# on 12-Nov-2016 (Sat)

#### Annotation 150919596

 #2015 #book-2 #cfa #cfa-level-1 #economics #schweser Total product of labor (TPL) is the total output of a firm that uses a specific amount of capital (i.e., plant and equipment are fixed).

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#### Annotation 1406064790796

 #has-images #portfolio-management The CAPM Capital market theory builds on portfolio theory. CAPM refers to the capital asset pricing model. It is used to determine the required rate of return for any risky asset. In the discussion about the Markowitz efficient frontier, the assumptions are: Investors have examined the set of risky assets and identified the efficient frontier.Every investor will choose the optimal portfolio of risky assets on the efficient frontier. The optimal portfolio lies at the point where the highest indifference curve is tangent to the efficient frontier. The CAPM uses the SML or security market line to compare the relationship between risk and return. Unlike the CML, which uses standard deviation as a risk measure on the X axis, the SML uses the market beta, or the relationship between a security and the marketplace. The use of beta enables an investor to compare the relationship between a single security and the market return rather than a single security with each and every other security (as Markowitz did). Consequently, the risk added to a market portfolio (or a fully diversified set of securities) should be reflected in the security's beta. The expected return for a security in a fully diversified portfolio should be: E(RM) - Rf is the market risk premium, while the risk premium of the security is calculated by β[E(RM) - Rf]. Note that the "expected" and the "required" returns mean the same thing. The expected return based on the CAPM is exactly the return an investor requires on the security. To compute the required rate of return:.To compute the expected rate of return of an individual security, you need to use forecasted future security price and dividend: R = (Future price - current price + dividend) / Current price. The SML represents the required rate of return, given the systematic risk provided by the security. If the expected rate of return exceeds this amount, then the security provides an investment opportunity for the investor. The difference between the expected and required return is called the alpha (α) or excess rate of return. The alpha can be positive when a stock is undervalued (it lies above the SML) or negative when the stock is overvalued (it falls below the SML). The alpha becomes zero when the stock falls directly on the SML (properly valued). Security Market Line vs. Capital Market Line: The CML examines the expected returns on efficient portfolios and their total risk(measured by standard deviation). The SML examines the expected returns on individual assets and their systematic risk (measured by beta). If the relationship between expected return and beta is valid for any individual securities, it must also be valid for portfolios constructed with any of these securities. So, the SML is valid for both efficient portfoliosand individual assets.The CML is the graph of the efficient frontier and the SML is the graph of the CAPM.The slope of the CML is the market portfolio's Sharpe ratio and the slope of the SML is the market risk premium.All properly priced securities and efficient portfolios lie on the SML. However, only efficient portfolios lie on the CML....

#### Annotation 1406079733004

 #trivium In the exercise of the liberal arts, the action begins in the agent and ends in the agent, who is perfected by the action

#### Annotation 1406170172684

 #rhetoric -Blame = Past -Values = Present -Choice = Future Aristotle liked the future best of all. The rhetoric of the present handles praise and condemnation, separating the good from the bad, distinguishing groups from other groups and individuals from each other.

#### Annotation 1409848839436

 #rhetoric productive arguments use [...] tense, the language of choices and decisions.

#### Annotation 1409851723020

 #rhetoric Answer someone who expresses doubt about your idea with “Okay, let’s tweak it.” Now focus the argument on revising your idea as if the group had already accepted it. This is a form of concession

#### Annotation 1409870597388

 Accismus #rhetoric ​Rhetorical device of pretending to refuse. The oh-you-shouldnt-have figure. Pretend disinterest, while actually desiring it. (akkismos affectation). Accismus is showing disinterest in something while secretly wanting it. It's a form of irony where one pretends indifference and refuses something while actually wanting it. In Aesop's fable, the fox pretends he doesn't care for the grapes. Caesar, in Shakespeare's Julius Caesar, is reported as not accepting the crown. the accismus -- a fake refusal -- makes you look like less of a jerk than you really are.

#### Annotation 1410420051212

 THE GOAL OF AN ARGUMENT #rhetoric Ask yourself what you want at the end of an argument: Change your audience’s mind? Get it to do something or stop doing it?

#### Annotation 1410421886220

 STEPS TO CONVINCE #rhetoric Start by changing the mood, turn it into a receptive audience, eager to hear your solution. Then change its mind. Convince that something is the best way to achieve something. Finally, fill it with the desire to act. Show them that the action you want to take is the best one, and inspire it. This requires stronger emotions that turn a decision into a commitment.

#### Annotation 1410466712844

 Control the issue. #rhetoric Do you want to fix blame? Define who meets or abuses your common values? Or get your audience to make a choice? The most productive arguments use choice as their central issue. Don’t let a debate swerve heedlessly into values or guilt. Keep it focused on choices that solve a problem to your audience’s (and your) advantage.

#### Annotation 1410847345932

 Often we cannot see why a particular noun is a particular gender. #latin It is, generally possible to tell the gender of a noun by its ending in the nominative and genitive singular, and it is also according to these endings that Latin nouns are grouped into five classes, which are called declensions. Each declension has a distinctive set of endings which indicate both case and number, just as in English we have child, child’s, children, children’s, though Latin distinguishes more cases.

#### Annotation 1417701362956

 Subject 1. Types of Markets #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction A market is any arrangement that enables buyers and sellers to get information and do business with each other. A competitive market is a market that has many buyers and many sellers so that no single buyer or seller can influence prices. Broadly speaking there are two types of markets: Goods markets are markets where final products from businesses or firms are exchanged. Households and firms are usually buyers and firms are sellers. Factor markets are markets for the factors of production. Factors include labor, capital, raw materials, entrepreneurship, etc. For example, in labor markets, households are sellers and firms are buyers. The demand for a factor exists because there is a demand for goods that the resource helps to produce. The demand for each factor is thus a derived demand; it is derived from the demand of consumers for products. For example, engineers are needed to design cars. A car manufacturer's demand for engineers thus depends entirely upon the demand for cars. The demand for engineers is a derived demand.

#### Annotation 1417711324428

 Subject 3. Market Equilibrium #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-13-demand-and-supply-analysis-introduction #subject-3-market-equilibrium Aggregate Demand and Aggregate Supply An aggregate demand curve is simply a schedule that shows amounts of a product that buyers collectively desire to purchase at each possible price level. An aggregate supply curve is simply a curve showing the amounts of a product that all firms will produce at each price level. Example 1 Refer to the graph below. What is the market quantity that would be supplied at a price of $2.00? Market quantity is the sum of individual quantities supplied at each price. At a price of$2.00, Ann supplies 4, Barry supplies 3, and Charlie supplies 0. The market supply is 7. Market Equilibrium Equilibrium is a state in which conflicting forces are in balance. In equilibrium, it will be possible for both buyers and sellers to realize their goals simultaneously. The following graph depicts the market supply and demand for concert tickets at Madison Square Garden in New York City. Equilibrium price and quantity are where the supply and demand curves intersect. Draw a horizontal line from the intersection to the price axis. This is equilibrium price: $60. Draw a vertical line from the intersection to the quantity axis. This is equilibrium quantity: 300. It is equilibrium because quantity demanded equals quantity supplied at$60 per ticket. At this price, there is neither surplus (excess supply) nor shortage (excess demand), so there is no downward or upward pressure for the price to change. Surplus will push prices downward towards equilibrium. Suppose the price is initially above the equilibrium price (P2) and sits at P1.Quantity supplied (Q1s) will exceed quantity demanded (Q1D), creating a surplus.The surplus will put downward pressure on prices since producers will begin to lower their prices to sell the surplus.As a result, the price will fall, the quantity supplied will decrease, and the quantity demanded will increase until the equilibrium price (P2) is restored.This process involves movements along supply-and-demand curves since the changes are caused by price fluctuations. Similarly, shortages push prices upward towards equilibrium. Because the price rises if it is below equilibrium, falls if it is above equilibrium, and remains constant if it is at equilibrium, the price is pulled toward equilibrium and remains there until some event changes the equilibrium. We refer to such an equilibrium as being stable because whenever price is disturbed away from the equilibrium, it tends to converge back to that equilibrium. An unstable equilibrium is an equilibrium that is not restored if disrupted by an external force. While most equilibria studied in economics are of the stable variety, a few cases of unstable equilibria do emerge from time to time, in limited circumstances.

#### Annotation 1417722596620

 Subject 4. Auctions #cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #subject-4-auctions Auctions can be used to arrive at equilibrium price. Auctions can have bidders trying to buy an item (e.g., Christie's, eBay).Auctions can have bidders trying to sell an item (e.g., Procurement, priceline.com). Auctions can be classified as one of two types: Common value auction: the value of the item is the same to everyone but different bidders have different estimates about the underlying value. Examples: oil, timber, items with resale value.Private value auction: bidders know the value of the item to themselves with certainty but there is uncertainty regarding other bidders' values. Examples: collectibles, art items. There are also many different methods for auctioning items: Open outcry English (ascending price) auction: The auctioneer starts at a reserve price and increases the price until only one bidder is left. That bidder wins the auction at the current price.First-price sealed-bid auction: Everyone writes down a bid in secret. The person with the highest bid wins the object and pays what he bids.Second-price sealed-bid (Vickery) auction: Everyone writes down a bid in secret. The person with the highest bid wins the object and pays the second highest bid (used for stamps and by Goethe).Dutch (descending price) auction: The auctioneer starts at a high price and decreases the price until a bidder accepts the price. The winner's curse means that the winner of an auction will frequently have bid too much for the auctioned item: you win, you lose money, and you curse. A Dutch auction share repurchase is when a company agrees to buy back a fixed amount of its outstanding shares within a certain price range. Offers come in from investors who specify the price within the given range at which they'll sell their shares. The company then buys back the shares of those who bid the lowest first and continues on up the line until they have bought back the amount that they said they would. The U. S. Treasury security auctions are conducted using the single-price auction method. All successful competitive bidders and all noncompetitive bidders are awarded securities at the price equivalent to the highest rate or yield of accepted competitive tenders.

#### Annotation 1417756675340

 Subject 1. Utility Theory #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand Utility refers to the total satisfaction received by a person from consuming a good or service. Completeness. A person can compare any two bundles, A and B, in such a way that it leads to one of the three following results: (i) A is preferred to B, (ii) B is preferred to A, or (iii) A and B are the same (they are indifferent).Transitivity. Consider any three bundles A, B, and C. If a person prefers A to B and also prefers B to C, she or he must prefer A to C.Nonsatiation. Consider two bundles, A and B. A has more than B in every commodity and yet all these commodities are not economic "bads"; then a person will rank A higher than B. Utility theory is a quantitative model of consumer preferences and is based on the above axioms. Consumer preferences can be represented by an ordinal utility function: This is a mathematical expression that shows the relationship between utility values and every possible bundle of goods. This ordinal - not cardinal - utility captures only ranking and not strength of preferences.

#### Annotation 1417760083212

 Subject 2. Indifference Curves #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand An indifference curve shows the combination of two products that provide an individual with a given level of utility (satisfaction). It is a curve, convex from below, that separates the consumption bundles that are more preferred by an individual from those that are less preferred. The points on the curve represent combinations of goods that are equally preferred by the individual. For example, the bundle at point A of 10 apples and 3 fish provides the same satisfaction as the bundle at point B of 6 apples and 5 fish. Indifference curves provide a diagrammatic picture of how an individual ranks alternative consumption bundles. More goods are preferable to fewer goods. Thus, bundles on indifference curves lying farthest to the northeast of a diagram are always preferred. For example, the bundle at C is clearly preferred to those points along the indifference curve and the bundle at point D is clearly inferior to those points along the curve. Goods are substitutable. Therefore, indifference curves slope downward to the right. The value of a good declines as it is consumed more intensively. Therefore, indifference curves are always convex when viewed from below. The slope of the indifference curve is equal to the marginal rate of substitution: the amount of one good that is just sufficient to compensate the consumer for the loss of a unit of the other good. Indifference curves are everywhere dense. That is, an indifference curve can be drawn through any point on the diagram; any two bundles of goods can be compared by the individual. Indifference curves for one consumer cannot cross. If they did, rational ordering would be violated and the postulate that more goods are better than fewer goods would be violated. If two consumers have different marginal rates of substitution, they can both benefit from the voluntary exchange of one good for the other.

#### Annotation 1417797569804

 Subject 2. Total, Average, and Marginal Revenue #cfa #cfa-level #economics #has-images #microeconomics #reading-15-demand-and-supply-analysis-the-firm Revenue is the income generated from the sale of output in product markets. Total revenue (TR) is the sum of individual units sold multiplied by their respective prices:Average revenue (AR) =Marginal revenue (MR) is the change in revenue from selling one extra unit of output: In a perfectly competitive market, each firm is a price taker. Since each unit of output sold by a price taker is sold at the market price, the MR for each unit is also equal to the market price, i.e., P = MR. Under imperfect competition, a firm's marginal revenue is always less than the price of its good. Why? As the firm reduces price in order to expand output and sales, there will be two conflicting influences on total revenue. The increase in sales due to the lower price will, by itself, add to the revenue of the monopoly.The price reduction, however, also applies to units that would otherwise have been sold at a higher price. This factor itself will cause a reduction in total revenue. These two conflicting forces will result in marginal revenue - the change in total revenue - that is less than the sales price of the additional units. Thus, the marginal revenue curve of the firm will always lie below the firm's demand curve, which is also the market's demand curve. TR is maximized when MR = 0.

#### Annotation 1417815657740

 Subject 4. Shutdown Analysis #cfa #cfa-level #economics #has-images #microeconomics #reading-15-demand-and-supply-analysis-the-firm For a price taker (a firm in a perfectly competitive market): Profit = Total Revenue - Total Cost = (Price - Average Total Cost) x Quantity However, maximum profit is not always a positive economic profit. In the short run, the firm might break even (making a zero economic profit), make an economic profit, or incur an economic loss. 1. If the price equals minimum average total cost, the firm breaks even and makes a normal profit. 2. The ATC of producing each of q2 units is labeled as c1. c1BAP indicates the economic profit being made by this firm. The firm is making a profit since the price per unit exceeds the ATC per unit and the total revenue exceeds the total costs. 3. What would happen to profits if the price fell to below the ATC curve? The firm therefore will produce q1 units of output, as shown where MC = MR. At q1, the firm can only charge P per unit, and yet the ATC per unit is higher, at c2. This means that the firm is making a total economic loss equal to the shaded area, PBAc2, or the distance of c2 to P per unit. If the firm's current sales revenues can cover its variable cost, and the firm anticipates that the lower market price is temporary, it will continue to operate and will face short-run economic losses. It will produce the quantity at which MC = P. This option is better than "shut down" since the firm is able to cover its variable costs and pay some of its fixed costs. If it were to shut down, the firm would lose the entire amount of its fixed costs. The shutdown point is the output and price at which the firm just covers its total variable cost. This point is where average variable cost is at its minimum.It is also the point at which the marginal cost curve crosses the average variable cost curve.At the shutdown point, the firm is indifferent between producing and shutting down temporarily. It incurs a loss equal to total fixed cost from either action. If the market price is below the firm's average variable cost, a temporary shutdown is preferable to short-run operation. If the firm continues to operate, operating losses merely add to losses resulting from the firm's fixed costs. Shutdown will reduce losses. The Firm's Short-Run Supply Curve The price taker that intends to stay in business will maximize profits (or minimize losses) when it produces the output level at which P = MC AND variable costs are covered. At this output level, the price taker can maximize its profits or minimizes its losses. Therefore, the portion of the firm's short-run marginal cost curve that lies above its average variable cost is the short-run curve of the firm. In the above graph, if price is below P1, the firm should be shut down.

#### Annotation 1417825357068

 Subject 5. Economies of Scale and Diseconomies of Scale #cfa #cfa-level #economics #has-images #microeconomics #reading-15-demand-and-supply-analysis-the-firm Short-Run Cost and Long-Run Cost The short-run analysis relates costs to output for a specific size of plant. In the long-run, all resources used by the firm are variable. For each plant size, there is a set of short-run, U-shaped costs curves for MC, AVC, and ATC. This diagram shows the ATC curves of three (of many) possible plant sizes: small, medium, and large. Using this information, firms can plan, when in their blueprint stages, the optimal plant size they should be relative to the output they want to produce. For example, if a firm wanted to produce more than Q1 units of output, it would make sense to build a large firm, since costs per unit would be less than they would be with a small or medium firm. Long-Run Average Cost Curve To explain this process, imagine the output level Q2. Looking at the relevant costs on the vertical axis, the large firm is far cheaper per unit than both the small and medium-sized firms. Thus, should a firm be planning for output in excess of Q1, a large firm should be built. For levels of output between Q0 and Q1, it would be cheaper per unit if the firm was of a medium size. If a firm is planning to produce less than Q0 units, a small firm would be best.For output between Q0 - Q1 units, a medium firm is preferable.For output in excess of Q1 units, a large firm is preferable The long-run average total cost curve is indicated in black. It shows the minimum average cost of producing each output level when the firm is free to choose among all possible plant sizes. It can best be thought of as a planning curve, because it reflects the expected per-unit cost of producing alternative rates of output while plants are still in the blueprint stage. No single plant size could produce the alternative output rates at the costs indicated by the planning curve. In reality, there are an infinite number of firm sizes: Economies and Diseconomies of Scale Economies of scale are reductions in the firm's per-unit costs that are associated with the use of large plants to produce a large volume of output. They are present over the initial range of outputs when the long-run ATC curve is falling. There are three reasons why economies of scale exist: Mass production is more economical.Specialization of labor and equipment improves productivity.Workers at a larger firm tend to learn more from their experience. Diseconomies of scale are situations in which the long-run average total costs are greater in larger firms than they are for smaller firms. They are possible: as a firm gets bigger and bigger, bureaucratic inefficiencies may result. Principal-agent problems grow; they are prese...

#### Annotation 1417838202124

 Subject 6. Profit Maximization #cfa #cfa-level #economics #has-images #microeconomics #reading-15-demand-and-supply-analysis-the-firm The goal of each firm is to maximize economic profit, which equals total revenue minus total cost. Total cost is the opportunity cost of production, which includes normal profit.Under perfect competition, a firm's total revenue equals price, P, multiplied by quantity sold, Q, or P x Q. Marginal revenue is the addition to total revenue earned by a firm when one more unit of output is sold: MR = ΔTR/ΔQ. Since each unit of output sold by a price taker is sold at the market price, the MR for each unit is also equal to the market price, i.e., P = MR. MR plotted against quantity sold would thus yield the same curve as P plotted against quantity sold (i.e., the demand curve) for the price taker. We say that the MR curve of a price taker lies on the demand curve of a price taker. There are three approaches to calculating the point of profit maximization in the short run. All three approaches yield the same profit-maximizing quantity of output. MC = MR Approach Produce that quantity of output where: MC = P = MR Each unit of output produced and sold by a price taker will generate revenue that equals the market price of the product (MR).However, due to the law of diminishing returns, as output increases, costs per unit will eventually also begin to increase (MC).The profit-maximizing quantity of output occurs where MC = MR = P. Here are two familiar curves: the MC curve and the MR curve of a certain firm. Note that the MC curve clearly illustrates the Law of Diminishing Returns. Given this information, what quantity of output should this profit-maximizing price taker produce? What about producing q1 units? Can you see that at q1, MR exceeds MC by the distance shown by the arrow? This means that the revenue received from the sale of that unit would exceed the cost of its production, so it would be profitable for the firm to produce that unit. But would the firm be maximizing its profits, or should the firm produce more? What about producing q2 units? MR still exceeds MC, shown by the distance of the arrow. This means that the revenue received from the sale of unit q2 also exceeds its cost of production, so the firm would make even more profit if it produced that unit too. But would the firm be maximizing its profits? Could the firm produce still more units? At q3, the MR earned from the sale of the unit is equal to the MC involved in producing the unit, so unit q3 generates neither a profit nor a loss for the firm. If the firm produced more than q...

#### Annotation 1417860484364

 Subject 7. Productivity #cfa #cfa-level #economics #has-images #microeconomics #reading-15-demand-and-supply-analysis-the-firm Average product and marginal product, which are derived from total product, are key measures of a firm's productivity. Total Product. The total output of a good associated with alternative utilization rates of a variable input. It increases as more and more units of the variable input are used.Marginal Product. The increase in the total product as a variable input increases by one extra unit.Average Product. The total product divided by the number of units of the variable input used in production. Law of Diminishing Returns The total product curve shows how total product changes with the quantity of variable input employed. As more and more units of a variable resource are combined with a fixed amount of other resources, employment of additional units of the variable resource will eventually increase output only at a decreasing rate. Once diminishing returns are reached, it will take successively larger amounts of the variable factor to expand output by one unit. The law basically explains the old adage: "too many cooks spoil the broth," or too much of a good thing is bad. As a single resource is applied more intensively, the resource eventually tends to accomplish less and less. Essentially, this is a constraint imposed by nature. Let's use labor as the input. Initially, hiring more laborers may mean more productive use of machines, which were underutilized. Output may thus initially increase. After a while, the firm may have hired too many laborers, given the number of machines. There may be overcrowding on the work floor and mistakes may result, causing productivity to fall whilst costs will increase. As units of variable input are added to a fixed input, total product will increase, first at an increasing rate and then at a declining rate. This will cause both marginal and average product curves to rise at first and then decline. Note that the marginal product curve intersects the average product curve at its maximum. The smooth curves indicate that the input can be increased by amounts of less than a single unit. Profit Maximization Firms demand labor, amongst other factors, to produce goods and services. The Marginal Revenue Product (MRP) of labor is the change in the total revenue of a firm that results from the employment of one additional unit of labor. The marginal revenue product of an input is equal to its marginal product multiplied by the marginal revenue of the good or service produced: MRP = MP x MR, where Marginal Product (MP) is the change in total output that results from the employment of one additional unit of labor.Marginal Revenue (MR) is the change in a firm's total revenue that results from the production and sale of one additional unit of output. Because of the law of diminishing returns, the marginal product of labor will fall as employment of the labor expands, and thus the marginal revenue product of labor will also fall as employment expands. The firm has two equivalent conditions for maximizing profit. They are: Hire the quantity of labor at which the marginal revenue product of labor (MRP) equals the wage rate (W).Produce the quantity of output at which marginal revenue (MR) equals marginal cost (MC). Why? MRP = W => MP x MR = W => MR = W/MP, since W/MP = MC => MR = MC. This relationship indicates why wage differences across skill categories will tend to reflect product...

#### Annotation 1417865727244

 Subject 1. Characteristics of Different Market Structures #cfa #cfa-level #economics #microeconomics #reading-16-the-firm-and-market-structures A financial analyst must understand the characteristics of market structures to better forecast a firm's future profit stream. We focus on those characteristics that affect the nature of competition and pricing. They are: The number of firms (including the scale and extent of foreign competition).The extent of product differentiation (which affects cross-price elasticity of demand).The pricing power of seller(s). Can a firm influence the market price?Barriers to entry. Exit costs should also be considered.Non-price competition such as product differentiation. The characteristics of each market structure will be discussed in subsequent subjects of this reading.

#### Annotation 1417868348684

 Subject 2. Perfect Competition #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-16-the-firm-and-market-structures An industry with perfect competition displays the following characteristics: All the firms in the market are producing an identical product (e.g., wheat of the same grade).No barriers limit the entry or exit of firms in the market.A large number of firms exist in the market. Established firms have no advantages over new ones.Sellers don't have market-pricing power.There is no non-price competition. Perfect competition arises: When a firm's minimum efficient scale is small relative to market demand so there is room for many firms in the industry, andWhen each firm is perceived to produce a good or service that has no unique characteristics, so consumers don't care which firm they buy from. The demand analysis in perfectly competitive markets is covered in Reading 13. The supply analysis, optimal price and output, and long-run equilibrium in perfectly competitive markets are covered in Reading 15. In perfect competition, each firm is a price taker. Price takers are sellers who must take the market price in order to sell their products. There is no price decision to make: they will merely attempt to choose the output level that will maximize profit.Each price taker's output is small relative to the total market: the output of a firm exerts little or no effect on the market price. This diagram represents the market demand and supply curve for a certain product - for example, eggs. As usual, the intersection of the demand and supply curve creates the market price (P) per egg. Now remember that a firm that is a price taker can sell all it wants to at that price, but can sell nothing at a higher price. Price takers can sell all their output at the market price, but they are unable to sell any of their output at a price higher than the market price. That is, a price taker faces a horizontal demand curve. Each firm's output is a perfect substitute for the output of the other firms, so the demand for each firm's output is perfectly elastic. They can sell as much as they would like at the going market price.There is no need for them to reduce their price in order to sell more.Moreover, at any price above the market price there is no demand; their sales would be zero (nobody would buy from that firm because there are so many other firms from which to obtain the product at the market price).This reflects the fact that perfectly competitive firms have no control over their price. When a perfectly competitive market is in long-run equilibrium: Quantity supplied and quantity demanded must be equal in the market.Firms in the market must earn zero economic profit at the prevailing market price (that is, firms are earning the "normal rate of return"). This occurs when market price = marginal revenue = marginal cost = minimum ATC. Note that accounting profits may still be positive. Why do firms earn zero economic profit in the long-run equilibrium? If firms earn positive economic profit in the long-run equilibrium, these firms will have an incentive to expand their capacity, and new firms will enter the market. This will lead to an increase in supply, forcing the market price down...

#### Annotation 1417874902284

 Subject 3. Monopolistic Competition #cfa #cfa-level #economics #has-images #microeconomics #reading-16-the-firm-and-market-structures A monopolistic market is also called a competitive price searcher market. Characteristics are: A large number of firms. This is due to low entry barriers and causes intense competition in these markets. Firms face competition from existing firms and potential entrants to the market. Firms produce differentiated products. This means that each firm makes a product that is slightly different from the products of competing firms. This is the most distinctive characteristic of such a market. Low entry barriers. Entry into and exit from the market are relatively easy. Sellers in competitive price searcher markets face competition both from firms already producing in the market and from potential new entrants into the market. If profits are present, firms can expect that new rivals will be attracted. Because of the low entry barriers, competitive forces will be strong in monopolistic markets, and firms cannot earn an economic profit in the long run. Competition on quality, price, and marketing. Demand is not simply given for a monopolistic competitor. The firm has some pricing power and can alter the demand for its products by changing product quality (design, reliability and service), location and by advertising. The firm faces a downward-sloping demand curve. This demand curve is highly elastic because good substitutes for a firm's output are readily available from other suppliers. Consider two hamburger companies: McDonald's and Burger King. Both firms are producing burgers but customers view them as differentiated.If McDonald's increases the price of its burger, it will not lose all its customers, as some will continue to pay the higher price, preferring McDonald's.Thus, differentiation explains the downward-sloping demand curve. The more firms producing burgers (substitutes), the more elastic McDonald's demand curve will be, since the greater the decrease in quantity demanded as price increases. The Firm's Short-Run Output and Price Decision As with price takers, monopolistic competitors maximize profits by expanding output to where MR = MC. A firm in monopolistic competition operates much like a single-price monopolist. According to the demand curve, the firm can charge P1 per unit. The total revenue earned is the shaded area 0P1AQ1.The total cost is the shaded area 0CBQ1.It earns an economic profit (as in this example) when P > ATC. The total profit is thus the difference between total revenue and total costs, and is given by the shaded area CP1AB. A firm might incur an economic loss in the short run when P < ATC. Long Run: Zero Economic Profit Whenever firms can freely enter and exit a market, profits and losses play an important role in determining the size of the industry. Economic profits will attract new competitors to the market and economic losses will cause competitors to exit from the market. In the short run, a price searcher may make either economic profits or losses, depending on market conditions. As firms enter the industry, each existing firm loses some of its market share. The demand for its product decreases and the demand curve for its product shifts leftward. The decrease in demand decreases the quantity at which MR = MC and lowers the maximum price that the firm can charge to sell...

#### Annotation 1417879883020

 Subject 4. Oligopoly #cfa #cfa-level #economics #has-images #microeconomics #reading-16-the-firm-and-market-structures Literally, oligopoly means "few sellers." This market structure is characterized by: A small number of rival firms. The firms are interdependent because each is large relative to the size of the market. The decisions of a firm often influence the demand, price, and profit of rivals, and an oligopolist must consider the potential reaction of rivals. High entry barriers into the market. Either natural or legal barriers to entry can create oligopoly. Economies of scale are probably the most significant entry barrier here. Achieving minimum per-unit cost is required, and thus a small number of large-scale firms will be able to produce the entire market demand for the product. This is what distinguishes an oligopoly from a monopolistic competitive market.A legal oligopoly might arise even where demand and costs leave room for a larger number of firms. In short, an oligopoly is competition among the few. Pricing Strategies Like a monopolist, an oligopolist faces a downward-sloping demand curve and seeks to maximize profit, not price.Unlike a monopolist, an oligopolist cannot determine the product price that will deliver maximum profit simply by estimating market demand and cost conditions. A key factor here is the pricing behavior of close rivals, or interdependence between firms. This means that each firm must take into account the likely reactions of other firms in the market when making pricing decisions. Because the reactions of those rivals cannot be determined, the precise price and output that will emerge under an oligopoly cannot be determined. Only a potential range of prices can be indicated. There are three basic pricing strategies. 1. The assumption of pricing interdependence is that firms will match a price reduction and ignore a price increase. The idea is that if a firm raises prices, other firms won't follow, because they won't worry about losing market share to a firm that is raising its prices. However, if the firm lowers its prices, other firms will respond by lowering their prices also, since they don't want to lose market share. The demand curve that a firm believes it faces has a kink at the current price P and quantity Q. The kinked demand curve can be thought of as two demand curves. Above the price P, an individual firm is afraid of putting up prices. A price increase would, it assumes, not be matched by competitors, hence the demand curve above P is elastic. It will be remembered that if demand is elastic and price rises, revenue falls.Similarly, a price fall has the same effect on revenue. This time the firm imagines that dropping its own price leads to others dropping theirs. Overall, quantity demand increases as the demand curve slopes down, but the increase is less than proportionate. That is the demand curve below price P is inelastic. The kink in the demand curve means that the MR curve is discontinuous at the current quantity - shown by the gap AB in the figure. Fluctuations in MC that remain within the discontinuous portion of the MR curve leave the profit-maximizing quantity and price unchanged. For example, if costs increased so that the MC curve shifted upward from MC0 to MC1, the profit-maximizing price and quantity would not change. The beliefs that generate the kinked demand curve are not always correct and firms can figure out this fact. If MC increases enough, all firms raise their prices and the kink vanishes. 2. The assumption of the Cournot...

#### Annotation 1418026945804

 Subject 1. The Foreign Exchange Market #cfa #cfa-level-1 #economics #economics-in-a-global-context #has-images #reading-21-currency-exchange-rates An exchange rate is the current market price at which one currency can be exchanged for another. The convention used in the reading is the number of units of one currency (price currency) that one unit of another currency (base currency) will buy. Let's say a:b = S. a is the price currency.b is the base currency.S is the cost of one unit of currency b in terms of currency a. For example, US$: £ = 1.5 indicates that £1 is priced at US$1.5. The exchange rate above is referred to as the nominal exchange rate. The real exchange rate is the nominal rate adjusted somehow by inflation measures. For example, if country A has an inflation rate of 10%, country B an inflation rate of 5%, and no changes in the nominal exchange rate took place, then country A now has a currency whose real value is higher than before. Market Functions and Participants A foreign exchange market is a place where foreign exchange transactions take place. Measured by average daily turnover, the foreign exchange market is by far the largest financial market in the world. It has important effects, either directly or indirectly, on the pricing and flows in all other financial markets. There is a wide diversity of global FX market participants that have a wide variety of motives for entering into foreign exchange transactions. Commercial companies undertake FX transactions during cross-border purchases and sales of goods and services. Hedge funds trade FX currencies for hedging or even speculative purposes. Central banks use their FX reserves to stabilize the market and control the money supply. Large dealing banks provide FX price quotes to their clients. With so many different market participants, motives, and strategies, it is very difficult to describe the FX market adequately with simple characterizations.

#### Flashcard 1419527195916

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#obgyn
Question
What are indirect measures of fetal health?
- presence of mec/blood in amniotic fluid
- mat temp

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419529817356

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#obgyn
Question
What are the methods of FHR monitoring?
1. intermittent ausc w/ doppler (q15-30min for 1 min following a contraction in active phase of 1st stage; q5min during 2nd stage when pushing)

If non-reassuring IA,
2. EFM (continuous)

status measured difficulty not learned 37% [default] 0

#### Annotation 1419530341644

 A Change in the Quantity Demanded Versus a Change in Demand #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-13-demand-and-supply-analysis-introduction The demand curve isolates the impact of price on the amount of a product purchased. A change in quantity demanded (caused by price change ONLY) is a movement along a demand curve from one point to another.Changes in other factors (anything other than price), such as income, tastes, expectations, and the prices of closely related goods, will shift the entire demand curve inwards or outwards. This is referred to as change in demand. Example 3 Refer to the graph below. Consumers began purchasing more of a product due to a decrease in price. Which arrow best represents this statement? Answer: C. A change in price causes a movement along the demand curve. When price falls, the movement is downward and to the right.

Subject 2. Basic Principles and Concepts
ople plan to buy increases at each and every price, so the demand curve shifts rightward. When demand decreases, the quantity that people plan to buy decreases at each and every price, so the demand curve shifts leftward. <span>A Change in the Quantity Demanded Versus a Change in Demand The demand curve isolates the impact of price on the amount of a product purchased. A change in quantity demanded (caused by price change ONLY) is a movement along a demand curve from one point to another. Changes in other factors (anything other than price), such as income, tastes, expectations, and the prices of closely related goods, will shift the entire demand curve inwards or outwards. This is referred to as change in demand. Example 3 Refer to the graph below. Consumers began purchasing more of a product due to a decrease in price. Which arrow best represents this statement? Answer: C. A change in price causes a movement along the demand curve. When price falls, the movement is downward and to the right. The Supply Function and the Supply Curve Resources and technology determine what it is possible to produce. Supply reflects a decision about whic

#### Flashcard 1419534798092

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#obgyn
Question
Contractions in active labour should be:
mod-strong, last ~45 sec, q2-3min

status measured difficulty not learned 37% [default] 0

#### Annotation 1419535322380

 #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-13-demand-and-supply-analysis-introduction The Supply Function and the Supply Curve Resources and technology determine what it is possible to produce. Supply reflects a decision about which technologically feasible items are best to produce. The supply function represents sellers' behavior. Prices influence producers' supply decisions. The supply function can be depicted as a positively sloped supply curve. If all other factors are equal, a higher price will increase the producer's incentive to supply the good. Higher prices increase the producer's profit, which is the excess of sales revenue over the cost of production.As the price of a good falls, its supply falls as well. Therefore, there is a direct relationship between the price of a good and the amount of that good that will be supplied. The supply curve slopes upward. It tells the analyst the quantity that producers are willing to supply for each price when all other influences on producers' planned sales remain the same. Example 4 The graph below displays the quantity associated with price in a supply table. To find the quantity supplied at a price of $1, extend a horizontal line from$1 to the supply curve and drop a vertical line down to the quantity axis. These lines will intersect at 0. This is the quantity that will be associated with a price of $1 on a supply table. The law of supply results from the general tendency for the marginal cost of producing a good or service to increase as the quantity produced increases. A supply curve is also a minimum-supply-price curve. The greater the quantity produced, the higher the price a firm must be offered to be willing to produce that quantity. status not read Subject 2. Basic Principles and Concepts Which arrow best represents this statement? Answer: C. A change in price causes a movement along the demand curve. When price falls, the movement is downward and to the right. <span>The Supply Function and the Supply Curve Resources and technology determine what it is possible to produce. Supply reflects a decision about which technologically feasible items are best to produce. The supply function represents sellers' behavior. Prices influence producers' supply decisions. The supply function can be depicted as a positively sloped supply curve. If all other factors are equal, a higher price will increase the producer's incentive to supply the good. Higher prices increase the producer's profit, which is the excess of sales revenue over the cost of production. As the price of a good falls, its supply falls as well. Therefore, there is a direct relationship between the price of a good and the amount of that good that will be supplied. The supply curve slopes upward. It tells the analyst the quantity that producers are willing to supply for each price when all other influences on producers' planned sales remain the same. Example 4 The graph below displays the quantity associated with price in a supply table. To find the quantity supplied at a price of$1, extend a horizontal line from $1 to the supply curve and drop a vertical line down to the quantity axis. These lines will intersect at 0. This is the quantity that will be associated with a price of$1 on a supply table. The law of supply results from the general tendency for the marginal cost of producing a good or service to increase as the quantity produced increases. A supply curve is also a minimum-supply-price curve. The greater the quantity produced, the higher the price a firm must be offered to be willing to produce that quantity. A Change in Supply Changes in other factors will influence the amount of products that producers are willing to supply. These factors include the

#### Flashcard 1419537681676

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#obgyn
Question
What can you consider for ineffective contractions?
AROM, prostaglandins, oxy

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419539516684

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#obgyn
Question
What are the 4 basic shapes of the human pelvis which can impact labour & position of baby?
- gynecoid
- android
- anthropoid
- platypelloid

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419541875980

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#obgyn
Question
What are factors to consider for OB analgesia/anesthesia?
- effectiveness
- t 1/2
- s/e
- allergies
- contraindications

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419543710988

Tags
#obgyn
Question
What are the methods of OB anesthesia?
general anesthesia:
- comfort measures
- narcotic analgesics
- inhalation analg
- general anesthetic

local anesthesia:
- local
- pudendal block
- paracervical block

regional anesthesia:
- epidural
- spinal

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419545545996

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#obgyn
Question
What are examples of comfort measures in labour?
change in mat position, counter-pressure on lower back, aqua therapy, massage, breathing techniques, supportive care

status measured difficulty not learned 37% [default] 0

#### Annotation 1419546070284

 A Change in the Quantity Supplied Versus a Change in Supply #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-13-demand-and-supply-analysis-introduction #subject-2-basic-principles-and-concepts The quantity supplied of a good or service is the amount that producers plan to sell during a given time period at a particular price. Price is just one of the factors that affect producers' supply decisions. The supply curve isolates the impact of price on the quantity of a product supplied and assumes that all other factors stay the same. A change in quantity supplied is caused by a price change ONLY. It is a movement along the same supply curve.When one of the other factors that influence selling plans changes, there is a change in supply and a shift of the supply curve. Example 6 A tax will shift the supply curve up by the amount of the tax. At every price level, less is supplied. For example, at price P0, originally Q0 is supplied. After the tax, Q1 is supplied at price P0.

Subject 2. Basic Principles and Concepts
in the cost of producing the good causes supply to shift leftward. An increase in the number of firms and a decrease in taxes cause supply to shift rightward. A change in price causes a movement along supply, not a shift. <span>A Change in the Quantity Supplied Versus a Change in Supply The quantity supplied of a good or service is the amount that producers plan to sell during a given time period at a particular price. Price is just one of the factors that affect producers' supply decisions. The supply curve isolates the impact of price on the quantity of a product supplied and assumes that all other factors stay the same. A change in quantity supplied is caused by a price change ONLY. It is a movement along the same supply curve. When one of the other factors that influence selling plans changes, there is a change in supply and a shift of the supply curve. Example 6 A tax will shift the supply curve up by the amount of the tax. At every price level, less is supplied. For example, at price P 0 , originally Q 0 is supplied. After the tax, Q 1 is supplied at price P 0 .<span><body><html>

#### Flashcard 1419548953868

Tags
#obgyn
Question
When can you use narcotic analgesia for labour?
- early in 1st stage alone, or as adjunct
- avoid using <4h to delivery b/c mat sedation + newborn resp depression

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419550788876

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#obgyn
Question
What is the inhalation analgesia used in labour, and when can you use it?
- usually mix of NO & O2
- typically used in late 1st or 2nd stage
- doesn't diminish uterine activity/motor control/ability to push
- can be adjunct to local/pudendal

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419553410316

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#obgyn
Question
What are risks of general anesthesia in labour? What are complications of pregnancy that can impact a general anesthesia?
- risk of aspiration, delayed gastric emptying, difficult intubation, high intra-abdo pressure, most crosses placenta
- complications of preg = gestational HTN, placental abruption, coagulopathy, etc

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419555245324

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#obgyn
Question
What's the local used in labour?
1% lidocaine (xylocaine) +/- epinephrine

status measured difficulty not learned 37% [default] 0

#### Annotation 1419556556044

 Aggregate Demand and Aggregate Supply #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-13-demand-and-supply-analysis-introduction #subject-3-market-equilibrium An aggregate demand curve is simply a schedule that shows amounts of a product that buyers collectively desire to purchase at each possible price level. An aggregate supply curve is simply a curve showing the amounts of a product that all firms will produce at each price level. Example 1 Refer to the graph below. What is the market quantity that would be supplied at a price of $2.00? Market quantity is the sum of individual quantities supplied at each price. At a price of$2.00, Ann supplies 4, Barry supplies 3, and Charlie supplies 0. The market supply is 7.

Subject 3. Market Equilibrium
Aggregate Demand and Aggregate Supply An aggregate demand curve is simply a schedule that shows amounts of a product that buyers collectively desire to purchase at each possible price level. An aggregate supply curve is simply a curve showing the amounts of a product that all firms will produce at each price level. Example 1 Refer to the graph below. What is the market quantity that would be supplied at a price of $2.00? Market quantity is the sum of individual quantities supplied at each price. At a price of$2.00, Ann supplies 4, Barry supplies 3, and Charlie supplies 0. The market supply is 7. Market Equilibrium Equilibrium is a state in which conflicting forces are in balance. In equilibrium, it will be possible for both buyers and sel

#### Flashcard 1419558128908

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#obgyn
Question
Where is the epidural injected?
L3-L4 or L4-L5; between ligamentum flavum & dura

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419561274636

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#obgyn
Question
How does an epidural compare to a spinal?
epidural requires larger dose/volume & takes 10-15min to take effect

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419563109644

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#obgyn
Question
to avoid maternal hypotension & fetal brady

status measured difficulty not learned 37% [default] 0

#### Flashcard 1419564944652

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#obgyn
Question
List 5 conditions that would require consultation to an OB by a fam physician/midwife.
- gestational dm requiring insulin
- VBAC
- gestational HTN
- active antepartum hemorrhage
- preterm labour or rupture of membranes <36 wk
- mult gestations
- malpresentations (breech)
- c/s
- failure to progress/descend
- induction/augmentation w/ oxy if higher risk factor involved (e.g. VBAC, IUGR, etc)
- vulvovag tears (extensive tears)
- retained placenta

status measured difficulty not learned 37% [default] 0

#### Annotation 1419565468940

 #cfa #cfa-level-1 #economics #has-images #microeconomics #reading-13-demand-and-supply-analysis-introduction #subject-3-market-equilibrium Market Equilibrium Equilibrium is a state in which conflicting forces are in balance. In equilibrium, it will be possible for both buyers and sellers to realize their goals simultaneously. The following graph depicts the market supply and demand for concert tickets at Madison Square Garden in New York City. Equilibrium price and quantity are where the supply and demand curves intersect. Draw a horizontal line from the intersection to the price axis. This is equilibrium price: $60. Draw a vertical line from the intersection to the quantity axis. This is equilibrium quantity: 300. It is equilibrium because quantity demanded equals quantity supplied at$60 per ticket. At this price, there is neither surplus (excess supply) nor shortage (excess demand), so there is no downward or upward pressure for the price to change. Surplus will push prices downward towards equilibrium. Suppose the price is initially above the equilibrium price (P2) and sits at P1.Quantity supplied (Q1s) will exceed quantity demanded (Q1D), creating a surplus.The surplus will put downward pressure on prices since producers will begin to lower their prices to sell the surplus.As a result, the price will fall, the quantity supplied will decrease, and the quantity demanded will increase until the equilibrium price (P2) is restored.This process involves movements along supply-and-demand curves since the changes are caused by price fluctuations. Similarly, shortages push prices upward towards equilibrium. Because the price rises if it is below equilibrium, falls if it is above equilibrium, and remains constant if it is at equilibrium, the price is pulled toward equilibrium and remains there until some event changes the equilibrium. We refer to such an equilibrium as being stable because whenever price is disturbed away from the equilibrium, it tends to converge back to that equilibrium. An unstable equilibrium is an equilibrium that is not restored if disrupted by an external force. While most equilibria studied in economics are of the stable variety, a few cases of unstable equilibria do emerge from time to time, in limited circumstances.
; Market quantity is the sum of individual quantities supplied at each price. At a price of $2.00, Ann supplies 4, Barry supplies 3, and Charlie supplies 0. The market supply is 7. <span>Market Equilibrium Equilibrium is a state in which conflicting forces are in balance. In equilibrium, it will be possible for both buyers and sellers to realize their goals simultaneously. The following graph depicts the market supply and demand for concert tickets at Madison Square Garden in New York City. Equilibrium price and quantity are where the supply and demand curves intersect. Draw a horizontal line from the intersection to the price axis. This is equilibrium price:$60. Draw a vertical line from the intersection to the quantity axis. This is equilibrium quantity: 300. It is equilibrium because quantity demanded equals quantity supplied at \$60 per ticket. At this price, there is neither surplus (excess supply) nor shortage (excess demand), so there is no downward or upward pressure for the price to change. Surplus will push prices downward towards equilibrium. Suppose the price is initially above the equilibrium price (P 2 ) and sits at P 1 . Quantity supplied (Q 1s ) will exceed quantity demanded (Q 1D ), creating a surplus. The surplus will put downward pressure on prices since producers will begin to lower their prices to sell the surplus. As a result, the price will fall, the quantity supplied will decrease, and the quantity demanded will increase until the equilibrium price (P 2 ) is restored. This process involves movements along supply-and-demand curves since the changes are caused by price fluctuations. Similarly, shortages push prices upward towards equilibrium. Because the price rises if it is below equilibrium, falls if it is above equilibrium, and remains constant if it is at equilibrium, the price is pulled toward equilibrium and remains there until some event changes the equilibrium. We refer to such an equilibrium as being stable because whenever price is disturbed away from the equilibrium, it tends to converge back to that equilibrium. An unstable equilibrium is an equilibrium that is not restored if disrupted by an external force. While most equilibria studied in economics are of the stable variety, a few cases of unstable equilibria do emerge from time to time, in limited circumstances.<span><body><html>