Econ Exam

Multiply the individual supply of one of the suppliers by 10.

A market consists of ten similar suppliers that are making the same supply decisions. To find the market supply of these 10 suppliers, you:

Equal to

According to the marginal principle, keep increasing quantity until the marginal benefit of an additional item is ______ the marginal cost of an additional item.

Opportunity; Financial

Decisions should reflect the _________ costs, rather than just the ________ costs.

Relatively Steep

If an item is a necessity rather than a luxury, its demand curve will be:

higher

If demand is inelastic, a higher price yields ________ total revenue.

Mary has an inelastic demand for avocados

Mary loves avocados and must consume avocados every week, regardless of the price

At a price below the value of the benefit they receive from the item

People gain consumer surplus when they purchase an item:

Marginal Benefit

The benefit experienced from undertaking one more unit of an activity.

Marginal Cost

The cost of producing one more unit of a good or service.

Costs and Benefits

The cost-benefit principle states that _________ are the incentives that shape decisions.

Demand for one good is to a change in the price of another good.

The cross-price elasticity of demand measures how responsive the:

Both Financial and Nonfinancial

The key to using the cost benefit principle is to think about __________ aspects of a decision.

Decreases

The law of diminishing marginal utility means that as a person receives more of a good, the added utility from each additional unit.

The economic surplus

The marginal benefit minus the marginal cost equals

Consumers view gasoline from different gas stations as perfect substitutes.

The most likely reason two gas stations sell gas at the same price is:

Potential income that could be earned working

The opportunity costs of attending college include the:

Interdependence

The principle that your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future is known as the ___________ principle.

Price minus marginal cost

The producer surplus on a unit sold equals:

Utility is the measure of

The relative satisfaction, enjoyment, or contentment a person receives from consuming a good or service.

Constant Marginal Cost

The situation where an additional unit of a good or service costs the same as each of the former units.

The amount of an item that a seller is willing to sell at a particular price.

What is quantity supplied?

The cost-benefit principle

Which principle helps buyers and sellers make decisions about whether to trade?

The Opportunity Cost Principle

Which principle tells you that the true cost of something is the next best alternative you have to give up to get it?

Increasing Marginal Cost

A situation where the. expense of producing one more unit of a good or service is greater than that of producing the previous unit.

The economic surplus at the efficient quantity minus the economic surplus at the actual quantity.

A market's deadweight loss is calculated as:

The quantity supplied equals the quantity demanded.

An equilibrium in a market occurs when:

More elastic

As time passes, people adjust to the higher price, and the demand of gasoline becomes:

Benefit of purchasing one more coffee equals the marginal cost.

Joshua should keep buying coffee throughout the evening until the marginal:

Remove the ability to tell whether the product is an inferior good or a normal good

Taking the absolute value of the income elasticity of demand is incorrect because it would.

Greater than or equal to the marginal cost.

The Rational Rule for Sellers says that a seller should sell one more unit of an item if the price is:

Marginal Principle

The __________ suggests, decisions about quantities are best made incrementally.