Micro Economics ECNM 657 Midterm Definitions and Essay Questions

Definitions for Micro Economic Terms

MICRO ECONOMICS ECNM 657 MIDTERM DEFINITIONS. Define any 10 terms.  Provide examples Equilibrium return on equity Capital return on investment Learning curve economies of scope Average revenue business profit versus Demand economic profit Supply independent versus Shortage dependent variables Surplus parameters & determinants Endogenous variables comparative static analysis Exogenous variables dynamic analysis ESSAY QUESTIONS.   Answer any three questions.   Answer all partsof each question.1.  a)  What are indifference curves ?   Develop and demonstrate via a two dimensional model. b)  Given indifference curves, how is a decision made as to choices ? Demonstrate. c)  What is Utility ?  Demonstrate via a model, explaining total utility and marginal utility. d)  Using Utility analysis:  if one is economically rational, how does he allocate his choices ? 2.  a)   Define and give examples on the following:(1) opportunity cost (2) implicit cost (3) explicit cost (4) historical costs (5) current costs b)  Consider the short run.  Define and explain via table and graphical model the following short run costs considerations:[CONTINUED] (1)  Fixed costs   (total and average) (2)  Variable costs (total and average) (3)  Marginal cost  For short run output determination, what are the essential cost considerations ? c)   What is the long run ?  Explain and demonstrate. d)   What are  “ Economies of Scale ?  Demonstrate and explain. e) Contrast “diminishing economies of scale” (diseconomies of scale) with“diminishing returns”. 3.  a)  Explain the term “market structure”. b)  Develop an analysis/model of perfect competition. (1)  What are the conditions of perfect competition ? (2)  In the short run, what is the industry result ? (3)  Develop a model demonstrating the result for one producer in the short run. (4)  What is the goal of the producer in the short run?  How does he achieve this goal?  (What is “the rule”?) c)  Show and explain adjustments to the short run.  What typically becomes the steady state equilibrium for any one producer ? d)What is the long run in Perfect competition?  What is the typical  result ? e)   Why is this market structure considered to be efficient ?   4.a)  What is imperfect competition ? What are the typical characteristics of imperfect competition? b)  Develop a model and explain the short–run outcome in imperfect competition. c)  Are there adjustments to the short run ?  Can the long-run be predicted ? Explain and Demonstrate. d)  What is monopoly ?  What are its characteristics ? Develop a model and show the outcome of a true monopoly.   e)   How is monopoly different from imperfect competition ?  Demonstrate and explain.