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Econ 203 Quiz 1 Detailed Questions And Expert Answers 2024
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Econ 203 Quiz 1 Detailed Questions And Expert Answers 2024
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Econ 203 Quiz 1 Detailed Questions AndExpert Answers 2024
Model - ANS Mathematical representation of a concept in a simplified way. Based
on a theory.
Perfect Competition - ANS A large number of firms and Buyers so that one entity
cannot affect the price
Convex - ANS Straight line segment connecting any 2 points that lies on or above
the graph.
Strictly Convex/Concave - ANS All such line segments line entirely above/below the
graph. Except for endpoints.
Concave - ANS Straight line segment connecting any 2 points on the graph lies on
or below the graph.
Substitute Good - ANS Increase in price of one good (movement along D curve)
causes and increase in demand for the now cheaper alternative (shift in D curve),
or vice versa.
Complementary goods - ANS If price of good Y increases, demand curve of both
goods x and y shift back as there is less demand for both.
, Normal Good - ANS Rise in income leads to an increase in demand
Inferior Good - ANS Rise in income leads to decrease in demand
Demand Function - ANS x = d(px, py, m1, m2)
- each individual has their own income, and subsequent demand but prices are
same for each.
- if we fix py, m1, and m2 that allows us to plot pc and the demand curve
- if px changes it causes a shift along demand curve. If any fixed variables change
cause demand curve TO shift
price elasticity of demand - ANS a measure of the responsiveness of quantity
demanded to a change in price
(% Change in Quantity Demanded) / (% Change in Price)
arc price elasticity of demand - ANS An approximate form. Negative reciprocal of
the slope of the demand curve. (Not the best definition, ask TA)
Point Price Elasticity of Demand - ANS Ask TA what definition is
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