Microeconomics: Demand and Supply Analysis

A firm is defined as an organization that employs factors of production to produce a good or service that it hopes to ______________ sell

The two types of production costs are explicit (accounting) costs and ______________ costs

Accounting profit is total revenue - ______________ costs

Economic profit is total revenue - explicit costs - ______________ costs

In perfect competition, firms face ______ demand curves at the market's equilibrium price.

The short run is the time over which at least one production input is ______________ and can't respond to a shift in demand

Fixed inputs cannot be changed in the short run, whereas ______________ inputs can

In perfect competition, individual firms are too small to change anything about the ______.

The marginal product of labor (MPL) is the change in TPL resulting from a change in ______________ input

The Method of 'Totals' is used to maximize ______ profit.

In perfect competition, P = ______ = AR.

The law of diminishing marginal returns states that as more of a variable resource is allocated to production, the marginal product ______________

The factor (P - ______) represents profit-per-unit.

Average total cost (ATC) is total cost divided by ______________

If TR < ______, firms stop production and suffer losses equal to TFC.

Economies of scale are advantages of greater scales of production and happen where LRAC is ______________

In a ______ industry, entry/exit has no effect on cost curves.

A ______ monopoly arises where ATC for large firms >> ATC for small ones.

Monopolies operate on the upper half (elastic half) of the ______ curve.

Allocative ______ has the most net benefit to society.

The law of ______________ states that, holding all else equal, there is an inverse (negative) relationship between the price and the quantity demanded of a good.

Nominal (absolute, money) prices are meaningless because they are ______________ (i.e. $3/gal gas now isn't necessarily more expensive than $1/gal gas fifty years ago)

The ______________ effect is the change in quantity demanded of one good that results in the change in another good's relative price.

A demand ______________ is a table that summarizes a good's quantity demanded at certain prices.

The law of supply states that, holding all else equal, there is a direct (positive) relationship between the price and the quantity ______________ of a good.

The determinants of demand influence the willingness and ability of the consumer to purchase units of a good or ______________.

A market is in ______________ if QS = QD.

Consumer surplus occurs when consumers pay for less than they'd be willing to, this is the area above equilibrium and below the ______________ curve.

Producer surplus occurs when producers receive enough to cover the MC, and then some, this is the area below equilibrium and above the ______________ curve.

At equilibrium, total ______________ is maximized.

The lowest 20% of the population has ______% of the wealth.

Income distributions can also be displayed graphically with a ______ curve.

The Gini ratio = A / (A + ______) = above / (above + ______).

In the United States, income is redistributed through ______.

A progressive tax exists if, as income increases, the average ______ rates increase.

A regressive tax exists if, as income increases, the average ______ rates decrease.

Collusive pricing involves ______ between direct competitors.

Cartels are groups of firms that formally agree not to compete with each ______.

In a competitive labor market, firms can employ as much labor as they want at the market ______.

The marginal revenue product of labor is a measure of what the next unit of labor brings to the ______.

In a perfectly competitive labor market, MRPL equals MRC equals ______.

The law of demand applies seamlessly to ______ markets.

The demand for an input is derived from the demand for the good produced by that ______.

An increase in the demand for lemonade will also lead to an increase in demand for workers who produce ______.

The higher a resource's quality, the more ______ it is, generally.

If the effect of substitution effect is greater than the output effect, labor demand will ______.