UTS Economics for Business Exam
ACTUAL QUESTIONS AND CORRECT
ANSWERS
price elasticity of demand - CORRECT ANSWERS✅✅the percentage change in quantity
demanded relative to a percentage change in price
total revenue - CORRECT ANSWERS✅✅Price x Quantity
income elasticity of demand - CORRECT ANSWERS✅✅the percent change in the quantity
of a good demanded when a consumer's income changes divided by the percent change in the
consumer's income
cross-price elasticity of demand - CORRECT ANSWERS✅✅the percentage change in the
quantity demanded of one good divided by the percentage change in the price of another
good
price elasticity of supply - CORRECT ANSWERS✅✅the percentage change in quantity
supplied divided by the percentage change in price
midpoint formula - CORRECT ANSWERS✅✅(Q2-Q1)/[(Q2+Q1)/2] / (P2-P1)/[(P2+P1)/2]
total surplus - CORRECT ANSWERS✅✅consumer surplus + producer surplus
producer surplus - CORRECT ANSWERS✅✅the difference between the lowest price a firm
would be willing to accept for a good or service and the price it actually receives
consumer surplus - CORRECT ANSWERS✅✅the difference between the highest price a
consumer is willing to pay for a good or service and the actual price the consumer pays
GDP - CORRECT ANSWERS✅✅the total market value of all final goods and services
produced annually in an economy
, GDP formula - CORRECT ANSWERS✅✅C+I+G+(X-M)
net exports - CORRECT ANSWERS✅✅exports - imports
GDP deflator - CORRECT ANSWERS✅✅a measure of the price level calculated as the
ratio of nominal GDP to real GDP times 100
GDP deflator formula - CORRECT ANSWERS✅✅Nominal GDP/Real GDP x 100
inflation rate - CORRECT ANSWERS✅✅the percentage increase in the price level from
one year to the next
Inflation Rate Formula - CORRECT ANSWERS✅✅(Price index in year 2 - price index in
year 1)/(Price index in year 1) x 100
convert previous year $ to current year $ - CORRECT ANSWERS✅✅original $ * (current
year index/original year index)
real interest rate formula - CORRECT ANSWERS✅✅nominal interest rate - inflation rate
nominal interest rate - CORRECT ANSWERS✅✅real interest rate + inflation rate
Consumer Price Index (CPI) - CORRECT ANSWERS✅✅a measure of the overall cost of
the goods and services bought by a typical consumer
consumer price index formula - CORRECT ANSWERS✅✅(Price of basket of goods and
services in current year/price of basket in base year) x 100
Labour force formula - CORRECT ANSWERS✅✅employed + unemployed
ACTUAL QUESTIONS AND CORRECT
ANSWERS
price elasticity of demand - CORRECT ANSWERS✅✅the percentage change in quantity
demanded relative to a percentage change in price
total revenue - CORRECT ANSWERS✅✅Price x Quantity
income elasticity of demand - CORRECT ANSWERS✅✅the percent change in the quantity
of a good demanded when a consumer's income changes divided by the percent change in the
consumer's income
cross-price elasticity of demand - CORRECT ANSWERS✅✅the percentage change in the
quantity demanded of one good divided by the percentage change in the price of another
good
price elasticity of supply - CORRECT ANSWERS✅✅the percentage change in quantity
supplied divided by the percentage change in price
midpoint formula - CORRECT ANSWERS✅✅(Q2-Q1)/[(Q2+Q1)/2] / (P2-P1)/[(P2+P1)/2]
total surplus - CORRECT ANSWERS✅✅consumer surplus + producer surplus
producer surplus - CORRECT ANSWERS✅✅the difference between the lowest price a firm
would be willing to accept for a good or service and the price it actually receives
consumer surplus - CORRECT ANSWERS✅✅the difference between the highest price a
consumer is willing to pay for a good or service and the actual price the consumer pays
GDP - CORRECT ANSWERS✅✅the total market value of all final goods and services
produced annually in an economy
, GDP formula - CORRECT ANSWERS✅✅C+I+G+(X-M)
net exports - CORRECT ANSWERS✅✅exports - imports
GDP deflator - CORRECT ANSWERS✅✅a measure of the price level calculated as the
ratio of nominal GDP to real GDP times 100
GDP deflator formula - CORRECT ANSWERS✅✅Nominal GDP/Real GDP x 100
inflation rate - CORRECT ANSWERS✅✅the percentage increase in the price level from
one year to the next
Inflation Rate Formula - CORRECT ANSWERS✅✅(Price index in year 2 - price index in
year 1)/(Price index in year 1) x 100
convert previous year $ to current year $ - CORRECT ANSWERS✅✅original $ * (current
year index/original year index)
real interest rate formula - CORRECT ANSWERS✅✅nominal interest rate - inflation rate
nominal interest rate - CORRECT ANSWERS✅✅real interest rate + inflation rate
Consumer Price Index (CPI) - CORRECT ANSWERS✅✅a measure of the overall cost of
the goods and services bought by a typical consumer
consumer price index formula - CORRECT ANSWERS✅✅(Price of basket of goods and
services in current year/price of basket in base year) x 100
Labour force formula - CORRECT ANSWERS✅✅employed + unemployed
