Economics: Part 5 - Profits, Competition, Eternality, & Public Good

What refers to how firms maximize profit?

Profit Maximization

Firms maximize profit, which means they are not going to settle for anything less than the ________________ between total revenue and total cost

Highest Possible Difference

Profit Maximization

The perfectly competitive firm cannot change the price; it can only _________.

Adjust Output

Profit Maximization

To maximize profit, the firm _______ the output to maximize.

Selects

Profit Maximization

“To maximize profit, the firm [Insert Answer From Another Flashcard] the output to maximize.” What is the formula used to compute for this?

[1]_________  = [2] _________ - [3]_________ 

1) Economic Profit
2) Total Revenue
3) Total Cost

What type of competition describes market structures where one or more assumptions of perfect competition are not met, granting firms some market power to influence prices and output.

Imperfect Competition

Key examples of imperfect competition include [1]_________ (one seller), [2]_________ (few dominant sellers), [3]_________ (one buyer), and [4]_________ (many sellers with differentiated products)

1) Monopolies
2) Oligopolies
3) Monopsony
4) Monopolistic Competition

Imperfect competition market structures are more common than perfect competition and can lead to market inefficiencies, but it also provides _________.

Product Variety

What refers to the cost or benefit caused by an economic actor that is not suffered or enjoyed by that same actor?

Externality

Externality is an _______or_______  imposed on a third party by the economic activity of another party who is not directly involved in the transaction, and these costs or benefits are not reflected in the market price of the good or service.

Indirect Cost or Benefit

Externalities can be [1]_______, imposing costs like pollution, or [2]_______, conferring benefits like improved public health from vaccinations.

1) Negative
2) Positive

What do you call a product or service that is both non-rivalrous and non-excludable?

Public Good

Public Goods

When it comes to public goods, one person’s use does not diminish its [1]_______ for others, and no one can be [2]_______ from using it.

1) Availability
2) Prevented

Give 3 Examples of Public Goods.

1) National Defense

2) Street Lighting

3) Clean Air

Public Goods

Because private markets often under-provide public goods, they are typically [1]_______ and provided by governments or businesses through [2]_______ and other revenues.

1) Funded
2) Taxes