Allocative efficiency is

Combination of goods and services consumers want

A loss of welfare by an individual or group

When you have a surplus, to reach equilibrium the:

Price decreases, QD increases, QS decreases

An decrease in supply means

The supply curve shifts left at each and every price

The benefit consumers receive over and above what they pay

Include accounting costs and opportunity costs

Total Revenue divided by Quantity

Supernormal profit is

Is a return that is more than sufficient

The horizontal summation of all individual demand curves

A shut down point is where

Revenue just covers variable costs

The horizontal summation of all individual supply curves

Market Demand is greater than Market Supply

A natural monopoly is when

One firm can supply the entire market at a lower price

The law of supply states

The higher the price the higher the quantity supplied

studbud

Year 13 Economics

40 termsStudBud Administration81 plays

Imported from external platform

Flashcards40 cardsFPractice quizPHost liveL

Questions 40

Answers

1
Break even profit is the same as
Normal Profit
Super Normal Profit
Shut down point
Sub Normal Profit
2
Allocative efficiency is
Combination of goods and services consumers want
Any point on the PPF
When producers earn more than they thought they would
Not achieveable
3
Dead weight loss is
The revenue a producer loses when a tax is placed on a good
A change in equilibrium
A loss of welfare by an individual or group
What happens when you are in the dead sea floating
4
When you have a surplus, to reach equilibrium the:
Price increases, QD increases, QS increases
Price increases, QD decreases, QS decreases
Price decreases, QD decreases, QS decreases
Price decreases, QD increases, QS decreases
5
A monopsony is a single buyer of a commodity. Which of the following is not a monopsony
Air NZ
NZ Kiwifruit Marketing Board
NZ Apple and Pear Marketing Board
Fonterra
6
An example of price competition is
24 hour service
20% extra for free
Competitions and prizes
Gift with purchase
7
The vertical gap between AC and AVC is
MC
MR
AR
AFC
8
Producer revenue is
Price/ Quantity
Individual Quantity
Total costs to a producer
Price X Quantity
9
An decrease in supply means
The supply curve shifts left at each and every price
There is a movement down the supply curve
There is a movement up the supply curve
The supply curve shifts right at each and every price
10
With a perfectly competitive firm
MR = MC
MR = P = D
MR = AC
MR = P = D = AR
11
The nature of a monopolistically competitive firms product is
There are many identical products
It has no subsitute
They are homogeneous
They are differentiated
12
The profit maximising point is where:
MC = MR
MC = AC
MC = AR
MC = AVC
13
What doesn't cause a shift of the demand curve
Costs of production increase
Price of a substitute decreases
Decreased disposable income
Increased advertising
14
A tariff placed on imports
Decreases the world price
Has no effect on the NZ price
Increases the world price
Decreases the NZ price
15
Consumer surplus is
The benefit consumers receive over and above what they pay
The price they can negotiate
The price they pay x the amount they purchase
When market supply is greater than market demand
16
Economic costs
Include accounting costs
Include opportunity costs
Are the raw material costs of a business
Include accounting costs and opportunity costs
17
Average Revenue is
Marginal Revenue less Cost
Total Revenue divided by Quantity
Price X Quantity
Price divided by Quantity
18
AC pricing for a monopoly is where
AC = MR
AC = AR
AC = MC
AC = VC
19
Which of the following is not an indirect tax
GST
Excise Tax
Sales Tax
Income Tax
20
Supernormal profit is
Is not sufficient enough to keep an entrepreneur in business
Is lower than normal profit
Is sufficient to keep the entrepreneur in business
Is a return that is more than sufficient
21
The nature of a monopolists product is
There are no substitues
They are all the same
They are homogeneous
They are differentied
22
Market Demand is
The horizontal summation of all individual demand curves
The same as individual demand
Total demand divided by output
All individual supply curves added together
23
If a firm is making supernormal profit, other firms will
Decrease their price
Enter the market
Increase their price
Exit the market
24
A subsidy will mean an
An decrease in quantity supplied
An increase in supply
Increase in quantity supplied
A decrease in quantity supplied
25
Supply will shift right (increase) when:
GST increases
Wages increase
Costs of production decrease
Productivity decreases
26
A shut down point is where
Price equals Average Revenue
Revenue covers all costs
Revenue just covers variable costs
Marginal Revenue = Average Revenue
27
There are three places a natural monopoly may produce at, which is incorrect
MC pricing (MC = AR)
AFC pricing (AFC = AR)
Profit Maximising Point (MC= MR)
AC pricing (AC = AR)
28
Marginal utility stands for
Extra satisfaction
Extra gains
Demanding more
Demanding less
29
Market supply is
The higher the price the lower the quanitity supplied
The total amount supplied less the total amount demanded
The horizontal summation of all individual supply curves
The horizontal summation of all individual demand curve
30
A shortage is when
Market Demand equals Market Supply
Market Demand is greater than Market Supply
Market Supply is greater than Market Demand
A restriction on imports
31
An oligopoly has
An elastic demand curve
A kinked demand curve
A perfectly competitive demand curve
An inelastic demand curve
32
Marginal Revenue is not
Total Revenue 2 less Total Revenue 1
Average Revenue X Quantity
The difference between Total Revenue 2 and Total Revenue 1
The extra revenue gained from producting one extra unit
33
To sell an additional unit an monopolist must
Produce more goods
Lower their price
Give away free samples
Increase their price
34
A tax on imports is
GST
Quota
Tariff
Not good
35
A natural monopoly is when
An example of what McDonalds is
There is only two firms, one large and one smaller
One firm can supply the entire market at a lower price
When the monopoly is dealing with natural resources
36
The law of supply states
The higher the price the lower the quantity supplied
The higher the price the higher the supply
The higher the price the higher the quantity supplied
The higher the price the lower the supply
37
For a monopolist the MR curve is
Upward sloping to the right
Vertical
Horizontal
Downward sloping to the right
38
A natural monopoly has
Government ownership
High set up costs
Identical products
Weak barriers to entry or exit
39
Which is not a characteristic of a perfectly competitive firm
Only two sellers in the market
No barrier to entry
Homogeneous product
Price Taker
40
MR = MC
Is the allocatively efficient point
Is the AC pricing point
Is the MC pricing point
Is the profit maximising point

Year 13 Economics Flashcards | StudBud