Podcast
Questions and Answers
What is the formula for average total cost (ATC)?
What is the formula for average total cost (ATC)?
- The ratio of change in revenue to change in output
- Price times quantity sold
- Total cost (TC) divided by the number of units produced (correct)
- Change in revenue divided by change in output
Under conditions of perfect competition, what is the relationship between price and marginal revenue (MR)?
Under conditions of perfect competition, what is the relationship between price and marginal revenue (MR)?
- Marginal revenue (MR) is greater than price
- Price is identical to marginal revenue (MR) (correct)
- There is no relationship between price and marginal revenue (MR)
- Marginal revenue (MR) is less than price
What is the formula for economic profit?
What is the formula for economic profit?
- Total revenue (TR) minus total economic cost (correct)
- Total cost (TC) divided by the number of units produced
- Total revenue (TR) minus total accounting cost
- Price times quantity sold
What is the breakeven point for a firm in terms of output quantity?
What is the breakeven point for a firm in terms of output quantity?
What is the definition of economies of scale?
What is the definition of economies of scale?
If the own-price elasticity of demand is equal to negative one, what can be concluded about the demand for the good?
If the own-price elasticity of demand is equal to negative one, what can be concluded about the demand for the good?
What is the phenomenon that occurs when, as a good’s price falls, more of this good is substituted for other, more expensive goods?
What is the phenomenon that occurs when, as a good’s price falls, more of this good is substituted for other, more expensive goods?
If income elasticity of demand is negative, what type of good does it indicate?
If income elasticity of demand is negative, what type of good does it indicate?
What does a positive cross-price elasticity of demand indicate about two goods?
What does a positive cross-price elasticity of demand indicate about two goods?
What does a negative income elasticity of demand indicate about a good?
What does a negative income elasticity of demand indicate about a good?
What is the result of a decline in price on total expenditure if own-price elasticity of demand is greater than one in absolute terms?
What is the result of a decline in price on total expenditure if own-price elasticity of demand is greater than one in absolute terms?
What is the phenomenon that occurs when, as a good’s price falls, more of this good is substituted for other, more expensive goods?
What is the phenomenon that occurs when, as a good’s price falls, more of this good is substituted for other, more expensive goods?
What type of good does a negative income elasticity of demand indicate?
What type of good does a negative income elasticity of demand indicate?
What can be concluded about the demand for a good if the own-price elasticity of demand is equal to negative one?
What can be concluded about the demand for a good if the own-price elasticity of demand is equal to negative one?
What does a positive cross-price elasticity of demand indicate about two goods?
What does a positive cross-price elasticity of demand indicate about two goods?
