Test#2 Study Guide
Test#2 will consist of 20 True/False questions, and a graphical analysis section.
The following topics will be covered on the second test.
True/False section:
- Explicit cost
- Implicit cost
- Accounting profit
- Economic profit
- Total revenue
- Profit
- Marginal revenue
- Long run
- Short run
- Marginal product of labor
- Diminishing returns
- Total cost curve
- Marginal cost curve
- Average fixed cost curve
- Scale effects
- Sunk cost
- Price-takers
- Market share in Perfect Competition
- The price-taking firm's optimal output rule
- The break-even price
- Fixed cost and short-run production
- The shut-down price in the short-run
Graphical Analysis Section:
Remember to label graphs fully!
Be able to graphically illustrate a price-taking firm's profit-maximizing quantity of output.
Be able to graphically illustrate production and costs in the short-run identifying the break-even price for a perfectly competitive firm.
Be able to graphically illustrate the market as a whole versus the market for an individual farmer given appropriate data for the market price, and quantity.