5 Steps to a 5 AP Microeconomics, 2014-2015 Edition

Price elastic demand: Ed>1 or the (%DQd) >(%DP). Consumers are price sensitive. Price inelastic demand: Ed <1 or the (% ...

Excise tax:A per unit tax on production results in a vertical shift upward in the supply curve by the amount of the tax. Inciden ...

The Firm, Profit, and the Costs of Production IN THIS CHAPTER Summary:The previous chapter focused on the choices made by consum ...

8.1 Firms, Opportunity Costs, and Profits Main Topics:The Firm, Profit and Cost: When CPAs and Economists Collide, Short-Run and ...

So Which Should I Use? This is an excellent question. The “quickie” answer is to turn to the title page of this book, and use th ...

function takes inputs and creates output. In a production function that uses only labor (L) and capital (K): Fixed and Variable ...

Law of Diminishing Marginal Returns Imagine what happens to the lemonade stand as Molly adds more and more workers. At first, ta ...

•If MPL>APL: APLis rising. •If MPL<APL: APLis falling. •If MPL=APL: APLis at the peak. Short-Run Costs It is important to ...

Table 8.3 summarizes Molly’s costs of producing cups of lemonade per minute. Her total fixed costs are assumed to be $6 per minu ...

The Firm, Profit, and the Costs of Production ‹ 109 cost is also calculated as MC =DTVC/DQ. If quantity is changing one unit at ...

110 › Step 4. Review the Knowledge You Need to Score High Marginal Product and Marginal Cost MC =DTVC/DQ, and since the only var ...

The Firm, Profit, and the Costs of Production ‹ 111 Long-Run Costs Since all inputs are variable in the long run, discussion of ...

112 › Step 4. Review the Knowledge You Need to Score High Diseconomies of scaleare illustrated by the rising part of the LRAC c ...

The Firm, Profit, and the Costs of Production ‹ 113 Which of the following cost and production rela- tionships is inaccurately ...

› Rapid Review The firm:An organization that employs factors of production to produce a good or serv- ice that it hopes to profi ...

Relationship between MPLand MC:If labor is the variable input being paid a fixed wage (w), MC and MPLare inverses of each other. ...

Market Structures, Perfect Competition, Monopoly, and Things Between 116 › CHAPTER 9 IN THIS CHAPTER Summary:Chapter 7 presented ...

Market Structures, Perfect Competition, Monopoly, and Things Between ‹ 117 9.1 Perfect Competition Main Topics: Structural Chara ...

118 › Step 4. Review the Knowledge You Need to Score High horizontal. If the market price of barley falls, quantity demanded ris ...

Market Structures, Perfect Competition, Monopoly, and Things Between ‹ 119 Since the only decision to be made by the perfectly c ...