TEST BANK INTERMEDIATE MICROECONOMICS NINTH EDITION HAL VARIAN ACADEMIC REVIEW ANSWERED EXERCISES FULL SOLUTION 2026

TEST BANK INTERMEDIATE MICROECONOMICS
NINTH EDITION HAL VARIAN ACADEMIC
REVIEW ANSWERED EXERCISES FULL
SOLUTION 2026
◉ Opportunity cost. Answer: The value of all that must be sacrificed to
do the activity.


◉ Sunk cost. Answer: A cost that cannot be avoided regardless of future
actions.


◉ Reservation price. Answer: The minimum amount you would spend to
do something.


◉ Marginal cost. Answer: The cost of an additional unit.


◉ Marginal benefit. Answer: The benefit of an additional unit.


◉ MB = MC. Answer: Stop when marginal benefit = marginal cost


◉ Price elasticity of demand. Answer: The percentage change in the
quantity of a good demanded that results from a 1 percent change in its
price.

, ◉ Elasticity of demand. Answer: εD = %∆QD / %∆P
Price Elasticity of Demand = % Change in Quantity Demanded / %
Change in Price


◉ Elasticity of supply. Answer: εS = %∆QS / %∆P


◉ Elasticity. Answer: A measure of how much one economic variable
responds to changes in another economic variable.


◉ Elastic. Answer: Less than -1


◉ Unit Elastic. Answer: -1


◉ Inelastic. Answer: Greater than -1


◉ Normal Good. Answer: Income ↑ ⇒ Demand ↑ and Income ↓ ⇒
Demand ↓


◉ Inferior Good. Answer: Income ↑ ⇒ Demand ↓ and Income ↓ ⇒
Demand ↑


◉ Compliments. Answer: Price of one ↑ ⇒ Demand for the other ↓