Elasticity
If the elasticity of demand for a good is equal to 1, the good is referred to as this.
Unit Elastic
There are how many types of elasticity dealing with Demand?
This is the period of time where the owner of a firm considers the amount of one or more inputs as "fixed".
Short-Run
This imposed price is the MINIMUM that can be charged in the market for a good.
Price Floor
Name one type of "economies" other than Economies of Scale.
Economies of Scope
Network Economies
This is the method of finding elasticity where you are given a point, and then calculate by moving either up or down.
Starting-Point Method
This states that the more you have of something, the less value you get from one more unit of that
thing.
Principle of Diminishing Marginal Utility
The production of 120 sofas per week requires 15 workers. The average product of each worker is ______________ sofas per week.
8
This is the change in total costs that results from increasing total product by one unit (ΔTC/ΔQ).
Marginal Cost
Assume that as your income increases, your consumption of hot dogs decreases. We can assume that your income elasticity of demand for hot dogs is what?
Less Than 0
The estimated price elasticity of demand for attending a Major League baseball spring training game is |-1.00|. How would revenue change if the owners decreased ticket prices?
It would Decrease.
There is an inverse relationship between marginal cost and __________.
Marginal Product of Labor.
The difference between the total value to the consumer of consuming a specific amount of a good and the amount the consumer must pay for that amount of the good.
Consumer Surplus
Two goods with a negative cross-price elasticity of demand are referred to as this.
Compliments
This is a graphical depiction of what we can and cannot afford. It requires you to know how the maximum amount of good X or good Y that you can afford.
Budget Constraint
This is the name of the trend when Long-run average total cost decreases as the quantity of output increases.
Economies of Scale
Suppose Gail is willing to pay $90 for a new pair of shoes and Karen is willing to pay $60. What is the gain in their combined consumer surplus if the price of the shoes falls from $70 to $50?
30
Calculate the Elasticity of Demand:
Staring Point: Q - 2, P - $9
End Point: Q - 4, P - $8
If a good has an elasticity of 1.5, how do you find the the change in quantity demanded given a 10% decrease in price.
2. Add .15 to 1 to give you 1.15
3. Multiply the quantity by 1.15
What expressions do you use to see if you should hire more labor?
P*MPL ≥ W
What expression describes the optimal combination of two goods in regards to marginal utility and price?
MUX/PX = MUY/PY