AP MICRO
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22 Terms
productive eff
pt costs are minimized
Price elasticity of demand
how sensitive demand is to price changes=
%∆𝑄 / %∆𝑃
Price elasticity of supply
how sensitive supply is to price changes=
%∆𝑄 / %∆𝑆
allocative eff
MR=MC
productive eff
ATC=MC
Economics of scale
The situation when a firm's long-run average costs fall as it increases output
Constant returns to scale
The situation when a firm's long-run average costs remain unchanged as it increases output
Diseconomies of scale
The situation when a firm's long-run average cost rise as the firm increases output
Human capita
The accumulated training and skills that workers possess
Natural monopoly
A situation in which economies of scales are so large that one firm can supply the entire market at a lower average total cost than can two or more firms.
Perfectly Inelastic Demand
coefficient of zero
Relatively Inelastic Demand
coefficient between 0 and 1
Unit Elasticity
1
Relatively Elastic Demand
Greater Than One
Perfectly Elastic Demand
infinity
Perfectly Competitive firm
Monopoly or Monopolistic comp
Monopsony
Perfectly competitive resource market
Price discriminating monopoly
LR Perfect monopolistic comp
Note 
Flashcards (28)