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ECON 103 Lecture Notes - Lecture 8: Bookmobile, Demand Curve, The 2Nd Law

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carmineworm32
13 Dec 2017
School
Simon Fraser University
Department
Economics
Course
ECON 103
Professor
Douglas Allen

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Document Summary

Total revenue 0 9 16 21 24 25 24 21 16 9. Elastsity: inf -9 -4 -2. 3 -1. 5 -1 -0. 67 -3/7 -0. 25 -1/9. Other elasticities: cross price elasticity- the percentage change in the quantity demanded of x divided by the percentage hange in the price good y. Exy takes on the value of any real number. If exy > 0 then the goods are substitutes. If exy < 0 the goods are complements. Income elasticty - the percentage change in the quanity ddemanded of x divided by the percentage change in income. Income elasticities can also take on any real number. If exm > 0 then the goods are normal. If exm < 0 the goods are inferior. For a theoretical point of view , exy and exm are not that interesting. Vanity plates (own plate) exx ~ -1. 3, exm ~ 0. 6. Elastic because theres a common subsitute (a normal plate) Abortions exx ~ -1, exm ~ 0. 5.

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Related Questions

1. Price elasticity of demand is calculated as:


a. the percentage change in quantity demanded divided by the percentage change in price
b. the percentage change in price divided by the percentage change in quantity demanded
c. the absolute change in quantity demanded divided by the absolute change in price.
d. the absolute change in price divided by the absolute change in quantity demanded


2. The price elasticity of demand:


a. is of no use to producers
b. tells producers what will happen to total profit if they change product price
c. tells producers what will happen to quantity supplied if they change product priced.
d. tells producers what will happen to total revenue if they change the product price


3. Along a linear demand curve,


a. both the slope and price elasticity are constant
b. the price elasticity is constant, but the slope varies
c. total revenues are constant
d. the slope is constant, but the price elasticity varies


4. Demand is more elastic:


a. in the short run than in the long run
b. for necessities than for luxuries
c. for food than for hamburgers
d. for goods with many substitutes than for goods with only a few


5. Demand for a necessity, such as food, is:


a. both income and price inelastic
b. income inelastic and price elastic
c. income elastic and price inelastic
d. both income and price elastic


6. The reason economists assume that firms try to maximize economic profit is:


a. over time, firms that don't earn profits will have difficulty securing financing to survive
b. firms in the real world always maximize profit
c. profit is easier to calculate than revenues
d. if a firm fails to earn a profit in its first year, it will go out of business


7. Which of the following is a short-run adjustment?


a. Toyota builds an automobile plant in Kentucky.
b. Faced with increasing enrollment, a private college builds a new school of Business building.
c. Because of staggering losses, three insurance companies exit the industry.
d. People's Bank hires two new tellers to meet the increased demand for customer services.


8. At the point where diminishing marginal returns set in, the slope of the total product curve is:


a. positive and increasing
b. positive and decreasing
c. negative and increasing
d. negative and decreasing


9. Which of the following correctly describes the relationship between the marginal cost and average variable cost curves?:


a. MC is everywhere above AVC
b. AVC is everywhere above MC
c. MC crosses AVC at AVC's minimum point
d. MC crosses AVC at MC's minimum point


10. The shape of the long-run average cost curve reflects
a. market demand
b. economies and diseconomies of scale
c. increasing and diminishing marginal returns
d. the productivity of fixed inputs


Question 16

  1. If price is cut and demand is elastic, total revenue will rise because

    the change in quantity demanded is greater than the percent change in price.

    the percent change in quantity demanded is greater than the change in price.

    the percent change in quantity demanded is greater than the percent change in price.

    customers can't find substitutes.

3 points

Question 17

  1. If price is cut and demand is inelastic, total revenue will fall because

    the change in quantity demanded is less than the percent change in price.

    the percent change in quantity demanded is less than the change in price.

    the percent change in quantity demanded is less than the percent change in price.

    customers can find substitutes.

3 points

Question 18

  1. If something is addictive, then

    price and demand are inversely related.

    price elasticity of demand is equal to one.

    demand is perfectly inelastic.

    demand is perfectly elastic.

3 points

Question 19

  1. In general, elasticities measure

    the change in quantity demanded when a product attribute changes.

    the change in consumer spending when income changes.

    the change in an attribute for a percentage change in price.

    the percentage change in the quantity demanded resulting from a fixed percentage change in some attribute.

3 points

Question 20

  1. Average total costs are defined as

    total costs divided by the change in output.

    total costs divided by output.

    the change in total costs when output changes.

    average variable costs plus marginal costs.

3 points

Question 21

  1. If a firm is experiencing economies of scale, then the long-run average cost curve is

    falling.

    rising.

    horizontal.

    shifting.

3 points

Question 22

  1. If average total cost is rising

    marginal cost is above average total cost.

    marginal cost is rising.

    marginal product is rising.

    marginal cost is above average total cost and is falling.

3 points

Question 23

  1. The period of time over which all inputs are variable is the

    market horizon.

    short run.

    calendar year.

    long run.

3 points

Question 24

  1. The supply chain refers to

    the supply curve.

    the process of outsourcing.

    the process of downsizing.

    the process of creating and selling a product.

3 points

Question 25

  1. When the capital (a fixed input) changes

    short-run marginal costs rise.

    short-run average total costs fall but do not shift.

    labor inputs decline.

    the short-run average total cost curve shifts.

3 points

Question 26

  1. A market of price takers is called

    perfectly competitive.

    monopolistically competitive.

    a monopoly.

    an oligopoly.

3 points

Question 27

  1. A market with a single seller is called

    perfectly competitive.

    monopolistically competitive.

    a monopoly.

    an oligopoly.

3 points

Question 28

  1. A market that mainly stresses product differentiation is called

    perfectly competitive.

    monopolistically competitive.

    a monopoly.

    an oligopoly.

3 points

Question 29

  1. Entry into a competitive market will continue until

    economic profits are zero.

    normal profits are zero.

    when accounting losses are zero.

    a. and b. are true

3 points

Question 30

  1. Firms in an oligopoly

    act independently.

    engage in strategic behavior.

    have perfect knowledge of the behavior of others.

    openly collude.

1. Managerial economics can best be defined as the:

Select one:

a. macroeconomics and microeconomics for managers.

b. analysis of the labor market through the behavior of workers and managers.

c. analysis of major management decisions using economic tools.

d. study of economic incentives on consumer behavior and demand.

e. study of the strategic interaction between firms in a market.

2. The price elasticity of demand is defined as the ratio of the _____ other factors held constant.

Select one:

a. change in the price of a good to the change in the total revenue

b. percentage change in quantity demanded to the percentage change in the price of a competitor’s good

c. percentage change in quantity demanded to the percentage change in price

d. percentage change in the price of an input to the percentage change in the price of the good

e. percentage change in price of the good to the percentage change in the consumers’ income

3. According to the law of demand, if a firm reduces the price of its good:

Select one:

a. the quantity of goods produced and sold by the firm will decline.

b. competing firms will reduce prices.

c. some consumers will exit the market.

d. consumers in the market will demand more units of the good.

e. consumers will demand fewer units than before the price cut.

4. Other factors constant, a change in _____ will cause a shift in a firm's demand curve.

Select one:

a. the quantity of the good offered for sale

b. the price of the good or service

c. the wages paid to labor employed

d. the general income level of consumers

e. the technology used in the production of the good or service