Econ130 test 2 (exam) || with Accurate Answers 100%.
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Course
Econ130
Institution
Econ130
As _____ go up, ________ _______ goes down or ________ ________ goes up correct answers prices, quantity demanded, quantity supplied
As prices go up, _______ ________ goes down correct answers quantity demanded
As prices go up, ________ ________ goes up correct answers quantity supplied
El...
Econ130 test 2 (exam) || with Accurate Answers 100%.
As _____ go up, ________ _______ goes down or ________ ________ goes up correct answers
prices, quantity demanded, quantity supplied
As prices go up, _______ ________ goes down correct answers quantity demanded
As prices go up, ________ ________ goes up correct answers quantity supplied
Elasticity correct answers by how much does quantity demanded/supplied change in response to
a price change
Price Elasticity of Demand correct answers percent change in quantity demanded divided by
percent change in price(how much demand responds to price)
Elastic correct answers change in quantity > change in price (greater than 1)
Unitary correct answers change in quantity = change in price (equal to 1)
Inelastic correct answers change in quantity < change in price (less than 1)
Examples of Inelastic Demand correct answers life saving drugs (goods with no substitutes)
Examples of Inelastic Supply correct answers diamond rings, natural resources (goods with
fixed/limited input)
Law of Diminishing Marginal Utility correct answers Marginal utility (of a good) diminishes as
additional units are consumed; each subsequent unit of a good consumed provides less additional
utility
Law of Diminishing Marginal Utility ________ at a __________ rate correct answers increases,
decreasing
Methods for Maximizing Utility correct answers Compute total utility for each bundle Equalize
marginal utility per dollar
Substitution Effect correct answers If there is a price change, consumers will buy more of the
cheaper good
Income Effect correct answers If price increases, we consume more inferior goods and less
normal goods
Wage Increase with Full-Time Workers correct answers Work same amount, leisure same
amount
Wage Increase with Younger Workers correct answers Work more, leisure less
Wage Increase with Old People correct answers Work less, more leisure
Firm correct answers any entity that combines inputs to make outputs
Perfect Competition correct answers Many firms, identical products
Monopolistic Competition correct answers Many firms, similar but not identical products
Oligopoly correct answers Few firms, identical or similar products
Monopoly correct answers One firm, no similar products
What is the goal of the firm? correct answers maximize profit
What does profit equal to? correct answers Total Revenue - Total Cost(P x Q - Average Cost x
Q)
Total Revenue correct answers Price x Quantity
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