ECON 323 Exam 2 | ECON 311 - MONEY & BANKING, Quizzes of Banking and Finance

Download ECON 323 Exam 2 | ECON 311 - MONEY & BANKING and more Quizzes Banking and Finance in PDF only on Docsity! TERM 1 an L shaped isoquant DEFINITION 1 would indicate that capital and labor cannot be substituted for each other production TERM 2 according to the diagram, where each isoquant output level is marked to the right of the isoquant, production is characterized by DEFINITION 2 increasing returns to scale TERM 3 assume that the average product for 6 workers is 15, if the marginal prouct of the seventh worker is eighteen DEFINITION 3 average product is rising TERM 4 at a given level of labor employment, knowing the difference between the average product of labor and the marginal product of labor tells you DEFINITION 4 how increasing labor use alters the average product of labor TERM 5 a farmer uses M units of machinery and L hours of labor to produce C tons of corn. this production function exhibits DEFINITION 5 decreasing returns to scale for all output levels TERM 6 does it make sense to consider the returns to scale of a production function in the short run? DEFINITION 6 no, we cannot change all of the production inputs in the short run TERM 7 when the market price is held above the competitive level, the deadweight loss is composed of DEFINITION 7 producer and consumer surplus losses associated with units that used to be traded on the market but are no longer exchanged TERM 8 a price support may be pictured by DEFINITION 8 shifting the demand curve to the right by the amount of the government purchase TERM 9 in a short run production process, the marginal cost is rising and the AVC is falling as output increased thus.. DEFINITION 9 marginal cost is below AVC TERM 10 at optimum combination of two inputs DEFINITION 10 all of the above TERM 21 the shutdown decision can be restated in terms of producer surplus by saying that a firm should produce in the short run as long as DEFINITION 21 producer surplus is positive TERM 22 if a competitive firmsmarginal cost always increase with output then at the profit maximizing output level, prodcer surplus s DEFINITION 22 positive because price exceeds AVC TERM 23 in an unregulated, competitive market consumer surplus exists because some DEFINITION 23 consumers are willling to pay more than the equilibrium price TERM 24 in an unregualted, competitive market producer surplus exists because some... DEFINITION 24 producers are wllling to sell at less than the equilibrium price TERM 25 under perfect competition, if an industry is characterized by positive economics profits in the short run DEFINITION 25 firms will enter the market in the long run and the short run supply curve will shift outward TERM 26 a dead weight loss of consumer and/or producer surplus occurs when DEFINITION 26 mutually beneficial transactions cannot be completed TERM 27 in a competitive market, an efficient allocation of resources is characterized by.. DEFINITION 27 the largest possible sum of consumer and producer surplus