question
elastic demand
answer
A situation in which consumer demand is sensitive to changes in price
question
inelastic demand
answer
A situation in which an increase or a decrease in price will not significantly affect demand for the product
question
unit elastic demand
answer
demand is unit elastic when the percentage change in quantity demanded is equal to the percentage change in price, so the price elasticity is equal to 1 in absolute value
question
elasticity of demand formula
answer
elastic, horizontal leaning graph (luxury)
question
Ed > 1
answer
inelastic, vertical leaning graph (necessity)
question
Ed < 1
answer
unit elastic, curve graph
question
Ed = 1
answer
perfectly inelastic, vertical graph
question
Ed = 0
answer
perfectly elastic, horizontal graph
question
Ed = infinity
answer
Price x Quantity
question
total revenue
answer
Inelastic - price increases then total revenue increase vice versa. Elastic - price increase then total revenue decreases vice versa.
question
total revenue test
answer
substitutability, proportion of income, luxuries vs necessities, time, durability
question
determinants of price elasticity of demand
answer
quantity supplied by producers is relatively responsive to price changes
question
elastic supply
answer
quantity supplied by producers when it is relatively insensitive to price changes
question
inelastic supply
answer
inelastic good
question
what type of good would the government want to tax
answer
perfectly inelastic
question
elasticity of supply in the short run
answer
elastic
question
elasticity of supply in the long run
answer
substitute good
question
cross elasticity of demand
answer
complementary good
question
cross elasticity of demand +/+ = +
answer
normal good
question
cross elasticity of demand -/+ = -
answer
inferior good
question
income elasticity of demand
answer
MUx/Price x = MUy/Price y
question
income elasticity of demand +/+ = +
answer
land, labor, capital, and entrepreneurship cost
question
income elasticity of demand -/+ = -
answer
opportunity cost
question
utility is maximized when
answer
explicit cost + implicit cost
question
explicit cost
answer
explicit cost ONLY
question
implicit cost
answer
total revenue - explicit cost
question
economic cost
answer
rent
question
accounting cost
answer
total revenue - explicit cost - implicit cost
question
accounting profit
answer
zero economic profit
question
fixed cost
answer
the cost of producing one more unit of a good
question
economic profit
answer
total cost/quantity (TC/Q)
question
normal profit
answer
total cost - fixed cost
question
marginal cost
answer
variable cost/quantity (VC/Q)
question
average total cost (ATC)
answer
starts when average total cost starts to become more expensive
question
variable cost
answer
stays the same
question
average variable cost
answer
increases
question
diminishing returns
answer
increases
question
as output increases, fixed cost
answer
decreases then increase with a "U" shape
question
as output increases, total cost
answer
the change in total revenue associated with one additional unit of input
question
as output increases, variable cost
answer
MRP is greater than or equal to MRC (wages)
question
as output increases, average variable cost
answer
the change in output from hiring one additional unit of labor
question
marginal revenue product
answer
the additional output produced by one more unit of capital
question
Continue to hire until...
answer
the percentage change in price exceeds the percentage change in quantity demanded of a good
question
marginal product of labor
answer
always maximized at the midpoint of any demand curve
question
marginal product of capital
answer
undefined
question
demand is said to be inelastic when
answer
undefined
question
total revenue is
answer
undefined
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
