Flashcards
Chapter 7 Econ Review
Cards in this deck (34)
- 1Perfect Competitiona classification system based on the number/size of firms, type of product, and type of competition in the market
- 23 requirements of perfect (pure) competition1. Very large # of buyers + sellers
2. Identical products
3. Freedom of entry + exit - 3Monopolistic Competitionhas all the conditions of pure competition except for identical products. Form of imperfect competition
- 4Product Differentiationinvolves real or imagined differences between competing products in the same industry
- 5Non-price competitionbased on a product's appearance, quality, or design, rather than its price (ads are very important)
- 6Oligopolymarket structure that has a few large sellers that dominate the market and have the ability to affect prices in the industry (form of imperfect competition)
- 7Independent behaviora key feature of oligopolies. If one company acts, the other firms follow because there are so few firms & a high risk of loosing customers to other firms.
- 8Collusionan illegal agreement among producers to fix prices, limit output, divide markets, or otherwise agree to reduce competition
- 9Price - fixingan illegal agreement by firms to change uniform price for a product
- 10Monopoliesmarket structure characterized by a single producer (form of imperfect competition)
- 11Laissez-fairethe economic philosophy that government should not interfere with business activity
- 12Natural Monopolya marketstructure in which the average costs of production are lowerst when all output is produced by a single firm
- 13Geographic Monopolya market structure in which a firm has a Monopoly because of its location, or the small size of the market
- 14Technological Monopolya market structure in which a firm has a Monopoly because it owns/controls a manufacturing method, process, or other scientific advantage
- 15Government Monopolya Monopoly that is created and/or owned by the government
- 16Market Failurethe conditions where any of the requirements for a competitive market leads to an inefficient allocation of resources characterized by too much/too little being produced.
- 17adequate competition, knowledge of prices & opportunities, mobility of resources, and competitive pricesRequirements for a competitive market include
- 18Spillover Effectsthe uncompensated side effects that either benefit or harm a 3rd party not involved in the activity that caused it.
- 19by taxing those that are harmful and subsidizing helpful spilloversHow does the government deal with spillovers?
- 20Cost Benefit Analysiscalculation that compares the cost of an action to its benefits
- 21Trustsillegal combinations of corporations or companies organized to suppress competition, which led to more government internvention
- 22they retain/limit the activity or growth of certain companiesHow does the government retain monopolies?
- 23Price Discriminationthe practice of charging different customers different prices for the same product
- 24The Federal Trade Commission Actpassed in the same year to enforce the Clayton Antitrust Act
- 25Clayton Antitrust Actinvolved a Cease & Desist Order requiring a company to stop an unfair business practice that reduces/limits competition
- 26Economies of Scalethe increasingly efficient use of personnel, plant, & equipment that lowers the average of cost of production as a firm becomes larger
- 27Public Disclosurethis requirement forces a business to reveal information about its products/operations to the public
- 28The Consumer Financial Procection Bureaucreated after the Great Recession of 2008-2009 when many home mortgages couldn't be repaid
- 29Mortgagea legal document that pledges ownership of a home to a lender as security for repayment of borrowed money
- 30Forclosurea process in which a leader reclaims the property due to a lack of payment by the borrower
- 31Characteristics of Perfect Competitionmany buyers + sellers, identical products, easy to enter/exit the market, price is based on the market
- 32Characteristics of Monopolistic Competitiondifferentiated products, brand control, many buyers + sellers, low barriers to entry
- 33Characteristics of an Oligopolyfew sellers, similar products, high barrier to entry, market power
- 34Characteristics of Monopoliesone seller, high barrier to enter the market, market power, one identical product
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- Flashcards on Chapter 7 Econ Review, created by Eme Lamberson on 27/10/2024.
- Created by
- Eme Lamberson · Oct 2024
- Updated
- Oct 27, 2024
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