Supply and Demand/PPFs
What does it mean if a point is on the PPF line?
full employment of resources or no waste
Price elasticity < 1
What is inelastic?
What does the law of demand state?
When the price of a product goes up, the quantity demanded will go down – and vice versa.
What are the 2 characteristics of a monopoly?
e.g. unique product, absolute market power, etc.
What is the biggest planet in our solar system?
Jupiter
A shift along the demand curve is caused by a change in _____.
demand
What is more price elastic?
What is consumer surplus? (=how to calculate)
Willingness to pay - actual price
Describe the demand curve of a perfectly competitive firm.
horizontal- demand is perfectly elastic because competitive firms are price takers.
What do you call a group of wolves? A _____ of wolves
pack
price of related goods (substitutes and compliments), income, future expectations, tastes and number of buyers
If PED coefficient = 1, it means PED is relatively elastic/relatively inelastic/unitary elastic.
In other words, the amount % change in price causes a higher/lower/the same amount % change in quantity demanded.
unitary elastic, the same
Give 2 examples of implicit costs
Opportunity costs of resources owned by firm, e.g. owner's salary sacrificed, bank interest sacrificed, rent sacrificed
Why wouldn't a monopolist charge the highest price?
he highest price would not give them the highest profit. Therefore, a monopolist is likely to charge a profit maximizing output, at MC=MR. T
What is the capital city of Turkey?
Istanbul
(1) ______ is when the government controls price the maximum price of a product.
(2) ______ is when the government controls price the minimum price of a product.
price ceiling, price floor
What is the equation of price elasticity of demand (mid-point formula)?
PED = % change in Qd / % change in P
% change in Qd = [(Q2-Q1)/((Q2+Q1)/2)] x100
% change in P= [(P2-P1)/((P2+P1)/2)] x100
What is marginal cost? (=how to calculate)
Change in total cost / change in quantity
Monopolist: P> MR
PC: P=MR
Who is the singer of "Rolling in the Deep"?
Adele
Name 3 reasons for a PPF to shift outward.
better technology, increase in number of working population, improvement in education and training, discovery of new resources, improvement in health, etc
P1: $70, Q1: 2800
P2: $60, Q2: 3000
Calculate the PED using the mid-point formula.
PED = % change in Qd / % change in P
% change in Qd = [(3000-2800)/ ((3000+2800)/2) ] x100 = 6.9 per cent
% change in P = [(60-70)/((60+70)/2)] x 100 = -15.4 per cent
PED = 6.9%/-15.5% = -0.45
How to calculate Marginal Revenue?
change in total revenue/ change in quantity or output
What is mutual interdependence that can be found in oligopoly?
A situation in which a change in price strategy (or in some other strategy) by one firm will affect the sales and profits of another firm (or other firms)
What is the name of JIC's security guard?
Pak Solikhin