Micro Exam
Chapters 6 & 8
Marginal Product in Labor (MP)
change in output --------------------- change in labor
Average Product of Labor
output ---------------- # of workers
short run total cost (STC)
fixed cost + variable cost (fc) (tvc)
short run marginal cost (SMC)
change in short run total cost change in total variable cost --------------------------------- --------------------------------change in output change in output
average fixed cost (AFC)
fixed cost --------------- output
Short Run Variable Cost (SVC)
total variable cost ---------------------- output
Short Run Average Total Cost (SATC)
Average Fixed Cost + Short Run Average Cost Short run total cost ---------------------------output
Elasticity Equation
% Change in Quantity Demanded ----------------------------------- % Change in Price
Consumer benefit of trade
Max willing to pay - actual amount paid
Producer benefit of trade
Actual amount sold for - lowest price they would sell for
Maximum Price policy (Price Ceiling)
Regulates the max price the good can sell for
Minimum Price policy (Price Floor)
Regulates the minimum price the good can sell for
non-binding
The price ceiling or floor will not affect the market equilibrium
How much tax will be given to consumers
It depends on the price elasticity of demand high elasticity - less tax passed low elasticity - more tax passed
Spillover Cost
Free market equilibrium is inefficient supply curve shifts to the left
Spillover benefits
Causes the Demand curve to shift to the right will be more productive
Short run
You cannot change all factors of production
long run
you can change all factors of production
MP and AP graph
They will hit max, then go down due to diminishing returns
MC, AFC, SAVC, SATC,
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