Elastic demand - Study guides, Class notes & Summaries

Define elasticity: Correct Answer-A dimensionless measure of sensitivity or responsiveness. EX: How responsive is the quantity of oil demanded to a change in the price of oil? Define the price elasticity of demand: Correct Answer-A measure of the responsiveness of quantity demanded to a change in price. More responsive equals more elastic. Price elasticity of demand = percentage change in quantity demanded / percentage change in price. Define the price elasticity of supply: Correct Answ...

Elastic Demand correct answers Change in price (%) causes a relatively large change in the quantity demanded (%) Quantity changes faster than price Total revenue increases when price decreases, consumers are more responsive to change >1.0 is elastic Inelastic Demand correct answers Change in price (%) causes a relatively small change in the quantity demanded (%) aka QD is not very sensitive to a change in price Also occurs if the percentage change in QD is less than the percent...

normative statement an opinion that cannot be confirmed by referencing facts positive statement a statement that can be proved by referencing facts why are economic models used? theories cannot be tested in a controlled environment the basic economic problem scarcity - consumer wants are always greater than available resources opportunity cost the next best alternative foregone factors of production resources used by a firm in production list and define the factors of production lab...

What is Foreign Direct Investment? - direct investment in, control over, and management of value-added activities in other countries A production function expresses the relationship between: - Quantity of resource inputs and product/service outputs. Which statement is true about productivity? - The value of the marginal product of labor equals wage in a competitive firm. quantity demanded vs. demand - Quantity demanded is the amount consumers are able and willing to purchase at each speci...

Utilization of health care is often the starting point for studies into the need and/or demand for health care because A.the concepts are interchangeable and utilization is easiest to measure. B.demand and utilization are equal and need is unobservable. C.demand and utilization are similar and utilization is easy to measure. D.utilization is observable and offers information on demand and need. o :# D.utilization is observable and offers information on demand and need. Evidence indicates...

Elasticity Ans: A measure of how much one economic variable responds to changes in another economic variable. Price elasticity of demand Ans: The responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the product's price. Equation for Measuring the Price Elasticity of Demand Ans: (Percentage change in quantity demanded) / (Percentage Change in Price) Price Elasticity o...

CFA Level 1 Economics Exam || With Questions & Answers (100% Verified) CFA Level 1 Economics Exam || With Questions & Answers (100% Verified) Money Multiplier for a change in monetary base Formula - ANSWER - (1+c) / (d+c) c = currency as a % of deposits d = desired reserve ratio Change in Quantity of Money Formula - ANSWER - (Change in Quantity of Money) = (Change in Monetary Base) x (Money Multiplier) Equation of Exchange Formula - ANSWER - = (Money supply) x (Velocity) = GDP = (Pri...

Internal/External Factors of Price - Answer-Internal Factors of Price: 1. Marketing Objective 2. Marketing Mix Strategy 3. Cost External Factors of Price: 1. Demand for your product. 2. Competition 3. Economy Price Elasticity - Answer-Elastic - Consumers buy more or less of a product when the price changes Inelastic- An increase or decrease in price will not significantly affect demand What happens to price/revenue when the demand is elastic/inelastic - Answer-Demand is... Pr...

By focusing the customers on the price of a product, you make: a. the demand for the product more inelastic b. the customers less price sensitive to the product c. the demand for the product more elastic d. only B&C correct answers c. the demand for the product more elastic large amusement parks charge entrance fees rather than fee per ride because: a. customers are more sensitive to paying a fee per ride b. customers are less sensitive to paying a fee per ride c. customers view paying...

ECON 201 Final Exam | Questions with complete solutions A profit-maximizing firm will: A. expand employment if marginal revenue product equals marginal resource cost. B. reduce employment if marginal revenue product equals marginal resource cost. C. reduce employment if marginal revenue product is less than marginal resource cost. D. expand employment if marginal revenue product is less than marginal resource cost. Which of the following describes the equilibrium condition in a purely competit...