Total Expenditure and Total Value Flashcards

1
Q

What is total revenue

A

the amount paid by buyers and received by sellers of the good

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2
Q

how to calculate total revenue

A

price of good x quantity sold

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3
Q

does total revenue increase or decrease when price increases in an inelastic demand urve

A

revenue increases

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4
Q

does total revenue increase or decrease when price increases in an elastic demand curve

A

revenue decreases

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5
Q

how does revenue change in a unitary elasticity

A

revenue doesnt change

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6
Q

how to calculate income inelasticity of demand

A

% change in quantity / % change in income

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7
Q

how to calculate cross price elasticity of demand

A

% change in quantity A / % change in price B

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8
Q

how to calculate elasticity of supply

A

% change in quantity supplied / % change in price

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9
Q

what does income elasticity of demand measure

A

how much the quantity demanded of a good responds to the change in consumers’ income

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10
Q

what does price elasticity of demand measure

A

how much the quantity supplied of a good responds to a change in the price of that good (ie how flexible sellers are to a change in the amount of the good they produce)

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11
Q

does an increase in price of a perfectly inelastic supply lead to an increase or decrease in quantity supplied

A

quantity supplied remains unchanged

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12
Q

in general does a steeper curve mean more elastic or more inelastic

A

more inelastic

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13
Q

determinants of price elasticity of supply

A

availability of sellers to change the amount of the good they produce

time period

size of industry

ease of storing stock

mobility of factors of production

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14
Q

example of inelastic supply of goods

A

beach front land

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15
Q

example of elastic supply of goods

A

cars, manufactured goods

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16
Q

is supply more or less elastic in the longrun

A

more elastic