Micro test- Chapters 5,6, & 7

question

Consumer's Surplus

answer

The difference between the value to the consumer of the quantity of commodity X purchased and the amount that the market requires the consumer to pay for that quantity of X.

question

Inferior good

answer

A commodity whose quantity demanded falls when the purchaser's real income rises, all other things remaining equal.

question

"law" of demand

answer

states that a lower price generally increases the amount of a commodity that people in a market are willing to buy and also tends to increase the number of buyers. Therefore, for most goods, market demand curves have negative slopes.

question

"Law" of diminishing marginal utility

answer

Asserts that additional units of a commodity are worth less and less to a consumer in money terms. As the individual's consumption increases, the marginal utility of each additional unit declines.

question

Marginal analysis

answer

A method for calculating optimal choices- the choices that best promote the decision that best promote the decision maker's objective. It works by testing whether, and by how much, a small change in a decision will move things towards or away from the goal.

question

Marginal Utility

answer

A commodity to a consumer (measured in money terms) is the maximum amount of money that she or he is willing to pay for one more unity of that commodity.

question

Market demand curve

answer

Shows how the total quantity of some product demanded by all consumers in the market during a specified period of time changes as the price of that product changes, holding all other things constant.

question

Total Monetary utility

answer

A quantity of a good to a consumer (measured in money terms) is the maximum amount of money that he or she is willing to give up in exchange for it.

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Complements

answer

Two goods; when a increase in the quantity consumed of one increases the quantity demanded of the other, all other things remaining constant.

question

Cross elasticity of demand

answer

For product x to change in the price of another product, Y, is the ratio of the percentage change in quantity demanded of X to the percentage change in the price of Y that brings about the change in quantity demanded.

question

(price) elasticity of demand

answer

Is the ratio of the percentage change in quantity demanded to the percentage change in price that brings about the change in quantity.

question

Elastic, inelastic, and unit-elastic demand curves

answer

A given percentage price change leads to a larger percentage change in quantity demanded.

question

Income elasticity of demand

answer

The ratio of the percentage change in quantity demanded to the percentage change in income.

question

Optimal decision

answer

The one that best serves the objective of the decision maker, whatever those objectives may be. It is selected by explicit or implicit comparison with the possible alternative choices. The term optimal connotes neither approval nor disapproval of the objective itself.

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Substitutes

answer

Two goods; if an increase in the quantity consumed of one cuts the quantity demanded of the other things remaining constant.

question

Average physical product (APP)

answer

The total physical product (TPP) divided by the quantity of input. thus, APP=TPP/X, where X = the quantity of input.

question

Economies of scale (increasing returns to scale)

answer

When all input quantities are increased by X percent, the quantity of output rises by more than X percent.

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Fixed Cost

answer

The cost of an input whose quantity does not rise when output goes up, one that the firm requires to produce any output at all. The total cost of such when the output changes.

question

Long run

answer

A period of time long enough for all of the firm's current commitments to come to an end.

question

Marginal physical product (MPP)

answer

The increase in total output that results from a one-unit increase in the input quantity, holding the amounts of all other inputs constant.

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Marginal revenue product

answer

The additional revenue that the producer earns from the increased sales when it uses an additional unit of the input.

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Short run

answer

A period of time during which some of the firm's cost commitments will not have ended.

question

Total physical product (TPP)

answer

The amount of output it obtains in total from a given quantity of input.

question

Variable cost

answer

Any other cost of the firms operation that is not a fixed cost.

1 of 24

question

Consumer's Surplus

answer

The difference between the value to the consumer of the quantity of commodity X purchased and the amount that the market requires the consumer to pay for that quantity of X.

question

Inferior good

answer

A commodity whose quantity demanded falls when the purchaser's real income rises, all other things remaining equal.

question

"law" of demand

answer

question

"Law" of diminishing marginal utility

answer

Asserts that additional units of a commodity are worth less and less to a consumer in money terms. As the individual's consumption increases, the marginal utility of each additional unit declines.

question

Marginal analysis

answer

question

Marginal Utility

answer

A commodity to a consumer (measured in money terms) is the maximum amount of money that she or he is willing to pay for one more unity of that commodity.

question

Market demand curve

answer

Shows how the total quantity of some product demanded by all consumers in the market during a specified period of time changes as the price of that product changes, holding all other things constant.

question

Total Monetary utility

answer

A quantity of a good to a consumer (measured in money terms) is the maximum amount of money that he or she is willing to give up in exchange for it.

question

Complements

answer

Two goods; when a increase in the quantity consumed of one increases the quantity demanded of the other, all other things remaining constant.

question

Cross elasticity of demand

answer

question

(price) elasticity of demand

answer

Is the ratio of the percentage change in quantity demanded to the percentage change in price that brings about the change in quantity.

question

Elastic, inelastic, and unit-elastic demand curves

answer

A given percentage price change leads to a larger percentage change in quantity demanded.

question

Income elasticity of demand

answer

The ratio of the percentage change in quantity demanded to the percentage change in income.

question

Optimal decision

answer

question

Substitutes

answer

Two goods; if an increase in the quantity consumed of one cuts the quantity demanded of the other things remaining constant.

question

Average physical product (APP)

answer

The total physical product (TPP) divided by the quantity of input. thus, APP=TPP/X, where X = the quantity of input.

question

Economies of scale (increasing returns to scale)

answer

When all input quantities are increased by X percent, the quantity of output rises by more than X percent.

question

Fixed Cost

answer

The cost of an input whose quantity does not rise when output goes up, one that the firm requires to produce any output at all. The total cost of such when the output changes.

question

Long run

answer

A period of time long enough for all of the firm's current commitments to come to an end.

question

Marginal physical product (MPP)

answer

The increase in total output that results from a one-unit increase in the input quantity, holding the amounts of all other inputs constant.

question

Marginal revenue product

answer

The additional revenue that the producer earns from the increased sales when it uses an additional unit of the input.

question

Short run

answer

A period of time during which some of the firm's cost commitments will not have ended.

question

Total physical product (TPP)

answer

The amount of output it obtains in total from a given quantity of input.

question

Variable cost

answer

Any other cost of the firms operation that is not a fixed cost.

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Micro test- Chapters 5,6, & 7

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