Term
| What was the test average? |
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Definition
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Term
| What was the highest test average? |
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Definition
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Term
| Income and substitution effect explain why what? |
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Definition
| Product demand curves are down sloping |
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Term
| What is an example of capital as a factor of production? |
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Definition
| An automobile factory owned by Ford Motor Company |
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Term
| What does the law of demand state? |
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Definition
| Other things equal, the higher the price of a good, the lower is the quantity demanded. |
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Term
| If both supply of and demand for a good decreased, it could be predicted that what? |
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Definition
| Equilibrium quantity decreases regardless, and price is ambiguous. |
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Term
| Why are supply curves upward sloping? |
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Definition
| Sellers are motivated by a desire to cover costs and earn a profit. |
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Term
| What if demand is unit elastic, what is total revenue? |
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Definition
| Remains constant as price rises or falls. |
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Term
| What does a change in the demand for a product refer to? |
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Definition
| A shift of the product's demand curve right or left. |
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Term
| What factors are held constant along a given demand curve for a good? |
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Definition
| Consumer incomes and the prices of other goods. |
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Term
| Equilibrium price will increase when what? |
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Definition
| Supply Decreases and Demand Increases |
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Term
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Definition
| With other conditions remaining the same. |
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Term
| What did a classic study of Philadelphia mass transit reveal? |
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Definition
| The demand for mass transit was more elastic in the long run than in the short run. |
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Term
| How do you calculate a shortage that has been provided to you in units? |
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Definition
| Subtract the Demand Function from the Supply Function Set Equal to Number of Units that make up the shortage |
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Term
| How do you calculate a surplus that has been provided to you in units? |
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Definition
| Subtract the Supply Function from the Demand Function Set Equal to Number of Units that make up the surplus |
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Term
| When given a supply function and demand function, how do you calculate equilibrium price? |
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Definition
| Set the supply function equal to the demand function and solve for "P". |
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Term
| If you know the equilibrium price, how do you solve for equilibrium quantity? |
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Definition
| Plug the equilibrium price in for "P" in either the supply or demand function. |
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Term
| How do you calculate Economic Profit? |
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Definition
| Total Revenue minus Total Cost |
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Term
| How do you calculate Total Revenue? |
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Definition
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Term
| Price is not a shifter of what? |
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Definition
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Term
| What are big tips for tests? |
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Definition
1.)Show your work
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2.)Finish the thought of a question
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3.)Answer quickly and with confidence
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Term
| What are topics covered by Homework Set 2? |
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Definition
Using Midpoint Formula to Calculate Price Elasticity of Demand
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Calculate Market Equilibrium Price and Quantity
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Calculate Price Elasticity of Demand at Equilibrium using the algebraic formula
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How to illustrate demand elasticity at different prices using the algebraic formula
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Term
| What if Cross Price Elasticity of Demand is greater than zero? |
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Definition
The Percentage Change of Quantity Demanded of Good A has a direct relationship with the Percentage Change of Price of Good B.
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Indicating these goods are Substitutes. |
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Term
| How do you Calculate Cross Price Elasticity of Demand? |
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Definition
| (Percentage Change of Quantity Demanded of Good A)/(Percentage Change in Price of Good B) |
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Term
| What if Cross Price Elasticity of Demand is less than zero? |
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Definition
The Percentage Change of Quantity Demanded of Good A has an inverse relationship with the Percentage Change of Price of Good B.
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Indicating these goods are complementary. |
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Term
| How do you calculate the income elasticity of demand? |
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Definition
The Percentage Change of Quantity Demanded of Good A Divided By the Percentage Change in Income
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Term
| What does it mean when Income Elasticity of Demand is greater than zero? |
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Definition
The Percentage Change of Quantity Demanded of Good "A" Has a Direct Relationship with Percentage Change in Income
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It means that the good, is a normal good. |
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Term
| What does it mean when Income Elasticity of Demand is less than zero? |
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Definition
The Percentage Change of Quantity Demanded of Good "A" Has an Inverse Relationship with Percentage Change in Income
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It means that the good, is an inferior good. |
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Term
| What is Elasticity always? |
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Definition
A percentage change in something divided by the percentage change of something else.
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Term
| What is Price Elasticity of Supply? |
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Definition
| A measure of producer responsiveness to price changes. |
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Term
| How do you calculate Price Elasticity of Supply? |
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Definition
| Percentage Change in Quantity Supplied Divided by Percentage Change in Price |
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Term
| What is the one determinant for price elasticity of supply? |
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Definition
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Term
| What is longer than a market period? |
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Definition
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Term
| What is longer than a short run? |
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Definition
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Term
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Definition
| A time so short, that producers cannot respond to changes in price. |
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Term
| How is time kept in Economics? |
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Definition
| The variability of inputs. |
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Term
| What does elasticity of supply imply during the Market Period? |
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Definition
The supply curve is an unchanging vertical line.
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Perfectly Inelastic
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Term
| Equilibrium quantity cannot change if supply cannot what? |
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Definition
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Term
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Definition
A time-frame in which the inputs of some but not all productive resources may be varied.
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It is a normal upward sloping supply curve.
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Term
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Definition
A time frame when all resources may be varied and producers can respond infinitely to changes in demand.
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Term
| What is the Supply Curve implied to be like in the Long Run? |
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Definition
Horizontal aka Completely Elastic
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