Definitions & Explanations
This measures how responsive quantity demanded is to price changes
What is price elasticity of demand?
What are the following: change in income, change in seasons?
Demand shifters
In this time period, at least one input is fixed
Short run
A market with many buyers and sellers, with identical products
Pure competition
The largest ocean on Earth
Pacific Ocean
The next best alternative that is given up
What is opportunity cost?
As price increases quantity decreases, and as price decrease quantity increases
Law of Demand
In this period, all inputs are variable
Long run
A single seller dominating the market
Monopoly
The U.S. state known as the “Cornhusker State”
Nebraska
A good whose demand increases when income increases
Normal Good
What are lard, Top Ramen and used clothing?
Inferior goods
Costs that do not change as output changes
Fixed costs
A few large firms controlling the market
Oligopoly
Third planet from the sun
Earth
The additional cost of producing one more unit
Marginal cost
The relationship of PA increases, then QB increases
Substitutes
Costs that change with production level
Variable costs
What type of market: Automobile industry, airline industry, cell phone service providers
Oligopoly
JD Vance
It means responsiveness
Elasticity
What is the elasticity for a necessary good like insulin or milk?
Inelastic
What do we call the condition when adding more unit of input leads to a decrease in output
Law of Diminishing Returns
What type of market: MLB, NFL, PGE, utilities
Monopoly
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