AGEC 2003 Chapter : AGEC Chapter 7 Review

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azuremammoth471

15 Mar 2019

School

LSU

Department

Agricultural Economics

Course

AGEC 2003

Professor

All

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Document Summary

Economic efficiency- allocating resources (or consumption expenditures) in different possible uses so as to maximize net economic benefits (or satisfaction) Economic rent- return in excess of opportunity cost (the value of other opportunities given up in order to produce or consumer any good). Normal profits- a situation in which each of the firm"s resources is earning a return just equal to its opportunity cost. Price searcher- a buyer or seller in an imperfectly competitively market structure who has market power and can determine the price or the quantity sold. Price taker- a buyer or seller without market power in a purely competitive market. Pure competition- a market organization of many firms in an industry, a homogeneous product, and the freedom of firm to enter or to leave the industry. No firm in this type of industry can influence the market price of its product. Pure monopoly- a market organization of one firm in an industry.

Related Questions

Match the following.

constant-cost industry	A market structure in which a large number of firms sell a homogenous product or service with no restrictions on entry or exit and each firm is a price-taker.
increasing-cost industry	The demand facing a price-taking firm.
long-run equilibrium	A firm produces zero output but must still pay its fixed costs.
marginal revenue product	Price below which a firm shuts down in the short run.
perfect competition	All firms produce where price equals long-run marginal cost, and economic profits are zero.
perfectly elastic demand	Industry in which input prices rise as all firms in the industry expand output.
shut down	Industry in which input prices remain constant as all firms in the industry expand output.
the shut-down price	The additional revenue earned by hiring one more unit of a variable input.

viridianhare336

1. Which of the following is a difference between a perfectly competitive market and a monopoly?

A. There are huge barriers to entry in a perfectly competitive market, while there are no barriers to entry in a monopoly.

B. The market demand curve faced by a perfectly competitive firm is horizontal, while the market demand curve in a monopoly is downward-sloping.

C. The sellers in a perfectly competitive market are price-makers, while a seller in a monopoly market is a price-taker.

D. The equilibrium price in a perfectly competitive market exceeds marginal revenue, while the equilibrium price in a monopoly equals marginal revenue.

2. Which of the following firms is likely to have the highest market power?

A. An oligopoly with homogeneous products

B. A monopoly

C. A monopolistic competitor

D. A perfectly competitive firm

graygrasshopper945

The terms price maker, price setter, and price searcher are all meant to imply the same thing, which is

Select one:

a. firms operating in a perfectly competitive market have pricing power.

b. it is impossible for any firm to have pricing power.

c. a firm operating in any market but perfect competition that also determines the quantity it produces and the price at which it sells the products.

d. any firm can determine the price at which it sells a product, but no firm can determine the quantity it produces.

e. a price increase will likely drive every customer for the producer of this product to another product.

In monopoly,

Select one:

a. the number of firms is large.

b. there is ease of entry into the market and exit from the market.

c. the product has many good substitutes.

d. economic profits are zero in the long run.

e. None of these choices.

AGEC 2003 Chapter : AGEC Chapter 7 Review

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