Econ 202 Exam 2 Ole Miss Ms. Carlisle Test with Answers Rated A
a measure of how much the quantity demanded of a good
price elasticity of demand responds to a change in the price of that good. Computed
as (% change in quantity demanded/% change in price)
an increase or decrease in price leaves total revenue un-
unit elasticity
changed
Would the price elasticity coeflcient of a product that has
The price elasticity would be low with a high % of demand
successful advertising and local buyers be high or low
When the price of gasoline increases, what cost curve is
Total variable cost (TVC) and total cost (TC).
attected for delivery companies
A change in price will have no ettect on quantity supplied.
A supply curve with a vertical straight line indicates what
(slope is 0)
When total product is at its maximum level, the marginal
lowest.
product is at its
as a person increases consumption of a product while
keeping consumption of other products constant, there is
The law of diminishing marginal utility
a decline in the marginal utility that person derives from
consuming each additional unit of that product.
A period of time too short to change plant capacity but
The basic characteristic of the short run is long enough to use the fixed sized plant more or less
intensively.
other things equal, the quantity supplied of a good rises
Law of Supply
when the price of the good rises
The law of supply suggests that the price-elasticity of
inelastic.
supply is
as a consumer increases the consumption of a good or
marginal utility service, the marginal utility obtained from each additional
unit of the good or service decreases.
1/7
, Econ 202 Exam 2 Ole Miss Ms. Carlisle Test with Answers Rated A
people make decisions about a current situation based on
sunk cost fallacy
what they have previously invested in the situation
When total utility is at a maximum, marginal utility is at zero
Identify price elasticity of a product whose demand is a High price-range = elastic
small portion of one's income Low price-range = inelastic
the change in the quantity demanded of a good that
Income ettect results from the ettect of a change in real income (pur-
chasing power) caused by a change in the product's price.
the change in the quantity demanded of a good that
substitution ettect results from a change in price, making the good more or
less expensive relative to other goods that are substitutes
the principal establishing that price alone does not deter-
mine demand.
Deminishing marginal utility
explains why demand curves are downsloping
What do income ettect, substitution ettect and diminish-
they all help explain the downward sloping demand curve
ing marginal utility have in common?
What do wages paid to factory workers, interest paid
on a bank loan, forgone interest, and the purchase of all are opportunity costs
component parts have in common
all possible combinations of two goods that can be pur-
The budget line shows:
chased, given money income and the prices of the goods.
the amount by which production costs change as the firm's
marginal cost of production
quantity of output is increased by a unit
The marginal cost of production measures the change in
If the price of a fixed factor of production increases by 50
total cost with respect to a change in production levels
percent, what ettect would this have on the marginal-cost
and fixed costs do not change with production levels.
schedule facing a firm
Therefore, it will have no ettect on marginal cost.
price elasticity of supply
2/7
a measure of how much the quantity demanded of a good
price elasticity of demand responds to a change in the price of that good. Computed
as (% change in quantity demanded/% change in price)
an increase or decrease in price leaves total revenue un-
unit elasticity
changed
Would the price elasticity coeflcient of a product that has
The price elasticity would be low with a high % of demand
successful advertising and local buyers be high or low
When the price of gasoline increases, what cost curve is
Total variable cost (TVC) and total cost (TC).
attected for delivery companies
A change in price will have no ettect on quantity supplied.
A supply curve with a vertical straight line indicates what
(slope is 0)
When total product is at its maximum level, the marginal
lowest.
product is at its
as a person increases consumption of a product while
keeping consumption of other products constant, there is
The law of diminishing marginal utility
a decline in the marginal utility that person derives from
consuming each additional unit of that product.
A period of time too short to change plant capacity but
The basic characteristic of the short run is long enough to use the fixed sized plant more or less
intensively.
other things equal, the quantity supplied of a good rises
Law of Supply
when the price of the good rises
The law of supply suggests that the price-elasticity of
inelastic.
supply is
as a consumer increases the consumption of a good or
marginal utility service, the marginal utility obtained from each additional
unit of the good or service decreases.
1/7
, Econ 202 Exam 2 Ole Miss Ms. Carlisle Test with Answers Rated A
people make decisions about a current situation based on
sunk cost fallacy
what they have previously invested in the situation
When total utility is at a maximum, marginal utility is at zero
Identify price elasticity of a product whose demand is a High price-range = elastic
small portion of one's income Low price-range = inelastic
the change in the quantity demanded of a good that
Income ettect results from the ettect of a change in real income (pur-
chasing power) caused by a change in the product's price.
the change in the quantity demanded of a good that
substitution ettect results from a change in price, making the good more or
less expensive relative to other goods that are substitutes
the principal establishing that price alone does not deter-
mine demand.
Deminishing marginal utility
explains why demand curves are downsloping
What do income ettect, substitution ettect and diminish-
they all help explain the downward sloping demand curve
ing marginal utility have in common?
What do wages paid to factory workers, interest paid
on a bank loan, forgone interest, and the purchase of all are opportunity costs
component parts have in common
all possible combinations of two goods that can be pur-
The budget line shows:
chased, given money income and the prices of the goods.
the amount by which production costs change as the firm's
marginal cost of production
quantity of output is increased by a unit
The marginal cost of production measures the change in
If the price of a fixed factor of production increases by 50
total cost with respect to a change in production levels
percent, what ettect would this have on the marginal-cost
and fixed costs do not change with production levels.
schedule facing a firm
Therefore, it will have no ettect on marginal cost.
price elasticity of supply
2/7
