ECON 2150 EXAM WITH COMPLETE SOLUTIONS 100% VERIFIED
price elasticity of demand - ANSWER The ratio of the percentage change in quantity
demanded of a product or resource to the percentage change in its price; a measure of
the responsiveness of buyers to a change in the price of a product or resource.
unit elasticity - ANSWER The ratio of the percentage change in quantity demanded of a
product or resource to the percentage change in its price; a measure of the
responsiveness of buyers to a change in the price of a product or resource. (=1)
perfect inelasticity - ANSWER price change results in no change whatsoever to
demand
total revenue - ANSWER The ratio of the percentage change in quantity demanded of a
product or resource to the percentage change in its price; a measure of the
responsiveness of buyers to a change in the price of a product or resource. (P x Q)
total revenue test - ANSWER The ratio of the percentage change in quantity demanded
of a product or resource to the percentage change in its price; a measure of the
responsiveness of buyers to a change in the price of a product or resource.
determinants of price elasticity of demand - ANSWER substitutability, proportion of
income, luxuries vs. necessities, time.
Market period - ANSWER A period in which producers of a product are unable to
change the quantity produced in response to a change in its price and in which there is
a perfectly inelastic supply.
Income elasticity of demand - ANSWER The ratio of the percentage change in the
quantity demanded of a good to a percentage change in consumer income; measures
the responsiveness of consumer purchases to income changes.
, inferior goods - ANSWER As income increases, people buy less of these products
normal goods - ANSWER Also superior goods, as income increases, demand for these
items increases.
cross elasticity of demand - ANSWER The ratio of the percentage change in the
quantity demanded of a good to a percentage change in consumer income; measures
the responsiveness of consumer purchases to income changes.
formula that measures the degree of elasticity of demand - ANSWER Ed = percentage
change in quantity demanded of X /percentage change in price of X
differences in economic systems exist because of: - ANSWER who owns the factors of
production, what method is used to motivate, coordinate, direct economic activities
U.S. has ____ ____ economy - ANSWER mostly free
utility - ANSWER pleasure, happiness, or satisfaction
marginal analysis - ANSWER comparisons of marginal (additional) benefits and
marginal costs
scientific method - ANSWER economics relies on the ____ ____ to make principles
Generalizations - ANSWER principles are based on ______ of human behavior
other-things-equal assumption - ANSWER all variables except those under immediate
consideration are held constant for a particular analysis (ceteris paribus)
graphical - ANSWER A principle of economics is often represented in a ____ expression
price elasticity of demand - ANSWER The ratio of the percentage change in quantity
demanded of a product or resource to the percentage change in its price; a measure of
the responsiveness of buyers to a change in the price of a product or resource.
unit elasticity - ANSWER The ratio of the percentage change in quantity demanded of a
product or resource to the percentage change in its price; a measure of the
responsiveness of buyers to a change in the price of a product or resource. (=1)
perfect inelasticity - ANSWER price change results in no change whatsoever to
demand
total revenue - ANSWER The ratio of the percentage change in quantity demanded of a
product or resource to the percentage change in its price; a measure of the
responsiveness of buyers to a change in the price of a product or resource. (P x Q)
total revenue test - ANSWER The ratio of the percentage change in quantity demanded
of a product or resource to the percentage change in its price; a measure of the
responsiveness of buyers to a change in the price of a product or resource.
determinants of price elasticity of demand - ANSWER substitutability, proportion of
income, luxuries vs. necessities, time.
Market period - ANSWER A period in which producers of a product are unable to
change the quantity produced in response to a change in its price and in which there is
a perfectly inelastic supply.
Income elasticity of demand - ANSWER The ratio of the percentage change in the
quantity demanded of a good to a percentage change in consumer income; measures
the responsiveness of consumer purchases to income changes.
, inferior goods - ANSWER As income increases, people buy less of these products
normal goods - ANSWER Also superior goods, as income increases, demand for these
items increases.
cross elasticity of demand - ANSWER The ratio of the percentage change in the
quantity demanded of a good to a percentage change in consumer income; measures
the responsiveness of consumer purchases to income changes.
formula that measures the degree of elasticity of demand - ANSWER Ed = percentage
change in quantity demanded of X /percentage change in price of X
differences in economic systems exist because of: - ANSWER who owns the factors of
production, what method is used to motivate, coordinate, direct economic activities
U.S. has ____ ____ economy - ANSWER mostly free
utility - ANSWER pleasure, happiness, or satisfaction
marginal analysis - ANSWER comparisons of marginal (additional) benefits and
marginal costs
scientific method - ANSWER economics relies on the ____ ____ to make principles
Generalizations - ANSWER principles are based on ______ of human behavior
other-things-equal assumption - ANSWER all variables except those under immediate
consideration are held constant for a particular analysis (ceteris paribus)
graphical - ANSWER A principle of economics is often represented in a ____ expression
