question
total revenue (TR)
answer
price x quantity
question
total revenue test
answer
P^ TRv =demand elastic
P^ TR^ = demand inelastic
Pv TR^ = demand elastic
Pv TRv = demand inelastic
P^ TR^ = demand inelastic
Pv TR^ = demand elastic
Pv TRv = demand inelastic
question
coefficient of price elasticity of demand
answer
% change in quantity demanded/ % change in price
OR
((Q2-Q1)/(Q1+Q2)/2)/ ((P2-P1)/(P1+P2)/2)
OR
((Q2-Q1)/(Q1+Q2)/2)/ ((P2-P1)/(P1+P2)/2)
question
coefficient > 1
answer
elastic demand
question
coefficient < 1
answer
inelastic demand
question
coefficient = 1
answer
unit elastic demand
question
coefficient= infinity
answer
perfectly elastic demand
question
coefficient= 0
answer
perfectly inelastic demand
question
cross elasticity of demand: comparing 2 items
answer
% change of quantity of 1st item/ % change of price of 2nd item
question
cross elasticity coefficient positive
answer
items substitute for eachother
question
cross elasticity coefficient negative
answer
items complement eachother
question
income elasticity of demand
answer
% change of quantity/ % change of income
question
income elasticity coefficient positive
answer
normal good
question
income elasticity coefficient negative
answer
inferior good
question
supply elasticity
answer
% change in quantity supplied/ % change of price
question
tax revenue
answer
(price with tax- price seller receives) x quantity
question
utility maximization rule
answer
marginal utility of good a/ unity cost of good a = marginal utility of good b/ unit cost of good b
question
average revenue
answer
total revenue/ Q output
question
marginal revenue
answer
change in total revenue/ change in Q output
question
When is total revenue at maximum
answer
when marginal revenue goes negative
question
perfect competition marginal revenue=?
answer
price (demand) for individual sellers
question
perfect competition individual seller price=?
answer
market price (price taker)
question
imperfect competition marginal revenue < ?
answer
price (demand)
question
imperfect competition individual seller is ?
answer
the market (price maker)
question
average fixed cost
answer
total fixed cost/ Q output
question
average variable cost
answer
total variable cost/ Q output
question
total cost
answer
total fixed cost + total average cost
OR
unit cost x quantity output
OR
unit cost x quantity output
question
average total cost
answer
average cost/ Q output
OR
average fixed cost + average variable cost
OR
average fixed cost + average variable cost
question
marginal cost
answer
change in total cost/ change in Q output
question
average product
answer
total product/ Q input
question
marginal product
answer
change in total product/ change in Q input
question
total product is at maximum when...?
answer
marginal product goes negative
question
profit maximizing rule
answer
marginal revenue= marginal cost
OR
MR = MC
OR
MR = MC
question
total revenue
answer
total cost + total profit
question
total profit
answer
unit profit x quantity
question
marginal revenue product
answer
change in total revenue/ change in Q of resource
question
marginal resource cost
answer
change in total resource cost/ change in Q of resource
question
profit maximization rule when purchasing a single resource
answer
marginal revenue product = marginal resource cost
question
perfect competition marginal revenue product
answer
product price x marginal product
question
imperfect competition marginal revenue product
answer
(product price x marginal product) - price change on previous units sold
question
perfect competition market wage
answer
individual firms marginal resource cost (wage taker)
question
imperfect competition (monopsony) wage is marginal revenue product =?
answer
marginal resource cost at labor supply curve (wage maker)
question
number of workers
answer
total product (output)/ average product
question
average total cost
answer
total cost / output (product)
question
least cost rule
answer
marginal product of labor/ unit price of labor = marginal product of capital/ unit price of capital
question
profit maximization rule for purchasing multiple resources
answer
marginal product of labor/ unit price of labor = marginal product of capital/ unit price of capital
question
market equilibrium
answer
marginal private cost = marginal private benefits
question
socially optimal allocation
answer
marginal social cost = marginal social benefit
question
negative production externality
answer
overallocation; social cost> private cost
question
positive production externality
answer
underallocation; social cost < private cost
question
negative consumption externality
answer
overallocation; social benefit< private benefit
question
positive consumption externality
answer
underallocation; social benefit> private benefit
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