Day 5

Question 1

Define: Elasticity

Answer 1

How sensitive the demand, or supply of a product is to a change in price

Perfectly Elastic = 1.0
Inelastic < 1.0

MCQ-04034

Question 2

Define: Collusive Pricing

Answer 2

Competitors will collude or conspire to maintain prices and mutual profitability.

Prices are higher than the competitive price to customers

MCQ-08302

Question 3

Equation: Price Elasticity of Demand

Answer 3

(Q2-Q1) ÷ Q1 / (P2-P1) ÷ P1

MCQ-03708

Question 4

What does it mean if a product is elastic?

Answer 4

Demand is elastic if a decline in Price results in an increase in Total Revenue

OR

If an increase in Price results in a decrease in Total Revenue

MCQ-03722

Question 5

What does it mean when the demand for a product is price unit elastic?

Answer 5

An increase in Price will have no effect on Total Revenue

MCQ-03520

Question 6

Define: an Inelastic good

Answer 6

You need the product no matter what the price

EX: Insulin for a diabetic

MCQ-03715

Question 7

Define: Deflation

Answer 7

General decline in prices for goods and services

MCQ-06622

Question 8

Equation: Real Cost

Answer 8

Future Value / (1 + Inflation Rate)^n

MCQ-14537

Question 9

What effects does inflation have on monetary assets?

Answer 9

Inflation erodes the purchasing power of cash and money market accounts

MCQ-14538