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Summary AP Micro Midterm Review latest exam 2024
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AP Micro Midterm Review latest exam 2024
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AP Micro Midterm Review latest exam 2024If the only two firms in an industry successfully collude to maximize their joint
profit, the price for the product will be _______________. - Above the marginal
cost of production
If there are many firms in an industry and each firm's product is indistinguishable
from the products of all other firms, the individual firm's demand curve will be
____________________. - Horizontal and identical for each firm
What does it mean if an economy has a straight-line production possibilities
curve? (2) - 1. The opportunity cost of producing another unit is constant
2. Resources are completely adaptable to alternative uses
In the short run, a perfectly competitive firm should shut down whenever
_____________. - Minimum average variable cost exceeds price
A constant-cost, perfectly competitive industry is in long-run equilibrium. If the
demand for the good increases, the price will ___________. - Remain unchanged
What is the least-cost combination of capital and labor needed to produce a given
level of output? - MPL/PL = MPK/PK
,AP Micro Midterm Review latest exam 2024
When marginal product exceeds average product, average product is _______. -
Increasing
If a firm is maximizing short-term profits and price is greater than average variable
cost, at the firm's level of output marginal revenue is ________________ marginal
cost. - Equal to
What is economics? - The social science concerned with how individuals,
institutions, and society make optimal choices under conditions of scarcity
What is an opportunity cost? - The value of the next best thing
What do individual consumers look for? - Opportunities to increase their utility
What is utility? - Pleasure, happiness, or satisfaction obtained from consuming a
good or service
What is marginal analysis? - Comparisons of marginal benefits and marginal costs,
usually for decision making
, AP Micro Midterm Review latest exam 2024
What is microeconomics? - The part of economics concerned with decision
making by individual customers, workers, households, and business firms
What is the other-things-equal assumption? - The assumption that factors other
than those being considered by the economist do not change
What is the difference between positive and normative economics? - Positive
economics concerns what is (describes economic behavior and what the economy
is like) while normative economics concerns what ought to be (value judgements
about what the economy should be like or how to achieve certain goals)
What is the economizing problem? - The need to make choices because economic
wants exceed economic means
What are the factors of production? - Land, labor, capital, and entrepreneurial
ability
What assumptions are made by the Production Possibilities Model? (4) - Full
employment (the economy is employing all of its available resources)
Fixed resources (the quantity and quality of the factors of production are fixed)
Fixed technology (the state of technology is constant)
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