Ch. 6 Optimal Output
Ch. 7- Consumer Choices
Ch. 8- Supply
Ch. 9-Demand
100
A graph that shows all combinations of two outputs that can be produced with a constant level of inputs is called a
PPF
Production Possibilities Frontier
100
We assume that individuals make ___________ decisions that will benefit themselves.
Rational
100
The law of supply states that
the price of a good and quantity supplied have a positive relationship
100
The law of demand states that
the price of a good and quantity supplied have an inverse relationship
200
Where would a point on the PPF be that is considered attainable but not efficient?
Inside the PPF
200
What is the term for placing a numerical value on the consumption of a good or service? (satisfaction)
Utility or utils
200
An elasticity measures
how responsive one variable is to another variable
200
If potential buyers expect the price of gold to increase, then the
demand for gold will increase today
300
The physical trade-off between outputs is called the
MRPS
Marginal rate of product substitution
300
What is the change in utility when consumption is increased by one unit called?
Marginal utility
300
The elasticity of a market is typically __________ relative to the elasticity of an individual product.
less elastic
300
If the income elasticity for a product is positive but less than 1, the product is a
Normal, necessity good
400
What line represents the same revenue of two different outputs?
Isorevenue line
400
Indifference curves are convex to the origin due to
Law of diminishing marginal utility
400
Each of the following is a determinant of supply except
-number of sellers
-technology
-tastes and preferences
-input prices
tastes and preferences
400
If the cross price elasticity of demand is a positive number, the two goods are
substitutes
500
The profit-maximizing combination of outputs can be found at the tangency of
The PPF and the isorevenue line
500
A consumer has an indifference curve between chicken and beef and beef experiences a price decrease relative to chicken. What happens to the indifference curve and budget constraint?
500
How strong the relationship is of two products in production can by measured by
Cross-price elasticity of supply
500
If a good is an inferior good, when income increases, consumers will buy __________ of the good.
less