Economics Chapter on Production and Elasticity

When the percentage change in quantity demanded is less than the percentage change in price. For example, a 10% increase in price results in only a 5% decrease in quantity demanded.

When the percentage change in quantity demanded is greater than the percentage change in price. For example, a 10% increase in price results in a 20% decrease in quantity demanded.

When the percentage change in quantity demanded is equal to the percentage change in price.

The responsiveness of quantity demanded to a change in price.

When the price of a good rises, consumers will tend to substitute it with a cheaper alternative.

When the price of a good rises, consumers have less purchasing power, leading to a reduction in overall spending on goods and services.

A good that has a price elasticity of demand greater than 1.

A good that has a price elasticity of demand less than 1.

The sensitivity of demand to changes in price, measured as the percentage change in quantity demanded divided by the percentage change in price.

The relationship between price and total expenditure (TE) where a change in price affects total expenditure.

When price and total expenditure move in the same direction. If price goes up, total expenditure goes up, and vice versa.

When price goes up, total expenditure falls, and vice versa. This occurs when demand is elastic.

When the total expenditure remains constant despite price changes. This occurs when demand is unit elastic.

The term "Lower Segment" refers to the lower part of a particular market or segment.

The term "Upper Segment" refers to the upper part of a particular market or segment.

The term "Blower Ed" refers to those who offer educational services to the lower segment of a market.

The term "Above the Baseline" refers to those who offer educational services to the upper segment of the market.

The term "met need" refers to the satisfaction of a need within a specific market segment. It emphasizes the focus on addressing the specific needs of that particular group.

The concept that the effectiveness of variable factors increases when they are used in conjunction with fixed factors. For example, a worker is more productive when they have access to more machinery and tools (fixed factors).

The point at which the total output per unit of input reaches its maximum. This happens when the marginal product (MP) equals the average product (AP).

The additional output produced by adding one more unit of variable input (e.g., an extra worker).

The total amount of output produced per unit of input. It's calculated by dividing total output by the quantity of input.

Factors of production that cannot be easily adjusted in the short run. Examples include land, buildings, and machinery.

Factors of production that can be easily adjusted in the short run. Examples include labor, raw materials, and energy.

An assumption in the Law of Variable Proportions that the technology used to produce goods remains constant.

The concept that fixed factors of production cannot be divided into smaller units. For example, a machine cannot be split into half a machine.

The total fixed cost (TFC) divided by the quantity of output (Q). It represents the average fixed cost per unit of output.

The total variable cost (TVC) divided by the quantity of output (Q). It represents the average variable cost per unit of output.

The sum of average fixed cost (AFC) and average variable cost (AVC). It represents the average total cost per unit of output.

The additional cost incurred by producing one more unit of output. It's calculated as the change in total cost divided by the change in output.

The difference between total revenue (TR) and total cost (TC). It represents the profit or loss generated by a firm.

The relationship between the quantity of output produced and the average total cost (ATC) of production.

A curve that represents the relationship between the quantity of output produced and the average fixed cost (AFC) of production. It is always downward sloping, approaching but never reaching the x-axis.

A curve that shows the relationship between the quantity of output produced and the average variable cost (AVC) of production. It is U-shaped, initially decreasing, reaching a minimum, and then increasing.

The relationship between the marginal cost (MC) curve and the average total cost (AC) curve is crucial for understanding cost behavior. The MC curve intersects the AC curve at its minimum point.

When MC is less than AC, AC is decreasing. Conversely, when MC is greater than AC, AC is increasing.

The marginal cost (MC) curve intersects the average variable cost (AVC) curve also at its minimum point.

When MC is less than AVC, AVC is decreasing. Conversely, when MC is greater than AVC, AVC is increasing.

When marginal cost (MC) is falling, total cost (TC) is increasing at a decreasing rate. When MC is at its minimum, TC is increasing at a constant rate. When MC is rising, TC is increasing at an increasing rate.

When marginal cost (MC) is falling, total variable cost (TVC) is increasing at a decreasing rate. When MC is at its minimum, TVC is increasing at a constant rate. When MC is rising, TVC is increasing at an increasing rate.