ECON Midterm II - Custom Scholars
Order Now
Home » Flash Cards » ECON Midterm II

ECON Midterm II

question
Elasticity
answer
A measure of how much one economic variable responds to changes in another variable
question
Price Elasticity of Demand
answer
The responsiveness of quantity demanded to a change in price
question
Elastic demand
answer
Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price (E>1)
question
Inelastic demand
answer
Demand is inelastic when the percentage change in quantity demanded is less than the percentage change in price (E<1)
question
Unit elastic demand
answer
Demand is unit elastic when the percentage change in quantity demanded is equal to the percentage change in price (E=1)
question
Perfectly elastic demand
answer
The case where the quantity demanded is infinitely responsive to price and the price elasticity of demand=infinity
question
Perfectly inelastic demand
answer
The case where the quantity demanded is completely unresponsive to price and the price elasticity of demand=0
question
Cross price elasticity
answer
The percentage change in quantity demanded of one good divided by the percentage change in the price of another good
- substitutes (E>0)
- complements (E<0)
- unrelated (E=0)
question
Income elasticity of demand
answer
A measure of the responsiveness of quantity demanded to changes in income, measured by the percentage change in quantity demanded divided by the percentage change in income
- normal (E>0)
- necessity (0<E<1)
- luxury (E>1)
- inferior (E<0)
question
When demand curves intersect.....
answer
the flatter curve is more elastic
question
The determinants of price elasticity of demand
answer
- Availability of close substitutes
- Passage of time
- Luxuries vs necessities
- Definition of the market
- Share of the good in consumer's budget
question
When demand is inelastic....
answer
a cut in price will decrease total revenue
question
Elasticity is not....
answer
constant along a linear demand curve
question
Utility
answer
the satisfaction people receive from consuming goods and services
question
Indifference curve
answer
a curve that shows the combination of consumption bundles that give the consumer the same utility
question
Marginal Utility
answer
The change in total utility a person receives from consuming one additional unit of a good or service
question
Law of diminishing marginal utility
answer
the principle that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time (i.e.: the satisfaction from the 1st ice cream vs. the 11th ice cream)
question
Budget constraint
answer
P1Q1+P2Q2=M
The limited amount of income available to consumers to spend on goods and services
question
Utility maximization
answer
MU1/P1 = MU2/P2
Marginal Utility per dollar of each good are equal to each other AND add up to budget
question
A consumption diagram has to have...
answer
both the budget constraint and the indifference curve
question
If the price of a good changes....
answer
put on horizontal axis + the slope of the budget constraint changes
question
Rules for indifference curves
answer
- farther is better
- indefinite number of curves
- indifference curves cannot cross
- indifference curves always slope down
question
Technological change
answer
a change in the ability of a firm to produce a given level of output with a given quantity of inputs
question
short run
answer
the period of time during which at least one of a firm's inputs is fixed (Fixed capital (K) labor is variable)
question
long run
answer
the period in which a firm can vary all its inputs, adopt new technology and increase or decrease the size of its physical plant
question
Total cost
answer
the cost of all inputs a firm used in production (VC+FC)
question
Variable Cost
answer
costs that change as output increases PQ
question
Fixed Cost
answer
costs that remain constant as output changes
question
TC=FC+VC
answer
divide everything by Q to get averages (ATC=AFC+AVC)
question
Production function
answer
the relationship between the inputs employed by a firm and the maximum output it can produce with those inputs
question
Marginal product of labor
answer
Additional output a firm produces as a result of hiring one more worker
question
Law of diminishing returns
answer
the principle that, at some point, adding more of a variable input, such as labor, to the same amount of a fixed input, such as capital, will cause the marginal product of the variable input to decline
question
average product of labor
answer
the total output produced by a firm divided by the quantity of workers
question
Marginal cost
answer
the change in a firm's total cost from producing one more unit of a goo or service.
question
Average fixed cost
answer
fixed cost divided by the quantity of output produced
question
average variable cost
answer
variable cost divided by the quantity of output produced
question
constant returns to scale
answer
the situation in which a firm's long-run average costs remain unchanged as it increases output
question
diseconomies of scale
answer
the situation in which a firm's long run average costs rise as the firm increases output
question
economies of scale
answer
a situation in which the average cost of production falls as the firm gets larger and invests more money
question
minimum efficient scale
answer
the level of output at which all economies of scale are exhausted
question
marginal cost has to...
answer
intersect with average total cost at its minimum
1 of 41
question
Elasticity
answer
A measure of how much one economic variable responds to changes in another variable
question
Price Elasticity of Demand
answer
The responsiveness of quantity demanded to a change in price
question
Elastic demand
answer
Demand is elastic when the percentage change in quantity demanded is greater than the percentage change in price (E>1)
question
Inelastic demand
answer
Demand is inelastic when the percentage change in quantity demanded is less than the percentage change in price (E<1)
question
Unit elastic demand
answer
Demand is unit elastic when the percentage change in quantity demanded is equal to the percentage change in price (E=1)
question
Perfectly elastic demand
answer
The case where the quantity demanded is infinitely responsive to price and the price elasticity of demand=infinity
question
Perfectly inelastic demand
answer
The case where the quantity demanded is completely unresponsive to price and the price elasticity of demand=0
question
Cross price elasticity
answer
The percentage change in quantity demanded of one good divided by the percentage change in the price of another good
- substitutes (E>0)
- complements (E<0)
- unrelated (E=0)
question
Income elasticity of demand
answer
A measure of the responsiveness of quantity demanded to changes in income, measured by the percentage change in quantity demanded divided by the percentage change in income
- normal (E>0)
- necessity (0<E<1)
- luxury (E>1)
- inferior (E<0)
question
When demand curves intersect.....
answer
the flatter curve is more elastic
question
The determinants of price elasticity of demand
answer
- Availability of close substitutes
- Passage of time
- Luxuries vs necessities
- Definition of the market
- Share of the good in consumer's budget
question
When demand is inelastic....
answer
a cut in price will decrease total revenue
question
Elasticity is not....
answer
constant along a linear demand curve
question
Utility
answer
the satisfaction people receive from consuming goods and services
question
Indifference curve
answer
a curve that shows the combination of consumption bundles that give the consumer the same utility
question
Marginal Utility
answer
The change in total utility a person receives from consuming one additional unit of a good or service
question
Law of diminishing marginal utility
answer
the principle that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time (i.e.: the satisfaction from the 1st ice cream vs. the 11th ice cream)
question
Budget constraint
answer
P1Q1+P2Q2=M
The limited amount of income available to consumers to spend on goods and services
question
Utility maximization
answer
MU1/P1 = MU2/P2
Marginal Utility per dollar of each good are equal to each other AND add up to budget
question
A consumption diagram has to have...
answer
both the budget constraint and the indifference curve
question
If the price of a good changes....
answer
put on horizontal axis + the slope of the budget constraint changes
question
Rules for indifference curves
answer
- farther is better
- indefinite number of curves
- indifference curves cannot cross
- indifference curves always slope down
question
Technological change
answer
a change in the ability of a firm to produce a given level of output with a given quantity of inputs
question
short run
answer
the period of time during which at least one of a firm's inputs is fixed (Fixed capital (K) labor is variable)
question
long run
answer
the period in which a firm can vary all its inputs, adopt new technology and increase or decrease the size of its physical plant
question
Total cost
answer
the cost of all inputs a firm used in production (VC+FC)
question
Variable Cost
answer
costs that change as output increases PQ
question
Fixed Cost
answer
costs that remain constant as output changes
question
TC=FC+VC
answer
divide everything by Q to get averages (ATC=AFC+AVC)
question
Production function
answer
the relationship between the inputs employed by a firm and the maximum output it can produce with those inputs
question
Marginal product of labor
answer
Additional output a firm produces as a result of hiring one more worker
question
Law of diminishing returns
answer
the principle that, at some point, adding more of a variable input, such as labor, to the same amount of a fixed input, such as capital, will cause the marginal product of the variable input to decline
question
average product of labor
answer
the total output produced by a firm divided by the quantity of workers
question
Marginal cost
answer
the change in a firm's total cost from producing one more unit of a goo or service.
question
Average fixed cost
answer
fixed cost divided by the quantity of output produced
question
average variable cost
answer
variable cost divided by the quantity of output produced
question
constant returns to scale
answer
the situation in which a firm's long-run average costs remain unchanged as it increases output
question
diseconomies of scale
answer
the situation in which a firm's long run average costs rise as the firm increases output
question
economies of scale
answer
a situation in which the average cost of production falls as the firm gets larger and invests more money
question
minimum efficient scale
answer
the level of output at which all economies of scale are exhausted
question
marginal cost has to...
answer
intersect with average total cost at its minimum
Continue to order Get a quote

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Live Chat+1(978) 822-0999EmailWhatsApp

Order your essay today and save 20% with the discount code BEGOOD

Order Now
seoartvin escortizmir escortelazığ escortbacklink satışbacklink saleseskişehir oto kurtarıcıeskişehir oto kurtarıcıoto çekicibacklink satışbacklink satışıbacklink satışbacklink