Micro Unit Test Terms - Custom Scholars
Home » Flash Cards » Micro Unit Test Terms

# Micro Unit Test Terms

question
price elasticity of demand
a measure of the sensitivity of demand to changes in price
question
midpoint formula
To calculate elasticity (change in q/ sum of q/2) divided by (change in p/ sum of p/2)
question
Elasticity Ranges
Elastic (above 1) Inelastic (below 1) Unit Elastic (at 1)
question
total revenue test
(Price x Quantity)
Uses elasticity to show how changes in P effect total revenue
Inelastic demand- Price increases, TR increases
Elastic- Price increases, TR decreases
question
price elasticity of supply
a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price
question
cross price elasticity
Determines whether a good is a substitute good(CP=Positive), Complementary (CP=Negative), or unrelated (CP=0). Formula is %change in QD of Product X / % change in price of product Y
question
Income Elasticity
Determines whether a good is a normal good (IE=Positive) or inferior good (IE=Negative) Formula: (% change in quantity demanded / % change in income)
question
Utility
the amount of satisfaction one gets from a good or service
question
marginal utility
Change in satisfaction from consuming another unit of the same product
question
total utility
the total amount of satisfaction obtained from consumption of a good or service Formula: (add up all marginal Utility)
question
Utility Maximization Rule
To get the most for your dollar (Will always maximize the amount of satisfaction)
question
behavioral economics
the study of situations in which people make choices that do not appear to be economically rational
question
explicit costs
Costs that companies have to pay monthly (ex:rent, labor, etc)
question
implicit costs
opportunity costs (what could have been made elsewhere)
question
accounting profit
total revenue minus total explicit cost
question
normal profit
What somebody could be making elsewhere
question
law of diminishing returns
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 and output to increase
question
fixed costs
costs that remain constant as output changes
question
Average Fixed Cost (AFC)
FC/Q (Fixed cost/ quantity)
question
variable costs
costs that change when the quantity of output changes
question
Average Variable Cost (AVC)
VC/Q (variable cost/ quantity)
question
Total Cost (TC)
total fixed costs plus total variable costs (FC+VC)
question
Average Total Cost (ATC)
TC/Q (total costs / quantity)
question
marginal cost
the cost of producing one more unit of a good Formula: (change in cost/ change in quantity)
question
Economies of Scale
Cost advantages reaped by companies when production becomes efficient
question
diseconomies of scale
Cost disadvantages due to increased output
question
constant returns of scale
Increase in input results In a proportional increase in output
1 of 27
question
price elasticity of demand
a measure of the sensitivity of demand to changes in price
question
midpoint formula
To calculate elasticity (change in q/ sum of q/2) divided by (change in p/ sum of p/2)
question
Elasticity Ranges
Elastic (above 1) Inelastic (below 1) Unit Elastic (at 1)
question
total revenue test
(Price x Quantity)
Uses elasticity to show how changes in P effect total revenue
Inelastic demand- Price increases, TR increases
Elastic- Price increases, TR decreases
question
price elasticity of supply
a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price
question
cross price elasticity
Determines whether a good is a substitute good(CP=Positive), Complementary (CP=Negative), or unrelated (CP=0). Formula is %change in QD of Product X / % change in price of product Y
question
Income Elasticity
Determines whether a good is a normal good (IE=Positive) or inferior good (IE=Negative) Formula: (% change in quantity demanded / % change in income)
question
Utility
the amount of satisfaction one gets from a good or service
question
marginal utility
Change in satisfaction from consuming another unit of the same product
question
total utility
the total amount of satisfaction obtained from consumption of a good or service Formula: (add up all marginal Utility)
question
Utility Maximization Rule
To get the most for your dollar (Will always maximize the amount of satisfaction)
question
behavioral economics
the study of situations in which people make choices that do not appear to be economically rational
question
explicit costs
Costs that companies have to pay monthly (ex:rent, labor, etc)
question
implicit costs
opportunity costs (what could have been made elsewhere)
question
accounting profit
total revenue minus total explicit cost
question
normal profit
What somebody could be making elsewhere
question
law of diminishing returns
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 and output to increase
question
fixed costs
costs that remain constant as output changes
question
Average Fixed Cost (AFC)
FC/Q (Fixed cost/ quantity)
question
variable costs
costs that change when the quantity of output changes
question
Average Variable Cost (AVC)
VC/Q (variable cost/ quantity)
question
Total Cost (TC)
total fixed costs plus total variable costs (FC+VC)
question
Average Total Cost (ATC)
TC/Q (total costs / quantity)
question
marginal cost
the cost of producing one more unit of a good Formula: (change in cost/ change in quantity)
question
Economies of Scale
Cost advantages reaped by companies when production becomes efficient
question
diseconomies of scale
Cost disadvantages due to increased output
question
constant returns of scale
Increase in input results In a proportional increase in output

## 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:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
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.

### 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.