Makeath 2

refer to the diagram to the right. what is value of the price elasticity of supply between g and h? use the midpoint formula

2

refer to the diagram on the right. using the. midpoint formula, calculate the absolute value of the price elasticity of demand between e and f

3.125

suppose the value of the price elasticity of demand is -3. what does that mean?

a 1 percent increase in the price of the good causes quantity demanded to decrease by 3 percent

suppose the value of the price elasticity of supply is 4. what does this mean

a 1 percent increase in the price of the good causes quantity supplied to increase by 4 percent

a characteristic of the long run is

all inputs can be varied

income elasticity measures how a goods quantity demanded responds to

change in buyers incomes

if the cross - price elasticity of demand for goods X and Y is negative, this means the two goods are

complements

when a firms long - run average cost curve is horizontal range for of output, then in that range production displays

constant returns to scale

economic cost of production differ from accounting costs in that

economic cost adds the opportunity cost of a firm using its own resources while accounting cost does not

price elasticity of demand measures

how responsive quantity demanded is to a change in price

if the demand is inelastic, the absolute value of the price elasticity of demand is

less than one

the larger the share of a good in a consumers budget, holding everything else constant, the

more price elastic is a consumers demand

the price elasticity of an upward - sloping supply curve is always

postitive

total revenue equals

price per unit times quantity sold

when there few close substitutes available for a good, demand tends to be

relatively inelastic

the difference between technology and technical change is that

technology refers to the processes used by a firm to transform inputs into output while technological change is a change in a firms ability to produce a given level of output with a given quantity of inputs

when demand is price elastic, a fall in price causes total revenue to rise because

the increase in quantity sold is large enough to offset the lower price

when demanded is unit elastic, a change in price causes total revenue to stay the same because

the percentage changes in quantity demanded exactly offsets the percentage change in price

if the cross - price elasticity of demand between Breeze Detergent and Faber Detergent is a relatively large positive number, then it indicates that

the two brands of detergent are close substitutes

if production displays diseconomies of scale, the long - run average cost curve is

upward sloping