UA EC 110 - Exam Review and Chapters 13 and 14 Summaries (3 pages)

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Exam Review and Chapters 13 and 14 Summaries



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Exam Review and Chapters 13 and 14 Summaries

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Lecture number:
21
Pages:
3
Type:
Lecture Note
School:
University of Alabama
Course:
Ec 110 - Prin of Microeconomics
Edition:
1

Unformatted text preview:

ECON 110 Lecture 21 Outline of Last Lecture I Clicker Questions II Competitive Markets a Marginal Revenue b Maximizing Profit III Long Run Equilibrium Outline of Current Lecture I Exam Details a Details b Overview of Chapters 13 and 14 II Clicker Question III Competitive Markets Summary IV Shut down Decision V Profit Equations Current Lecture Review for Exam Three Exam Details 45 questions o 29 regular multiple choice o 16 problem based multiple choice Bring your pencil ID and scientific calculator It covers chapters 13 and 14 Chapter details to review Chapter 13 o Costs and profit o Production and cost relationships Production function The short run Diminishing marginal product Cost Curves The Long Run Cost Curves These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Economies and Diseconomies of scale Chapter 14 o Market Structures o Perfect Competition Price taking firms P MR o Short Run Profit maximization MR MC P o Profit TR TC o Firm Supply Curve the part of the marginal cost curve that is less than the average cost curve o Shut down decision o Long run Equilibrium MC ATC A particular output is associated with a price Clicker Quesiton Sam operates a landscaping business and regularly takes care of twenty lawns charging 30 week His weekly costs are 750 of which 160 are fixed In the short run Sam should A B C D Shut down Continue to operate both in the short run and in the long run Continue to operate in the short run but exit the market in the long run Shut down now but reopen later when the price rises Answer C The total revenue 600 is greater than the variable cost 590 so it makes sense to operate in the short run D does not work because you have no guarantee that the price will rise later To summarize competitive markets They require a fixed price and many buyers and sellers who all have little influence over the price They require homogenous relatively



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