ECON-UB 1 Midterm: Midterm Formulas to Remember

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22 Oct 2017

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Occurs when mrs is equal to price ratio. Budget line: =(cid:1842)(cid:3025)(cid:1850)+(cid:1842)(cid:3026)(cid:1851) (cid:1839)(cid:1847)(cid:1839)(cid:1847)(cid:3026)=(cid:1842)(cid:3025)(cid:1842)(cid:3026) (cid:1870) (cid:1839)(cid:1847)(cid:1842)(cid:3025) =(cid:1839)(cid:1847)(cid:3026)(cid:1842)(cid:3026) (cid:1839)(cid:1842)(cid:3013)= (cid:1843) (cid:1838) (cid:1839)(cid:1842)(cid:3012)= (cid:1843) (cid:1837) Occurs when the mrts is equal to price ratio. Additional output produced with an additional unit of labor. Additional output produced with an additional unit of capital. Marginal rate of substitution: the amount of one good a consumer is willing to five up to obtain more of another good. Marginal rate of substitution of x for y = the amount of y the consumer is willing to give up for an additional unit of x. =(cid:1839)(cid:1844)(cid:1845) (cid:1839)(cid:1844)(cid:1845)= (cid:1851) (cid:1850)=(cid:1847)(cid:1851)(cid:1847)(cid:1850)=(cid:1850)(cid:1851)=(cid:1839)(cid:1847)(cid:1839)(cid:1847)(cid:3026) (cid:1831)=% (cid:1843)% (cid:1842)= (cid:1843)/(cid:1843) (cid:1842)/(cid:1842) (cid:1870) (cid:1843) (cid:1842) (cid:1842)(cid:1843) elasticity, (cid:3018) (cid:3017) is the slope of the line. (cid:1831)=% (cid:1843)% = (cid:1843)/(cid:1843) (cid:1842)/(cid:1842)(cid:1870) (cid:1843) (cid:1843) (cid:1839)(cid:1844)(cid:1846)(cid:1845)= (cid:3012) (cid:3013)= (cid:3260)(cid:3261)=(cid:3014)(cid:3017)(cid:3261)(cid:3014)(cid:3017)(cid:3260) (cid:1846)=(cid:1832)+(cid:1848) (cid:1846)=(cid:1832)+(cid:1848) (cid:1846)=(cid:1846)(cid:1832)(cid:1843) +(cid:1846)(cid:1848) (cid:1839)= (cid:1846) (cid:1843) = (cid:1848) (cid:1843)+ (cid:1832) (cid:1843) (cid:1844)=(cid:1842) (cid:1843) Percentage changed in the cost of production resulting from a 1 percent increase in output.

Related Questions

Suppose all consumers are maximizing utility with convex indifference curves. All face the same prices, and are perfectly rational. According to microeconomic models, at the maximization bundle they should

A. All have the same marginal rate of substitution

B. All buy more of the least expensive good

C. All end up with the same bundle of goods

D. All have the same level of satisfaction

Consider an indifference map with food on the vertical axis and shelter on the horizontal axis.

If a consumer is willing to give up 3 units of food in exchange for 1 unit of shelter and food is priced at $5 per unit and shelter at $10 per unit, then the consumer is:

A. Purchasing too much food for utility maximization

B. Purchasing too much shelter for utility maximization

C. Purchasing just the right amount of each good for utility maximization

D. Purchasing less than the budget would allow

If a consumer with convex indifference curves moves along her budget line, closer and closer to the horizontal axis, as she is moving:

		A. The marginal utility she gets from good Y declines.
		B. The marginal utility she gets from good X declines.
		C. The marginal utility she gets from good X increases.
		D. The price ratio of the two goods changes.

23) Good X is measured on the horizontal axis and good Y is measured on the vertical axis. The marginal rate of substitution is A) the relative price of good X in terms of good Y. B) the relative price of good Y in terms of good X. C) the rate at which a consumer will give up good Y to obtain an additional unit of good X while remaining indifferent. D) the rate at which a consumer will give up good X to obtain an additional unit of good Y while remaining indifferent. E) equal to the magnitude of the slope of the budget line.

177. If a consumer moves upward along an indifference curve, his orher total utility:
A) remains constant.
B) first decreases, then increases.
C) increases.
D) first increases, then decreases.

178. The maximum amount of one good a consumer would be willing togive up in order to obtain an additional unit of another is calledthe:
A) marginal rate of substitution.
B) marginal rate of utility exchange.
C) average rate of substitution.
D) marginal rate of exchange
189. A fixed factor of production is defined in the text asone:
A) that exists in nature and there is only so much of it.
B) that can be used for one thing only.
C) that can never produce more or less in any time period.
D) whose quantity cannot be changed in a particular period.

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ECON-UB 1 Midterm: Midterm Formulas to Remember

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