INTERMEDIATE MICROECONOMICS EXAM 1 TEST BANK
QUESTIONS WITH DETAILED VERIFIED ANSWERS;
ALREADY GRADED A; 2025
Economic cost - ANS-Explicit cost + opportunity cost
Opportunity cost - ANS-The value of all that must be sacrificed to do the activity.
Sunk cost - ANS-A cost that cannot be avoided regardless of future actions.
Reservation price - ANS-The minimum amount you would spend to do something.
Marginal cost - ANS-The cost of an additional unit.
Marginal benefit - ANS-The benefit of an additional unit.
MB = MC - ANS-Stop when marginal benefit = marginal cost
Price elasticity of demand - ANS-The percentage change in the quantity of a good demanded that results
from a 1 percent change in its price.
Elasticity of demand - ANS-εD = %∆QD / %∆P
Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price
Elasticity of supply - ANS-εS = %∆QS / %∆P
Elasticity - ANS-A measure of how much one economic variable responds to changes in another
economic variable.
Elastic - ANS-Less than -1
Unit Elastic - ANS--1
Inelastic - ANS-Greater than -1
Normal Good - ANS-Income ↑ ⇒ Demand ↑ and Income ↓ ⇒ Demand ↓
Inferior Good - ANS-Income ↑ ⇒ Demand ↓ and Income ↓ ⇒ Demand ↑
Compliments - ANS-Price of one ↑ ⇒ Demand for the other ↓
Price of one ↓ ⇒ Demand for the other ↑
QUESTIONS WITH DETAILED VERIFIED ANSWERS;
ALREADY GRADED A; 2025
Economic cost - ANS-Explicit cost + opportunity cost
Opportunity cost - ANS-The value of all that must be sacrificed to do the activity.
Sunk cost - ANS-A cost that cannot be avoided regardless of future actions.
Reservation price - ANS-The minimum amount you would spend to do something.
Marginal cost - ANS-The cost of an additional unit.
Marginal benefit - ANS-The benefit of an additional unit.
MB = MC - ANS-Stop when marginal benefit = marginal cost
Price elasticity of demand - ANS-The percentage change in the quantity of a good demanded that results
from a 1 percent change in its price.
Elasticity of demand - ANS-εD = %∆QD / %∆P
Price Elasticity of Demand = % Change in Quantity Demanded / % Change in Price
Elasticity of supply - ANS-εS = %∆QS / %∆P
Elasticity - ANS-A measure of how much one economic variable responds to changes in another
economic variable.
Elastic - ANS-Less than -1
Unit Elastic - ANS--1
Inelastic - ANS-Greater than -1
Normal Good - ANS-Income ↑ ⇒ Demand ↑ and Income ↓ ⇒ Demand ↓
Inferior Good - ANS-Income ↑ ⇒ Demand ↓ and Income ↓ ⇒ Demand ↑
Compliments - ANS-Price of one ↑ ⇒ Demand for the other ↓
Price of one ↓ ⇒ Demand for the other ↑
