Econ

Front 1

Open market

Back 1

No barriers to entry or exit

Front 2

Closed Market

Back 2

Some barriers to entry or exit

Front 3

P-taker

Back 3

Always open

Front 4

P-searcher

Back 4

Open or closed

Front 5

2 Types of Barriers

Back 5

1. Government imposed barriers

2. Natural Barriers

Front 6

Natural Barriers

Back 6

The size necessary to be competitive is prohibitively large

Front 7

P-Taker: New firms will enter

Back 7

1. Increase Supply -> Price goes down

2. Increase in Demand Inputs -> Price goes down -> Raise ATC

Front 8

P-Taker: Firms will exit

Back 8

1. Decrease Supply -> Price increases

2. Decrease in Demand inputs -> price decreases -> decreases ATC

Front 9

P-Searcher: Imitators enter

Back 9

1. Decrease demand

2. Increase demand inputs -> price increases -> ATC increases

Front 10

P-searcher: Firms exit

Back 10

1. Demand decreases

2. Decrease demand inputs -> Price decreases -> ATC decreases

Front 11

Three Types of Price Searcher

Back 11

Monopolistic Competition, Monopoly, Oligopoly

Front 12

Monopolistic Competition

Back 12

1. Large number of firms

2. Output is of similar quality

3. Barriers, if any, are minor

Front 13

Nonprice competition

Back 13

Maintain or increase quantity without lowering the price

Front 14

Oligopoly

Back 14

A few large firms

Front 15

Collusion

Back 15

Any attempt by players to agree to reduce competition

Front 16

Cartel

Back 16

Firms act as a monopoly tp set price and quantity to maximize

Front 17

Factors that cause cartels to disband

Back 17

1.disagreement over the allocated quotas of production

2. At the higher cartel price, small firms may grow over time

3. At the higher cartel price, new firms will enter

4. There is an incentive to be the first firm to exit the cartel, slightly lower the price, and increase the quantity of production, which will increase their profits for awhile

5. The second law of demand, Demand becomes more elastic over time

Front 18

Why was opec so successful

Back 18

1. Crude oil is not manufactured

2. Political Alliance

Front 19

Why did Opec weaken?

Back 19

1. Political alliance broke down

2. 1-5 of cartel factors

Front 20

Nash Equilibrium

Back 20

A pair of actions such that neither player has an incentive to move

Front 21

Prisoner's dilemma

Back 21

Nash Equilibrium can be strictly dominated by another pair of actions

Front 22

Monopoly

Back 22

Single firm

Front 23

Natural monopoly

Back 23

Decreasing long run average total cost (LRATC) for all quantity

Front 24

What type would be most likely not to operate efficiently

Back 24

Natural Monopoly

Front 25

Total Product of Labor

Back 25

The quantity output as a function of labor, all other inputs held constant

Front 26

Law of Diminishing (marginal) returns

Back 26

Eventually marginal price of Labor will decrease

Front 27

Perfectly competitive labor market (PCLM)

Back 27

All firms are small buyers of labor relative to the market

Front 28

PCLM rule

Back 28

Hire as long as Marginal Revenue product of labor is greater than or equal to Wage*

Front 29

Monopsony

Back 29

Wage is not constant

Front 30

Barriers to Competition

Back 30

1. Minimum wage (Price Floor)

2. Unions

Front 31

Below wage

Back 31

No effect

Front 32

Above wage

Back 32

Causes a surplus

Front 33

Union

Back 33

Collusion by workers

Front 34

Union goals

Back 34

1. Higher wages (total compensation)

2. Better working conditions

3. Job security

Front 35

The firm will:

Back 35

Operate in the LR or SR only