Micro Exam 1

Q: Income Elasticity

E>0=nominal good; E<0=inferior good

Q: Cross-Price Elasticity of Demand

E>0=substitutes; E<0=complements

Q: Marginal Utility equation

change in total utility/change in quantity

Q: Substitution effect

One good relatively cheaper and one good relatively more expensive

Q: Income Effect

Feel richer or poorer due to price change

Q: Expected Value equation

Sum (probability of outcome)(payoff)

Q: Expected Utility equation

Sum (probability of outcome)(utility)

Q: Certainty Equivalent

The amount of for sure money that gives the same expected utility as the gamble's expected utility

Q: Risk Premium equation

Expected value of game 0 certainty equivalent

question

Elasticity equation

answer

(Derivative Q/Derivative P) x (P/Q)

question

Income Elasticity

answer

E>0=nominal good; E<0=inferior good

question

Cross-Price Elasticity of Demand

answer

E>0=substitutes; E<0=complements

question

Marginal Utility equation

answer

change in total utility/change in quantity

question

marginal rate of substitution

answer

MUx/MUy=Px/Py

question

Substitution effect

answer

One good relatively cheaper and one good relatively more expensive

question

Income Effect

answer

Feel richer or poorer due to price change

question

Intermediate point

answer

New prices, old utility

question

Lagrange Method equation

answer

U(X,Y)-symbol(PxX+PyY-I)

question

Expected Value equation

answer

Sum (probability of outcome)(payoff)

question

Expected Utility equation

answer

Sum (probability of outcome)(utility)

question

Certainty Equivalent

answer

The amount of for sure money that gives the same expected utility as the gamble's expected utility

question

Risk Premium equation

answer

Expected value of game 0 certainty equivalent

question

Average Product of Labor equation

answer

q/L

question

Marginal Rate of Technical Substitution equation

answer

MPL/MPK

question

Economic Costs equation

answer

Accounting costs + implicit opportunity costs

question

Marginal Cost equation

answer

W/MPL

question

Average Total Cost equation

answer

TC/q

question

User Cost of Capital equation

answer

Depreciation + interest forgone

question

Interest Forgone equation

answer

Interest rate x cost

question

Rental Rate equation

answer

Depreciation rate + interest rate

question

Depreciation Rate equation

answer

Depreciation/cost

question

Total Cost equation

answer

ML+rK

question

Economies of Scope

answer

(C(q1)+C(q2)-C(q1,q2))/C(q1,q2)

question

Returns of scale

answer

Inputs and outputs, inputs have same ratio, has economies of scale

question

Economies of Scale

answer

Output and cost, inputs change in any matter, easier to achieve

question

LAC decreases at first because

answer

Specialization, flexibility of scale, inputs are cheaper in bulk

question

LAC increases later because

answer

Limited space, machines, management issues

question

How to reduce risk?

answer

Diversification and mutual funds

question

Perfect Substitutes

answer

Has linear isoquants with a constant MRTS

question

Perfect Complements

answer

90 degree angle isoquants

question

Risk Averse

answer

Square root

question

Risk Neutral

answer

Linear with Marginal Utility constant

question

Risk Loving

answer

Exponential

question

Diseconomies of Scale

answer

SC<0

question

Cost minimization

answer

MPL/MPK=w/r

question

Sunk Costs

answer

Already paid for and cannot be refunded or recovered

1 of 37

question

Elasticity equation

answer

(Derivative Q/Derivative P) x (P/Q)

question

Income Elasticity

answer

E>0=nominal good; E<0=inferior good

question

Cross-Price Elasticity of Demand

answer

E>0=substitutes; E<0=complements

question

Marginal Utility equation

answer

change in total utility/change in quantity

question

marginal rate of substitution

answer

MUx/MUy=Px/Py

question

Substitution effect

answer

One good relatively cheaper and one good relatively more expensive

question

Income Effect

answer

Feel richer or poorer due to price change

question

Intermediate point

answer

New prices, old utility

question

Lagrange Method equation

answer

U(X,Y)-symbol(PxX+PyY-I)

question

Expected Value equation

answer

Sum (probability of outcome)(payoff)

question

Expected Utility equation

answer

Sum (probability of outcome)(utility)

question

Certainty Equivalent

answer

The amount of for sure money that gives the same expected utility as the gamble's expected utility

question

Risk Premium equation

answer

Expected value of game 0 certainty equivalent

question

Average Product of Labor equation

answer

q/L

question

Marginal Rate of Technical Substitution equation

answer

MPL/MPK

question

Economic Costs equation

answer

Accounting costs + implicit opportunity costs

question

Marginal Cost equation

answer

W/MPL

question

Average Total Cost equation

answer

TC/q

question

User Cost of Capital equation

answer

Depreciation + interest forgone

question

Interest Forgone equation

answer

Interest rate x cost

question

Rental Rate equation

answer

Depreciation rate + interest rate

question

Depreciation Rate equation

answer

Depreciation/cost

question

Total Cost equation

answer

ML+rK

question

Economies of Scope

answer

(C(q1)+C(q2)-C(q1,q2))/C(q1,q2)

question

Returns of scale

answer

Inputs and outputs, inputs have same ratio, has economies of scale

question

Economies of Scale

answer

Output and cost, inputs change in any matter, easier to achieve

question

LAC decreases at first because

answer

Specialization, flexibility of scale, inputs are cheaper in bulk

question

LAC increases later because

answer

Limited space, machines, management issues

question

How to reduce risk?

answer

Diversification and mutual funds

question

Perfect Substitutes

answer

Has linear isoquants with a constant MRTS

question

Perfect Complements

answer

90 degree angle isoquants

question

Risk Averse

answer

Square root

question

Risk Neutral

answer

Linear with Marginal Utility constant

question

Risk Loving

answer

Exponential

question

Diseconomies of Scale

answer

SC<0

question

Cost minimization

answer

MPL/MPK=w/r

question

Sunk Costs

answer

Already paid for and cannot be refunded or recovered

Continue to order Get a quote

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.

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.

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.

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.

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.

Micro Exam 1

Recent Posts

Recent Comments

Calculate the price of your order

Our guarantees

Money-back guarantee

Zero-plagiarism guarantee

Free-revision policy

Privacy policy

Fair-cooperation guarantee