Peregrine Exam: Microeconomics Review Question and answers rated A+ 2023
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Peregrine: Microeconomics
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Peregrine: Microeconomics
Peregrine Exam: Microeconomics Review Question and answers rated A+ 2023
Consumer Surplus (CS) - correct answer - (Maximum Buying Price)-(Price Paid)
- Difference between the max price a buyer is willing to pay for a good or service and they price paid
Producer Surplus (PS) - correct ans...
Peregrine Exam: Microeconomics Review Question and answers rated A+ 2023
Consumer Surplus (CS) - correct answer - (Maximum Buying Price)-(Price Paid)
- Difference between the max price a buyer is willing to pay for a good or service and they price paid
Producer Surplus (PS) - correct answer - (Price Received)-(Minimum Selling Price)
- Difference between price received for a good or service and the minimum selling price
Price Ceiling - correct answer When governments place a limit on how high a producer may charge for his product
Price Floor - correct answer A legal minimum on the price at which a good can be sold
Fixed Costs (FC) - correct answer Costs that do not vary with output
Variable Costs (VC) - correct answer Costs that vary with output
Total Cost (TC) - correct answer - The sum of fixed costs and variable costs
- TC = TFV + TVC
Marginal Cost (MC) - correct answer The change in total cost that results from a change in output
Average Fixed Cost Curve - correct answer Decrease due to spending
Average Variable Cost Curve - correct answer Decrease due to gains from specialization, then increase due to diminishing marginal returns
Average Total Cost Curve - correct answer - U-shaped in the short run (reflects decreasing costs due to spreading versus increasing costs due to diminishing marginal returns)
- Flatten out in long run (fixed costs become variable in the long run)
Marginal Cost Curve - correct answer Moves with Average Total Cost
- Decrease due to gains from specialization
- Increase due to diminishing marginal returns
If Marginal Cost is LESS than ATC - correct answer ATC decreasing --> More gains from specialization
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