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GOALS: Five basic conditions of the economy that are generally desired by society. They are typically divided into macro goals (full employment, stability and growth) and micro goals (efficiency and equity).
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Lesson 18: Monopoly | Unit 5: Regulation
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Page: 27 of 30
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- Because a monopoly has market control, is a price maker, and faces a negatively-sloped demand curve:
- The price charged is too high.
- The quantity of output produced is too small.
- The result of this inefficiency is that too few resources are allocated to the production of the monopoly output.
- This inefficiency is a problem. In fact, it's generally considered one of four basic market failures.
- Market failure is a condition, including public good, market control, externality, and imperfect information, in which a market does not efficiently allocate resources.
- The general recommendation for any market failure is government intervention:
- Antitrust Laws
- Regulatory Pricing
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BANKING An industry containing depository institutions that provide financial intermediary services and safekeeping of checkable deposits that make up an important portion of the economy's money supply. These depository institutions--including traditional commercial banks, credit unions, savings and loan associations, and mutual savings banks--pursue financial intermediation and deposit safekeeping through fractional-reserve banking. Banking is regulated by the Federal Reserve System, Federal Deposit Insurance Corporation, and the Comptroller of the Currency, among a host of other federal and state regulators.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time at the confiscated property police auction hoping to buy either a computer that can play video games and burn DVDs or a black duffle bag with velcro closures. Be on the lookout for celebrities who speak directly to you through your television.
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The penny is the only coin minted by the U.S. government in which the "face" on the head looks to the right. All others face left.
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"The greatest things ever done on Earth have been done little by little. " -- William Jennings Bryan
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PVR
Profit Volume Ratio
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