final

Question 1

Utility Maximization is when:

Answer 1

Budget line tangent to maximum indifference curve

Question 2

Market Rate of substitution definition

Answer 2

Rate at which one good can be exchanged for another at current prices

Question 3

Negative of slope of budget line

Answer 3

Market Rate of Substitution

Question 4

The larger the % of a budget a good takes, the ____ elastic

Answer 4

More

Question 5

Constant MRS has a slope of

Answer 5

-1

Question 6

Shift of budget line for income change

Answer 6

Parallel

Question 7

Shift of budget line for price change

Answer 7

individual intercept changes

Question 8

The demand curve is more elastic at the:

Answer 8

Top, left of the curve

Question 9

The demand curve is more inelastic at the:

Answer 9

Bottom, right of the curve

Question 10

Elasticity along segments is:

Answer 10

Arc elasticity

Question 11

Elasticity at a point (with value given for price)

Answer 11

Point elasticity

Question 12

Positive Income Elasticity

Answer 12

Normal Good

Question 13

Negative Income Elasticity

Answer 13

Inferior Good

Question 14

Positive Cross Price Elasticity

Answer 14

Substitute Goods

Question 15

Negative Cross Price Elasticity

Answer 15

Complements

Question 16

Elasticity formula you forgot

Answer 16

Q/P

Question 17

If the absolute value of the elasticity is greater than 1,

Answer 17

Elastic

Question 18

Abs value of elasticity is infinite

Answer 18

Perfectly Elastic

Question 19

Abs value of elasticity is zero

Answer 19

Perfectly Inelastic

Question 20

If income falls enough,

Answer 20

Everything is a normal good

Question 21

Four assumptions of well behaved indifference curves

Answer 21

Completeness, more is better, diminishing MRS, transitivity

Question 22

Negative of slope of indifference curve

Answer 22

MRS

Question 23

MRS definition

Answer 23

Rate at which a customer is willing to substitute one good for another

Question 24

Substitution Effect

Answer 24

Comp-old

Question 25

Income effect

Answer 25

New-comp

Question 26

Consumer spends entire budget on one good

Answer 26

Corner Solution

Question 27

If MRS is constant, goods are

Answer 27

Perfect Substitutes

Question 28

Prince consumption curve slopes up

Answer 28

Complements

Question 29

Prince consumption curve slopes down

Answer 29

Substitutes

Question 30

Income consumption curve slopes up

Answer 30

Normal

Question 31

Income consumption curve slopes down

Answer 31

Inferior

Question 32

Substitution Effect (graphically)

Answer 32

Change in Slope

Question 33

Income Effect (graphically)

Answer 33

New indifference curve w/ parallel budget line shift

Question 34

Uncompensated Price Change

Answer 34

Price change with no income change

Question 35

Compensated Price Change

Answer 35

Price and income changes, leaving utility unaffected

Question 36

Substitution Effect

Answer 36

Change in consumption resulting from a change in relative prices

Question 37

Income effect

Answer 37

Change in consumption resulting from a change in purchasing power

Question 38

If good is inferior, ___ dominates ___

Answer 38

Income effect, substitution effect

Question 39

Characteristics of Giffen Goods

Answer 39

Inferior, no close substitutes, large percentage of budget

Question 40

Production

Answer 40

Transforming productive inputs into products of greater value

Question 41

Production Function

Answer 41

Max amount of output that can be produced with a given set of inputs

Question 42

MPL

Answer 42

First derivative of total product

Question 43

Synergy ___ be true, diminishing marginal returns is ___ true

Answer 43

May, always

Question 44

Increasing marginal returns wherever

Answer 44

MP > AP

Question 45

For an inferior good, price falling means the substitution effect results in the person buying ___ of a good

Answer 45

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