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| Each _______ is an institution that hires factors of production and organizes those factors to produce and sell goods and services. |
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| ______________is equal to total revenue minus total cost, with total cost measured as the opportunity cost of production . |
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When a firm uses its own capital, it implicitly
rents it from itself. In this case, the firm’s opportunity cost of using the capital it owns is called the ___________ of capital. |
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| ________________ is the fall in the market value of a firm’s capital over a given period. |
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| The return to entrepreneurship is profit, and the profit that an entrepreneur earns on average is called ________________ . |
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| A _____________ is any method of producing a good or service. |
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Definition
| ____________occurs when the firm produces a given output by using the least amount of inputs. |
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| ____________occurs when the firm produces a given output at the least cost. |
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| A _______________- is a method of organizing production that uses a managerial hierarchy. Commands pass downward through the hierarchy, and information passes upward. |
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| An __________ is a method of organizing production that uses a market-like mechanism inside the firm. |
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| ___________ arises when there are many firms, each selling an identical product, many buyers, and no restrictions on the entry of new firms into the industry. |
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| ___________ is a market structure in which a large number of firms compete by making similar but slightly different products. |
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Definition
| Making a product slightly different from the product of a competing firm is called ______________. |
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Term
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Definition
| _________ is a market structure in which a small number of firms compete |
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Definition
| __________ arises when there is one firm, which produces a good or service that has no close substitutes and in which the firm is protected by a barrier preventing the entry of new firms. |
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Term
| four-firm concentration ratio |
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Definition
| The _________ is the percentage of the value of sales accounted for by the four largest firms in an industry. |
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Term
| Herfindahl-Hirschman Index (HHI) |
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Definition
| The ________ the square of the percentage market share of each firm summed over the largest 50 firms (or summed over all the firms if there are fewer than 50) in a market. |
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Definition
| __________ are the costs that arise from finding someone with whom to do business, of reaching an agreement about the price and other aspects of the exchange, and of ensuring that the terms of the agreement are fulfilled. |
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Definition
| When the cost of producing a unit of a good falls as its output rate increases, ___________ exist. |
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| A firm experiences ___________ when it uses specialized (and often expensive) resources to produce a range of goods and services. |
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