Demand Curve correct answers A graph showing how the demand for a commodity or service varies with a change in price.
Elasticity correct answers The measurement of a variable's sensitivity to a change in another variable. Refers to the degree in which individuals, consumers, or producers change ...
ECON 402 Exam 2 || with 100% Accurate Solutions.
Demand Curve correct answers A graph showing how the demand for a commodity or service
varies with a change in price.
Elasticity correct answers The measurement of a variable's sensitivity to a change in another
variable. Refers to the degree in which individuals, consumers, or producers change their
demand or amount supplied in response to price or income changes.
Total Revenue correct answers The total income of a business -- Calculated by multiplying the
quantity of the goods sold by the price of the goods.
Utility correct answers Term used by economists to measured "usefulness" or the "happiness"
gained by an individual from a certain product.
Budget constraint correct answers When a consumer is limited to their options due to a limited
amount of expendable income.
Marginal utility per dollar correct answers The marginal utility per dollar spent is the marginal
utility obtained from the last unit of a good consumed divided by the price of a good.
Diminishing marginal product correct answers While increasing one input and keeping all other
inputs at the same level, output will initially increase, but further increasing input will eventually
see a lessening effect until there is eventually a negative effect on output.
Cost per unit of output correct answers The cost of each measurable unit of output (Ex. 1 unit
costs $5, etc.)
Fixed and variable inputs correct answers Fixed input: The cost of production that is inevitable
and unchangeable (e.g capital)
Variable inputs: The cost of production that IS changeable, such as labor and other factors)
Perfect competition correct answers A market structure in which the following five criteria are
met: 1) All firms sell an identical product; 2) All firms are price takers - they cannot control the
market price of their product; 3) All firms have a relatively small market share; 4) Buyers have
complete information about the product being sold and the prices charged by each firm; and 5)
The industry is characterized by freedom of entry and exit. Perfect competition is sometimes
referred to as "pure competition"
Entry and Exit correct answers The different barriers and challenges businesses face when
penetrating and leaving markets.
Efficiency correct answers An economic state in which every resource is optimally allocated to
serve each entity while also minimizing waste and inefficiency. When an economy is in a state of
efficiency, any change made to the economic structure to assist one entity would harm another.
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