# Shared Flashcard Set

## Details

Ag Ec 515
Exam 2
8
Agriculture
04/14/2010

Term
 Engles Law
Definition
 As income goes up, budget spent on food goes down
Term
 Total Revenue (TR) Average Revenue (AR) Marginal Revenue (MR) Demand Elasticities
Definition
 (TR) - P*Q   (AR) - P = TR/ Q   (MR) - AR @ twice the slope   Demand Elacticities = €p is (price).. €inc is (INC) a 1% change in price results in a ____ % change in QD in the ______ dirrection
Term
 Law of Market demand
Definition
 - market boundary between 2 or more suppliers are determined by area of: - procuct cost + transportation costs.. they MUST BE EQUAL - competition goes up, market power goes down
Term
 Why Estimate a Demand curve?
Definition
 - determine elasticities - predict future demand prices - better understand different componets - to aid in marketing decisions
Term
 Correlation
Definition
 - correlation R is bound between -1 and +1 and tells how negative or positive they are:   - if # is closer to +1, this is STRONGER - if # is closer to -1, this is WEAKER        .90 is stronger than .89 and <
Term
 Product Differentation
Definition
 - marketing can be thought of as means by which one firm differentiates its product to service from that of its competeator - by differentiating the firm has some markey power. they are able to have more control over prices and what they charge. - a firm seeking this, wants and own price elasticity smaller than infinity and a x-price close to 0
Term
 R2 in a regression
Definition
 - if the r2 is .714, this means that 71% of cariation in Q could be explained in the regression output
Term
 Standard Error
Definition
 based on t-stat:   < 2 = significantly different than 0 > 2 = not signigicantly different than 0
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