ECON 200 Lecture Notes - Lecture 1: Midpoint Method, Negative Number, Substitute Good

96 views6 pages

tealalpaca119

13 Dec 2018

School

University of Maryland

Department

Economics

Course

ECON 200

Professor

Robert Schwab

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

Price elasticity of demand: the price elasticity of demand describes the size of the change in the quantity demanded of a good or service when its price changes. It is equal to the percentage change in quantity demanded divided by the percentage in price. Price effect of a price increase: the price effect of a price increase is an increase in total revenue that results from receiving a higher price for each unit sold. Quantity effect of a price increase: the quantity effect of a price increase is a decrease in total revenue that results from selling fewer units of the good. Impact of a price increase on total revenue. Inelastic rises: elastic falls, unit elastic constant. Never positive: more elastic over time for substitutable goods and luxury items, a percentage change is the difference between the starting and ending levels divided by the.

Related Questions

interval (or arc) elasticity

cross-price elasticity

price elasticity of demand

elastic demand

income elasticity

inelastic demand

inframarginal units

marginal revenue

point elasticity

price effect

quantity effect

total revenue

unitary elastic demand

1. __________________ A measure of consumersâ sensitivity or responsiveness to changes in the price of a good or service.

2. ___________________ When the percentage change in price (in absolute value) is more than the percentage change in quantity demanded (in absolute value).

3. ___________________ When the percentage change in quantity demanded (in absolute value) is more than the percentage change in price (in absolute value).

4. ___________________ When the percentage change in quantity demanded (in absolute value) is just equal to the percentage change in price (in absolute value).

5. ___________________ Total amount paid to a producer for a good or service P * Q.

6. ___________________ The effect on total revenue of a change in price, holding quantity constant.

7. ___________________ The effect on total revenue of a change in quantity, holding price constant.

8. ___________________ An elasticity calculated over an interval of a demand curve or demand schedule.

9. ___________________ Elasticity at a specific price or point on a demand curve.

10. ___________________ A measure of how responsive quantity demanded is to a change in income, all other things constant.

11. ___________________ A measure showing how responsive the quantity demanded of one good is to changes in the price of another good, other factors constant.

12. ___________________ The additional revenue received by producing and selling one more unit of output.

13. ___________________ Units of output that could have been sold at a higher price had the firm not lowered its price to sell additional (marginal) units.

coffeehornet269

1. An increase in the price of a good will

a. increase quantity demanded

b. increase demand

c. decrease demand

d. decrease quantity demanded

2. An increase in the price of good will

a. decrease quantity supplied

b. increase quantity supplied

c. decrease supply

d. increase supply

3. An increase in price causes an increase in total revenue when demand is

a. inelastic

b. elastic

c. unit elastic

d. all of the above

4. Which of the following could be the price elasticity of demand for a good for which a price increase would decrease revenue?

a. 1.0

b. 0.6

c. 2.6

d. 0.9

5. Other things equal, when the price of good falls, the

a. quantity supplied of good increases

b. demand increases

c. supply decreases

d. quantity supplied of the good decreases

brownantelope470

1. If a 3 percent increase in price leads to a 5 percent increase in quantity supplied, then

a. Supply is unit elastic

b. Demand is inelastic.

c. Demand is elastic.

d. Supply is elastic.

e. Supply is inelastic.

2. Moving along a demand curve, the quantity demanded decreases 8 percent when price increases 10 percent.

The price elasticity of demand is calculated to be ________.

Given the price elasticity of demand calculated in part a, demand is ________ (elastic, inelastic or unitary elastic) along this portion of the demand curve.

3. Fill in the blanks:

When demand is elastic, the _______ effect dominates the _______ effect.

When demand is inelastic, the _______ effect dominates the _______ effect.

4. Use the following coordinates to answer the following questions.

(2400, $0), (1800, $3), (1000, $7), and (0, $12)

a. Find the arc price elasticity of demand over the price range from $3 to $7. Interpret the value of price elasticity.

ECON 200 Lecture Notes - Lecture 1: Midpoint Method, Negative Number, Substitute Good

Document Summary

Get access

Related Documents

ECON 200 Chapter Notes - Chapter 4: Midpoint Method, Demand Curve, Negative Number

ECON 200 Chapter 5: Chapter 5 notes.docx

ECON 200 Lecture 4: Chapter 4- Elasticity

Related Questions