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FIRST SEM > ECONOMICS 2 > Flashcards

ECONOMICS 2 Flashcards

1
Q

RESPONSIVENESS OF ONE VARIABLE TO A CERTAIN CHANGE IN ANOTHER VARIABLE

A

CONCEPT OF ELASTICITY

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2
Q

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

A

ELASTICITY

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2
Q

= 1

A

UNITARY ELASTIC

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3
Q

= >1

A

ELASTIC

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4
Q

= <1

A

INELASTIC

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5
Q

= ∞

A

PERFECTLY ELASTIC

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6
Q

= 0

A

PERFECTLY INELASTIC

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7
Q

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

A

DEMAND ELASTICITY

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8
Q

PERCENTAGE CHANGE IN QUANTITY DEMANDED RESPECT TO A CHANGE IN PRICE

A

PRICE DEMAND ELASTICITY

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9
Q

USUALLY NEGATIVE BECAUSE INVERSE RELATIONSHIP BETWEEN PRICE AND QUANTITY DEMANDED

A

PRICE DEMAND ELASTICITY

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10
Q

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

A

VEBLEN GOODS

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11
Q

THORSTEIN VEBLEN ONTRODUCED THE CONCEPT OF “CONSPICUOUS CONSUMPTION”

A

VEBLEN GOODS

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12
Q

LOW INCOME, NON LUXURY PRODUCTS THAT CONTRADICT TYPICAL DEMAND THEORY

A

GIFFEN GOODS

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13
Q

COINED LATE 1800S BY SCOTTISH ECONOMIST SIR ROBERT GIFFEN

A

GIFFEN GOODS

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14
Q

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

A

EFFECT ON TOTAL REVENUE

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15
Q

2 TYPES OF EFFECT ON TOTAL REVENUE

A

PRICE EFFECT
QUANTITY EFFECT

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16
Q

INCREASE IN PRICE RESULT TO POSITIVE EFFECT ON REVENUE

A

PRICE EFFECT

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17
Q

INCREASE IN PRICE LEAD TO LESS QUANTITY SOLD

A

QUANTITY EFFECT

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18
Q

MAXIMIZED IF THE ELASTICITY OF DEMAND IS UNITARY

A

EFFECT ON TOTAL REVENUE

19
Q

MEASURES THE RESPONSIVENESS OF QUANTITY DEMANDED OF A GOOD

A

CROSS PRICE DEMAND ELASTICITY

20
Q

PERCENTAGE CHANGE IN DEMAND OVER THE PERCENTAGE CHANGE OF INCOME

A

INCOME DEMAND ELASTICITY

20
Q

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

A

SUPPLY ELASTICITY

21
Q

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

A

PRICE SUPPLY ELASTICITY

22
Q

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

A

PERFECT COMPETITION

23
Q

SINGLE SELLER OR PRODUCER THAT ASSUMES A DOMINANT POSITION

A

PURE MONOPOLY COMPETITION

24
Q

SMALL NUMBER OF FIRMS CONTROL THE MARKET

A

OLIGOPOLY COMPETITION

25
Q

COMPANIES OFFER COMPETING PRODUCTS OR SERVICES BUT NOT PERFECT SUBSTITUTES

A

MONOPOLISTIC COMPETITION

26
Q

CREATION OF GOODS AND SERVICES USING THE INPUTS OF PRODUCTION

A

PRODUCTION FUNCTION

27
Q

GOOD AND SERVICES CREATED USING PRODUCTION INPUTS

A

OUTPUT

28
Q

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

A

INPUT

29
Q

CLASSIFICATION OF INPUTS

A

FIXED INPUTS
VARIABLE INPUTS

30
Q

REMAIN CONSTANT REGARDLESS OF THE VOLUME OR QUANTITY OF PRODUCTION

A

FIXED INPUTS

31
Q

VARY IN ACCORDANCE TO THE VOLUME OR QUANTITY OF PRODUCTION.

A

VARIABLE INPUTS

32
Q

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

A

LAW OF DIMINISHING RETURNS

33
Q

ADDITIONAL OUTPUT PRODUCED ALL OTHER INPUTS ARE CONSTANT

A

MARGINAL PRODUCT

34
Q

OUTPUT PRODUCED PER UNIT OF THE INPUT

A

AVERAGE PRODUCT

35
Q

THREE STAGES OF PRODUCTION

A

STAGE 1
STAGE 2
STAGE 3

36
Q

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

A

STAGE 1

37
Q

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

A

STAGE 2

38
Q

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

A

STAGE 3

39
Q

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

A

ISOQUANT

40
Q

ALL COMBINATIONS OF INPUTS PURCHASE AT CONSTANT PRICES

A

ISOCOST LINE

41
Q

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

A

CONSUMER THEORY

42
Q

WHEN THE INCOME GOES UP, THE QUANTITY GOES UP

A

CONSUMER THEORY

43
Q

THE ADDITONAL SATISFACTION OBTAINED FROM THE CONSUMPTION

A

MARGINAL UTILITY

44
Q

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

A

MARGINAL UTILITY

FIRST SEM (10 decks)

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