Exam 2 part 3

1. 1A measure of the percentage change in one variable brought about by a 1% change in another variable
   [blank_start]Elasticities[blank_end]

   1. AElasticities
2. 2What is the Percentage change formula
   [blank_start](New value-old value)/old value[blank_end]

   1. A(New value-old value)/old value
3. 3Percentage change in the quantity demanded of a good in response to a 1% change in its price
   [blank_start]Price elasticity of demand[blank_end]

   1. APrice elasticity of demand
4. 4Price elasticity of demand is a [blank_start]local[blank_end] measure

   1. Alocal
5. 5Price elasticity of demand will ALWAYS be [blank_start]Negative[blank_end]. Because of the law of demand

   1. ANegative
6. 6What is a problem with the algebraic point formula for price elasticity of demand?
   Gives [blank_start]diff answers on range on demand curve[blank_end]

   1. Adiff answers on range on demand curve
7. 7You should only use the algebraic point formula as
   [blank_start]The basis for the midpoint (ARC) formula[blank_end]

   1. AThe basis for the midpoint (ARC) formula
8. 8price elasticity of demand is connected to
   [blank_start]Firm revenue[blank_end]

   1. AFirm revenue
9. 9Factors that affect Price elasticity of demand
   [blank_start]closeness,income,time,storage,good type[blank_end]

   1. Acloseness,income,time,storage,good type
10. 10What is the Income elasticity general formula
    [blank_start](%change in Q)/(%change in I)[blank_end]

    1. A(%change in Q)/(%change in I)

11. 11What type of good is this when: Income elasticity > 0
    [blank_start]normal good[blank_end]

    1. Anormal good
12. 12What type of good is this when: Income elasticity > 1
    [blank_start]Luxury good[blank_end]

    1. ALuxury good
13. 13What type of good is this when: Income elasticity < 0
    [blank_start]inferior good[blank_end]

    1. Ainferior good
14. 14What is the Cross price Elasticity general formula
    [blank_start](% change Qx) / (% change Py)[blank_end]

    1. A(% change Qx) / (% change Py)
15. 15What type of good is it when: Eq,p 1 > 0
    [blank_start]substitutes[blank_end]

    1. Asubstitutes
16. 16What type of good is it when: Eq,p 1 < 0
    [blank_start]Compliments[blank_end]

    1. ACompliments
17. 17If A is preferred to B, B > C, then A>C
    [blank_start]Transitivity[blank_end]

    1. ATransitivity
18. 18Completeness, Transitivity, More is better
    are all apart of [blank_start]consumer behavior[blank_end]

    1. Aconsumer behavior
19. 19the pleasure or satisfaction people get from their economic activity
    [blank_start]utility[blank_end]

    1. Autility
20. 20A measure of happiness or well being
    [blank_start]utility and indifference curves[blank_end]

    1. Autility and indifference curves
21. 21A curve that shows all the combinations of goods or services that provide the same level of utility
    [blank_start]Indifference curve[blank_end]

    1. AIndifference curve
22. 22Indifference curve properties
    [blank_start]neg slope,^curve=^utility,curves no cros[blank_end]

    1. Aneg slope,^curve=^utility,curves no cros
23. 23To get more of one good you must be willing to give up the other
    [blank_start]tradeoffs[blank_end]

    1. Atradeoffs
24. 24the number of units of Y that must be sacrificed for a unit of X, to maintain a constant level of satisfaction
    [blank_start]Marginal Rate of Substitution slope[blank_end]

    1. AMarginal Rate of Substitution slope
25. 25every combination on U1 has the SAME level of satisfaction (utility) = the tradeoffs are, say they want more beer, they HAVE to give up a number of wings.
    This is an example of [blank_start]Marginal Rate of Substitution[blank_end]

    1. AMarginal Rate of Substitution
26. 26can vary along the indifference curve, because the consumption of one good can be pushed too far. And as you work down and down the curve, it gets smaller and smaller
    [blank_start]Diminishing the MRS[blank_end]

    1. ADiminishing the MRS
27. 27this consumer should be willing to trade 1 Pepsi for 1 Coke, no matter how much of each they have
    [blank_start]Perfect substitutes[blank_end]
    
    
    

    1. APerfect substitutes
28. 28-Goods must be consumed together at the same ratio
    -Typically, an L shape
    [blank_start]Perfect compliments[blank_end]

    1. APerfect compliments
29. 29Budget Constraints Shifters
    [blank_start]Changes in Income or prices[blank_end]
    

    1. AChanges in Income or prices
30. 30The objective of the consumer is to choose the consumption bundle with the highest utility (highest indifference curve) while still being within their budget (budget constraint)
    [blank_start]Consumer Equilibrium[blank_end]
    

    1. AConsumer Equilibrium
31. 31What is the Utility maximization rule
    [blank_start]MRS=Px/Py,slope Indiff Curve=budget[blank_end]

    1. AMRS=Px/Py,slope Indiff Curve=budget
32. 32utility maximization occurs at the point of [blank_start]tangency[blank_end] (just touching each other) between the indifference curve and the budget constraint
    

    1. Atangency
33. 33Mathematical function that defines the maximum amount of output that can be produced with a given set of inputs
    [blank_start]Production Function[blank_end]

    1. AProduction Function
34. 34Maximum level of output that can be produced with a given amount of inputs
    [blank_start]Total products[blank_end]

    1. ATotal products
35. 35Average product of labor
    "output per worker" formula
    [blank_start]Q/L[blank_end]

    1. AQ/L
36. 36Average Product of Capital :
    "Output per machine / machine hour" formula
    [blank_start]Q/K[blank_end]

    1. AQ/K
37. 37Period of time where some factors of production (inputs) are fixed.
    [blank_start]short run[blank_end]

    1. Ashort run
38. 38Period of time where all inputs are variable (can change)
    [blank_start]long run[blank_end]

    1. Along run
39. 39A curve that shows the various combinations of inputs that will produce the same level of output. And every point along the curve, represents the same level of output
    [blank_start]Isoquant[blank_end]

    1. AIsoquant
40. 40The rate at which a producer can substitute between 2 inputs and maintain the same level of output
    - Absolute value of the slope of the isoquant
    [blank_start]Marginal Rate of Technical Substitution[blank_end]
    

    1. AMarginal Rate of Technical Substitution
41. 41Marginal Rate of Technical Substitution (MRTS) formula
    [blank_start](change in K/ change in L)[blank_end]
    

    1. A(change in K/ change in L)
42. 42The rate at which output increases in response to proportional increases in all inputs
    - Think: If all inputs doubled, what would happen to output?
    [blank_start]Returns to scale[blank_end]

    1. AReturns to scale
43. 43Doubling all inputs exactly doubles output
    [blank_start]Constant Returns to Scale[blank_end]

    1. AConstant Returns to Scale
44. 44Doubling all inputs more than doubles output
    [blank_start]Increasing Returns to Scale[blank_end]

    1. AIncreasing Returns to Scale
45. 45Doubling all inputs less than doubles output
    [blank_start]Decreasing Returns to Scale[blank_end]

    1. ADecreasing Returns to Scale
46. 46Combination of inputs that yield the same costs
    [blank_start]Isocosts[blank_end]

    1. AIsocosts
47. 47Isocost formula
    [blank_start]C= wL +rK[blank_end]

    1. AC= wL +rK
48. 48To maximize profits, the firm must produce its output at the lowest possible cost
    [blank_start]cost minimization[blank_end]

    1. Acost minimization
49. 49Cost minimization input rule
    [blank_start]MRTSkr=w/r,Slope o isoquant=isocost[blank_end]

    1. AMRTSkr=w/r,Slope o isoquant=isocost
50. 50total cost formula
    [blank_start]fixed costs+variable costs[blank_end]

    1. Afixed costs+variable costs

Description

Quiz on Exam 2 part 3, created by Tori Fisher on 03/11/2022.

Author

Tori Fisher

Language

English

Views

1

Tags

business analyst

Rating

No ratings yet

Rate this quiz

Rate this quiz

More on Price Elasticity of Demand