MANAGERIAL ECONOMICS

I. DEFINITIONS. Define these terms. Provide examples

Equilibrium
Capital
Learning curve
Average revenue
Demand
Supply
Shortage
Surplus
Endogenous variables
Exogenous variables
return on equity
return on investment
economies of scope
business profit versus
economic profit
independent versus
dependent variables
parameters & determinants
comparative static analysis
dynamic analysis
II.
ESSAY QUESTIONS. Answer all three questions. Answer all parts of each question,
1. 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 (create an example)
and graphical model the following short run costs considerations:
* Total Fixed costs
* Average Fixed costs
* Total Variable costs
* Average Variable costs
* Total costs
* Average total costs
* Marginal costs
For short run output determination, what are the essential cost considerations ?

2. a) Explain the term "market structure".

b) In economic theory, what is the short-run?
C) What is the long run? Explain and demonstrate.
d) What are Economies of Scale? Demonstrate and explain.
e) Contrast "diseconomies of scale" with diminishing
returns"

3. a) Develop an analysis/model of IMPERFECT competition.

(1) What are the conditions of this market structure ?
(2) Show and explain the short run demand for the industry.
b) Develop a model demonstrating the result for one
producer in the short run.
(1) What is the goal of the producer in the short run?
(2) 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) Can we predict the long run in Imperfect competition ? If so, show what
it might be