ECONOMICS 2

Question 1

RESPONSIVENESS OF ONE VARIABLE TO A CERTAIN CHANGE IN ANOTHER VARIABLE

Answer 1

CONCEPT OF ELASTICITY

Question 2

PERCENTAGE CHANGE IN ONE VARIABLE IN RELATION TO THE PERCENTAGE IN ANOTHER VARIABLE

Answer 2

ELASTICITY

Question 2

= 1

Answer 2

UNITARY ELASTIC

Question 3

= >1

Answer 3

ELASTIC

Question 4

= <1

Answer 4

INELASTIC

Question 5

= ∞

Answer 5

PERFECTLY ELASTIC

Question 6

= 0

Answer 6

PERFECTLY INELASTIC

Question 7

CONSUMER’S RESPONSIVENESS OR REACTION TO CHANGES ON ITS SELECTED DETERMINANTS.

Answer 7

DEMAND ELASTICITY

Question 8

PERCENTAGE CHANGE IN QUANTITY DEMANDED RESPECT TO A CHANGE IN PRICE

Answer 8

PRICE DEMAND ELASTICITY

Question 9

USUALLY NEGATIVE BECAUSE INVERSE RELATIONSHIP BETWEEN PRICE AND QUANTITY DEMANDED

Answer 9

PRICE DEMAND ELASTICITY

Question 10

LUXURY ITEMS WHERE DEMAND INCREASES AS PRICE RISES. DEFIES THE TYPICAL LAW OF DEMAND

Answer 10

VEBLEN GOODS

Question 11

THORSTEIN VEBLEN ONTRODUCED THE CONCEPT OF “CONSPICUOUS CONSUMPTION”

Answer 11

VEBLEN GOODS

Question 12

LOW INCOME, NON LUXURY PRODUCTS THAT CONTRADICT TYPICAL DEMAND THEORY

Answer 12

GIFFEN GOODS

Question 13

COINED LATE 1800S BY SCOTTISH ECONOMIST SIR ROBERT GIFFEN

Answer 13

GIFFEN GOODS

Question 14

IMPERATIVE FOR A FIRM WHAT EFFECT OF SUCH CHANGE IN PRICE ON TOTAL REVENUE

Answer 14

EFFECT ON TOTAL REVENUE

Question 15

2 TYPES OF EFFECT ON TOTAL REVENUE

Answer 15

PRICE EFFECT
QUANTITY EFFECT

Question 16

INCREASE IN PRICE RESULT TO POSITIVE EFFECT ON REVENUE

Answer 16

PRICE EFFECT

Question 17

INCREASE IN PRICE LEAD TO LESS QUANTITY SOLD

Answer 17

QUANTITY EFFECT

Question 18

MAXIMIZED IF THE ELASTICITY OF DEMAND IS UNITARY

Answer 18

EFFECT ON TOTAL REVENUE

Question 19

MEASURES THE RESPONSIVENESS OF QUANTITY DEMANDED OF A GOOD

Answer 19

CROSS PRICE DEMAND ELASTICITY

Question 20

PERCENTAGE CHANGE IN DEMAND OVER THE PERCENTAGE CHANGE OF INCOME

Answer 20

INCOME DEMAND ELASTICITY

Question 20

MEASURES DEGREE PRODUCER’S RESPONSIVENESS OR REACTION TO CHANGES ON ITS SELECTED DETERMINANT

Answer 20

SUPPLY ELASTICITY

Question 21

MEASURES RESPONSIVENESS OF QUANTITY SUPPLIED IN RESPONSE TO CHANGE PRICE OF THE PRODUCT

Answer 21

PRICE SUPPLY ELASTICITY

Question 22

IDEALIZED MARKET CONDITION WHERE MANY SELLERS COMPETE. RARELY OCCURS IN REAL-WORLD MARKETS

Answer 22

PERFECT COMPETITION

Question 23

SINGLE SELLER OR PRODUCER THAT ASSUMES A DOMINANT POSITION

Answer 23

PURE MONOPOLY COMPETITION

Question 24

SMALL NUMBER OF FIRMS CONTROL THE MARKET

Answer 24

OLIGOPOLY COMPETITION

Question 25

COMPANIES OFFER COMPETING PRODUCTS OR SERVICES BUT NOT PERFECT SUBSTITUTES

Answer 25

MONOPOLISTIC COMPETITION

Question 26

CREATION OF GOODS AND SERVICES USING THE INPUTS OF PRODUCTION

Answer 26

PRODUCTION FUNCTION

Question 27

GOOD AND SERVICES CREATED USING PRODUCTION INPUTS

Answer 27

OUTPUT

Question 28

FACTORS OF PRODUCTION INCLUDE LAND, LABOR, CAPITAL, AND ENTREPRENEURSHIP

Answer 28

INPUT

Question 29

CLASSIFICATION OF INPUTS

Answer 29

FIXED INPUTS VARIABLE INPUTS

Question 30

REMAIN CONSTANT REGARDLESS OF THE VOLUME OR QUANTITY OF PRODUCTION

Answer 30

FIXED INPUTS

Question 31

VARY IN ACCORDANCE TO THE VOLUME OR QUANTITY OF PRODUCTION.

Answer 31

VARIABLE INPUTS

Question 32

SUCCESSIVE UNITS OF VARIABLE INPUT IS COMBINED WITH A FIXED INPUT WILL INCREASE

Answer 32

LAW OF DIMINISHING RETURNS

Question 33

ADDITIONAL OUTPUT PRODUCED ALL OTHER INPUTS ARE CONSTANT

Answer 33

MARGINAL PRODUCT

Question 34

OUTPUT PRODUCED PER UNIT OF THE INPUT

Answer 34

AVERAGE PRODUCT

Question 35

THREE STAGES OF PRODUCTION

Answer 35

STAGE 1 STAGE 2 STAGE 3

Question 36

STARTS AT THE ORIGIN UNTIL THE HIGHEST PORTION OF AVERAGE PRODUCT (AP)

Answer 36

STAGE 1

Question 37

FROM HIGHEST PORTION OF THE AVERAGE PRODUCT (AP) UNTIL MARGINAL PRODUCT (MP) IS ZERO

Answer 37

STAGE 2

Question 38

STAGE BEGINS WHERE MARGINAL PRODUCT (MP) IS ZERO UNTIL NEGATIVE RANGE

Answer 38

STAGE 3

Question 39

VARIOUS COMBINATIONS USED TO PRODUCE THE SAME LEVEL OF OUTPUT. THEY DO NOT INTERSECT. THEY ARE CONVEX TO ORIGIN.

Answer 39

ISOQUANT

Question 40

ALL COMBINATIONS OF INPUTS PURCHASE AT CONSTANT PRICES

Answer 40

ISOCOST LINE

Question 41

BRANCH OF MICROECONOMICS STUDYING HOW PEOPLE DECIDE TO SPEND THEIR MONEY BASED ON THEIR PREFERENCES AND BUDGET CONSTRAINT

Answer 41

CONSUMER THEORY

Question 42

WHEN THE INCOME GOES UP, THE QUANTITY GOES UP

Answer 42

CONSUMER THEORY

Question 43

THE ADDITONAL SATISFACTION OBTAINED FROM THE CONSUMPTION

Answer 43

MARGINAL UTILITY

Question 44

THE MORE YOU CONSUME, THE LESSEN SATISFACTION YOU GET FROM INDIVIDUAL UNIT

Answer 44

MARGINAL UTILITY