied
separated
aggregated
bundled

B. Assuming the same cost structure, a competitive market produces ________ output at ________ prices than a monopoly market.

less; lower
more; lower
more; higher
less; higher

C. A market is considered perfectly competitive if

I. there is a lot of product differentiation amongst sellers.

II. there are many sellers, each small relative to the total market.

III. the product sold is similar across sellers.

IV. there are only a few buyers.

I and II only
I, II, and III only
II, III, and IV only
II and III only

D. If most cartel members keep their agreement to cut back production:

the losses associated with cheating are internalized by the cheater
it's profitable in the short run for another member to increase production
cheating by another member won't be detected
it's not profitable in the short run for another member to increase production

E. A perfectly prices discriminating monopolist produces until:

P = MC
MR = AC
P = MR
MR = MC

F. A dominant strategy is a strategy that a player should take only if the other player cheats. True/False.

G. A cartel can remain powerful even when all the members engage in secret price cuts. True/False.

H. Competitive firms want to enter industries in which

P < MC
P = MC
P < AC
P > AC

I. If a homer operates a small bakery and sells donuts for $4/dozen, he should:

sell an additional dozen donuts as long as the total cost of producing an additional dozen donuts is less than $4.
sell an additional dozen donuts as long as the marginal cost of producing an additional dozen donuts is less than $4.
only sell more donuts if his total revenue is greater than his total cost.
sell an additional dozen donuts so long as the fixed cost of production is greater than $4.

jadeeel716

1. In the formula for Bayes theorem if the w-probability is greater than the zero than the a-probably is less than the b-probability

true or false

2. posted offer markets with at least two sellers will generate prices that remain a little above prices from double auction markets

3. running the price clock in a dutch auction once will produce higher observed prices compared to running the clock twice

4. if losers pay winners in a sealed bid auction then they will eventually be willing to bid up to 50 percent more than the winning prize

5. with only one seller in a posted offer market prices willl tend to move upward toward the monopoly price

6. adjusting the concentration of sweet versus sour enabled rats to have a large negative income effect for sour water

7. a sales tax on large luxury boats will impact the buyers more than the sellers of these boats causing the buyers to pay more than half the cost of the sales tax

8. if each seller knew all of the sellers unit costs and the buyers knew all of the buyers unit values a buyer or seller would be able to calculate the competitive equilibrium price before an experiment began

9. suppose your income taxes rise only on incomes over 250,000 annualkly then your after tax income will be unafftected if your annual income is 100,000

those first nine are true and false

these are short answer

1. explain the logical steps to explain how negative price effects can reult from the negative income effects

2.what happens to observed prices inposted offer and double auction markets as the number of sellers drops to 2. what happens when these two markets sellers drops to 1

3. in a looser pay winner auction. why do bidders change their minds toward wanting to bid well above the value of the price even though they refused to do so at the beginning. how does this experiment explain why george bush and citizens changed their minds about preemptive attack on iraq. how do these experiments explain why england wanted to tax trade in the american colonies which led to rebellion and the formation of the us.

if you could help with any of these thatd be great

viridianweasel299

1. In the formula for Bayes theorem if the w-probability is greater than the zero than the a-probably is less than the b-probability

2. posted offer markets with at least two sellers will generate prices that remain a little above prices from double auction markets

3. running the price clock in a dutch auction once will produce higher observed prices compared to running the clock twice

4. if losers pay winners in a sealed bid auction then they will eventually be willing to bid up to 75 percent more than the winning prize

5. with only one seller in a posted offer market prices willl tend to move upward toward the monopoly price

6. adjusting the concentration of sweet versus sour enabled rats to have a large negative income effect for sour water

7. a sales tax on large luxury boats will impact the buyers more than the sellers of these boats causing the buyers to pay more than half the cost of the sales tax

9. suppose your income taxes rise only on incomes over 250,000 annualkly then your after tax income will be unafftected if your annual income is 100,000

Short Essay Questions

1. Recall the loser pay winner auction experiment done in class.

a. Discuss how these experiments explain why the bidder changed their minds toward wanting to bid well above the value of the prize, even though they refused to do so at the beginning

b. Discuss how the experiment explains why George Bush and many citizens changed their minds about a

ECO 105 Lecture Notes - Lecture 5: Imperfect Competition, Production Function, Marginal Product

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