Micro Chapter 12-15

is the condition in which the economy is producing what people want at the least possible cost.

is a cost or benefit resulting from some activity or transaction that is imposed or bestowed on parties outside the activity or transaction.

is the condition that exists when all markets in an economy are in simultaneous equilibrium.

Is an industry in which single firms have some control over price and competition. Imperfectly competitive industries give rise to an inefficient allocation of resources

is the absence of full knowledge concerning product characteristics, available prices, and so forth. The absence of full information can lead to transactions that are ultimately disadvantageous.

occurs when resources are misallocated, or allocated inefficiently. The result is waste or lost value. Evidence of market failure is revealed by the existence of: • Imperfect market structure • Public goods • External costs and benefits • Imperfect information

is an industry composed of only one firm that produces a product for which there are no close substitutes and in which significant barriers exist to prevent new firms from entering the industry.

is a condition in which no change is possible that will make some members of society better off without making some other members of society worse off.

Is the process of examining the equilibrium conditions in individual markets and for households and firms separately.

are products produced by firms for sale to individual households. Private provision of public goods fails. A completely laissez-faire market will not produce everything that all members of a society might want. Citizens must band together to ensure that desired public goods are produced, and this is generally accomplished through government spending financed by taxes.

are goods and services that bestow collective benefits on members of society. Generally, no one can be excluded from enjoying their benefits. The classic example is national defense.

If PX > MCX, society gains value by producing more X
If PX < MCX, society gains value by producing less X

is something that prevents new firms from entering and competing in imperfectly competitive industries. incude:Government franchises, or firms that become monopolies by virtue of a government directive.Patents or barriers that grant the exclusive use of the patented product or process to the inventor. Economies of scale and other cost advantages enjoyed by industries that have large capital requirements. A large initial investment, or the need to embark in an expensive advertising campaign, deter would-be entrants to the industry.Ownership of a scarce factor of production: If production requires a particular input, and one firm owns the entire supply of that input, that firm will control the industry.

is the act of working with other producers in an effort to limit competition and increase joint profits.

Is an industry in which single firms have some control over the price of their output