2.6 & 2.7 Quiz

Question 1

Demand impact when prices change

Answer 1

Price elasticity of demand

Question 2

Percent change in price is lower than the percent change in quantity demanded

Answer 2

Elastic demand

Question 3

Percent change in price is higher than the percent change in quantity demanded

Answer 3

Inelastic demand

Question 4

Demand is ________ if the PED is greater than one

Answer 4

Elastic

Question 5

Demand is _________ if the PED is less than one

Answer 5

Inelastic

Question 6

Percent change in price is accompanies by the exact percent change in quantity demand

Answer 6

Unit elastic

Question 7

Total revenue

Answer 7

Price of goods x quantity sold

Question 8

Price elasticity of demand formula

Answer 8

(Q2 — Q1) / ((Q2 + Q1) / 2
___________________________

(P2 — P1) / (P2 + P1) / 2

Question 9

Total cost

Answer 9

Fixed cost + variable costs

Question 10

Average total cost

Answer 10

Total cost / quantity of output

Question 11

Total profit

Answer 11

Total revenue — total cost

Question 12

Average profit

Answer 12

Price — average cost

Question 13

The cost advantage that comes with increasing production

Answer 13

Economies of scale

Question 14

Why is it cheaper to produce in bulk?

Answer 14

• Fixed costs are spread out over more units

- improved efficiency

Question 15

When economies of scale no longer function for a firm

Answer 15

Diseconomies of scale

Question 16

Marginal cost

Answer 16

Change in total cost / change in quantity