Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. substitution effect; 2. price elasticity of demand; 1. substitution effect; 2. price elasticity of demand; 3. perfectly inelastic demand; 4. perfectly elastic 3. perfectly inelastic demand; 4. perfectly elastic demand;demand;_____the case in which any price increase will cause the _____the case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a quantity demanded to drop to zero; the demand curve is a horizontal line. horizontal line.

_____the case in which the quantity demanded does not _____the case in which the quantity demanded does not respond at all to changes in the price; the demand curve is a respond at all to changes in the price; the demand curve is a vertical line. vertical line.

_____the ratio of the percent change in the quantity demanded _____the ratio of the percent change in the quantity demanded to the percent change in the price as we move along the to the percent change in the price as we move along the demand curve (dropping the minus sign).demand curve (dropping the minus sign).

_____the change in the quantity of a good demanded as the _____the change in the quantity of a good demanded as the consumer substitutes the good that has become relatively consumer substitutes the good that has become relatively cheaper for the good that has become relatively more cheaper for the good that has become relatively more expensive.expensive.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. substitution effect; 2. price elasticity of demand; 1. substitution effect; 2. price elasticity of demand; 3. perfectly inelastic demand; 4. perfectly elastic 3. perfectly inelastic demand; 4. perfectly elastic demand;demand;____44__the case in which any price increase will cause the __the case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a quantity demanded to drop to zero; the demand curve is a horizontal line. horizontal line.

____33__the case in which the quantity demanded does not __the case in which the quantity demanded does not respond at all to changes in the price; the demand curve is a respond at all to changes in the price; the demand curve is a vertical line. vertical line.

____22__the ratio of the percent change in the quantity demanded __the ratio of the percent change in the quantity demanded to the percent change in the price as we move along the to the percent change in the price as we move along the demand curve (dropping the minus sign).demand curve (dropping the minus sign).

____11__the change in the quantity of a good demanded as the __the change in the quantity of a good demanded as the consumer substitutes the good that has become relatively consumer substitutes the good that has become relatively cheaper for the good that has become relatively more cheaper for the good that has become relatively more expensive.expensive.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. elastic demand; 2. inelastic demand; 3. unit-1. elastic demand; 2. inelastic demand; 3. unit-elastic demand; 4. total revenue;elastic demand; 4. total revenue;

_____the price elasticity of demand is greater than 1._____the price elasticity of demand is greater than 1.

_____the total value of sales of a good or service (the _____the total value of sales of a good or service (the price of the good or service multiplied by the price of the good or service multiplied by the quantity sold).quantity sold).

_____when the price elasticity of demand is less than _____when the price elasticity of demand is less than 1.1.

_____the price elasticity of demand is exactly 1_____the price elasticity of demand is exactly 1

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. elastic demand; 2. inelastic demand; 3. unit-1. elastic demand; 2. inelastic demand; 3. unit-elastic demand; 4. total revenue;elastic demand; 4. total revenue;

____11__the price elasticity of demand is greater than __the price elasticity of demand is greater than 1.1.

____44__the total value of sales of a good or service (the __the total value of sales of a good or service (the price of the good or service multiplied by the price of the good or service multiplied by the quantity sold).quantity sold).

____22__when the price elasticity of demand is less __when the price elasticity of demand is less than 1.than 1.

____33__the price elasticity of demand is exactly 1__the price elasticity of demand is exactly 1

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. consumer surplus; 2. total producer surplus; 3. 1. consumer surplus; 2. total producer surplus; 3. producer surplus; 4. progressive tax;producer surplus; 4. progressive tax;

_____a term often used to refer both to individual _____a term often used to refer both to individual consumer surplus and to total consumer surplus.consumer surplus and to total consumer surplus.

_____the sum of the individual producer surpluses of _____the sum of the individual producer surpluses of all the sellers of a good in a market.all the sellers of a good in a market.

_____a term often used to refer to either individual _____a term often used to refer to either individual producer surplus or to total producer surplus.producer surplus or to total producer surplus.

_____a tax that takes a larger share of the income of _____a tax that takes a larger share of the income of high-income taxpayers than of low-income high-income taxpayers than of low-income taxpayers.taxpayers.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. consumer surplus; 2. total producer surplus; 3. 1. consumer surplus; 2. total producer surplus; 3. producer surplus; 4. progressive tax;producer surplus; 4. progressive tax;

____11__a term often used to refer both to individual __a term often used to refer both to individual consumer surplus and to total consumer surplus.consumer surplus and to total consumer surplus.

____22__the sum of the individual producer surpluses of __the sum of the individual producer surpluses of all the sellers of a good in a market.all the sellers of a good in a market.

____33__a term often used to refer to either individual __a term often used to refer to either individual producer surplus or to total producer surplus.producer surplus or to total producer surplus.

____44__a tax that takes a larger share of the income of __a tax that takes a larger share of the income of high-income taxpayers than of low-income high-income taxpayers than of low-income taxpayers.taxpayers.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. regressive tax; 2. proportional tax; 3. excise 1. regressive tax; 2. proportional tax; 3. excise tax; 4. tax incidence;tax; 4. tax incidence;_____a tax on sales of a particular good or service. _____a tax on sales of a particular good or service.

_____a tax that takes a smaller share of the income _____a tax that takes a smaller share of the income of high-income taxpayers than of low-income of high-income taxpayers than of low-income taxpayers.taxpayers.

_____the distribution of the tax burden._____the distribution of the tax burden.

_____a tax that is the same percentage of the tax _____a tax that is the same percentage of the tax base regardless of the taxpayer’s income or wealth.base regardless of the taxpayer’s income or wealth.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. regressive tax; 2. proportional tax; 3. excise 1. regressive tax; 2. proportional tax; 3. excise tax; 4. tax incidence;tax; 4. tax incidence;____33__a tax on sales of a particular good or service. __a tax on sales of a particular good or service.

____11__a tax that takes a smaller share of the income __a tax that takes a smaller share of the income of high-income taxpayers than of low-income of high-income taxpayers than of low-income taxpayers.taxpayers.

____44__the distribution of the tax burden.__the distribution of the tax burden.

____22__a tax that is the same percentage of the tax __a tax that is the same percentage of the tax base regardless of the taxpayer’s income or wealth.base regardless of the taxpayer’s income or wealth.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. utility; 2. marginal utility; 3. principle of 1. utility; 2. marginal utility; 3. principle of diminishing marginal utility; 4. budget constraint;diminishing marginal utility; 4. budget constraint;

_____the proposition that each successive unit of a _____the proposition that each successive unit of a good or service consumed adds less to total utility good or service consumed adds less to total utility than does the previous unit.than does the previous unit.

_____ measure of the satisfaction derived from _____ measure of the satisfaction derived from consumption of goods and services.consumption of goods and services.

_____the cost of a consumer’s consumption bundle _____the cost of a consumer’s consumption bundle cannot exceed the consumer’s income. cannot exceed the consumer’s income.

_____the change in total utility generated by _____the change in total utility generated by consuming one additional unit of a good or service. consuming one additional unit of a good or service.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. utility; 2. marginal utility; 3. principle of 1. utility; 2. marginal utility; 3. principle of diminishing marginal utility; 4. budget constraint;diminishing marginal utility; 4. budget constraint;

____33__the proposition that each successive unit of a __the proposition that each successive unit of a good or service consumed adds less to total utility good or service consumed adds less to total utility than does the previous unit.than does the previous unit.

____11__ measure of the satisfaction derived from __ measure of the satisfaction derived from consumption of goods and services.consumption of goods and services.

____44__the cost of a consumer’s consumption bundle __the cost of a consumer’s consumption bundle cannot exceed the consumer’s income. cannot exceed the consumer’s income.

____22__the change in total utility generated by __the change in total utility generated by consuming one additional unit of a good or service. consuming one additional unit of a good or service.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. economic profit; 2. marginal cost curve; 3. fixed 1. economic profit; 2. marginal cost curve; 3. fixed input; 4. variable input;input; 4. variable input;

_____a business’s revenue minus the opportunity cost _____a business’s revenue minus the opportunity cost of resources; usually less than the accounting profit. of resources; usually less than the accounting profit.

_____a graphical representation showing how the cost _____a graphical representation showing how the cost of producing one more unit depends on the quantity of producing one more unit depends on the quantity that has already been produced.that has already been produced.

_____an input whose quantity is set for a period of _____an input whose quantity is set for a period of time and cannot be varied (for example, land).time and cannot be varied (for example, land).

_____an input whose quantity the firm can change at _____an input whose quantity the firm can change at any time (for example, labor). any time (for example, labor).

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. economic profit; 2. marginal cost curve; 3. fixed 1. economic profit; 2. marginal cost curve; 3. fixed input; 4. variable input;input; 4. variable input;

____11__a business’s revenue minus the opportunity cost __a business’s revenue minus the opportunity cost of resources; usually less than the accounting profit. of resources; usually less than the accounting profit.

____22__a graphical representation showing how the cost __a graphical representation showing how the cost of producing one more unit depends on the quantity of producing one more unit depends on the quantity that has already been produced.that has already been produced.

____33__an input whose quantity is set for a period of __an input whose quantity is set for a period of time and cannot be varied (for example, land).time and cannot be varied (for example, land).

____44__an input whose quantity the firm can change at __an input whose quantity the firm can change at any time (for example, labor). any time (for example, labor).

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. total product curve; 2. marginal product; 3. 1. total product curve; 2. marginal product; 3. diminishing returns to an input; 4. fixed cost;diminishing returns to an input; 4. fixed cost;_____cost that does not depend on the quantity of output _____cost that does not depend on the quantity of output produced.produced.

_____the effect observed when an increase in the quantity _____the effect observed when an increase in the quantity of an input, while holding the levels of all other inputs of an input, while holding the levels of all other inputs fixed, leads to a decline in the marginal product of that fixed, leads to a decline in the marginal product of that input.input.

_____the additional quantity of output produced by using _____the additional quantity of output produced by using one more unit of that input.one more unit of that input.

_____a graphical representation of the production _____a graphical representation of the production function, showing how the quantity of output depends function, showing how the quantity of output depends on the quantity of the variable input for a given quantity on the quantity of the variable input for a given quantity of the fixed input. of the fixed input.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. total product curve; 2. marginal product; 3. 1. total product curve; 2. marginal product; 3. diminishing returns to an input; 4. fixed cost;diminishing returns to an input; 4. fixed cost;____44__cost that does not depend on the quantity of output __cost that does not depend on the quantity of output produced.produced.

____33__the effect observed when an increase in the __the effect observed when an increase in the quantity of an input, while holding the levels of all other quantity of an input, while holding the levels of all other inputs fixed, leads to a decline in the marginal product inputs fixed, leads to a decline in the marginal product of that input.of that input.

____22__the additional quantity of output produced by using __the additional quantity of output produced by using one more unit of that input.one more unit of that input.

____11__a graphical representation of the production __a graphical representation of the production function, showing how the quantity of output depends function, showing how the quantity of output depends on the quantity of the variable input for a given quantity on the quantity of the variable input for a given quantity of the fixed input. of the fixed input.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. variable cost; 2. total cost; 3. average fixed cost; 1. variable cost; 2. total cost; 3. average fixed cost; 4. average variable cost; 4. average variable cost;

_____the variable cost per unit of output._____the variable cost per unit of output.

_____a cost that depends on the quantity of output _____a cost that depends on the quantity of output produced; the cost of the input that changes.produced; the cost of the input that changes.

_____the sum of the fixed cost and the variable cost _____the sum of the fixed cost and the variable cost of producing a quantity of output.of producing a quantity of output.

_____the fixed cost per unit of output. _____the fixed cost per unit of output.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. variable cost; 2. total cost; 3. average fixed cost; 1. variable cost; 2. total cost; 3. average fixed cost; 4. average variable cost; 4. average variable cost;

____44__the variable cost per unit of output.__the variable cost per unit of output.

____11__a cost that depends on the quantity of output __a cost that depends on the quantity of output produced; the cost of the input that changes.produced; the cost of the input that changes.

____22__the sum of the fixed cost and the variable cost __the sum of the fixed cost and the variable cost of producing a quantity of output.of producing a quantity of output.

____33__the fixed cost per unit of output. __the fixed cost per unit of output.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. long-run average total cost curve; 2. economies 1. long-run average total cost curve; 2. economies of scale; 3. diseconomies of scale; 4. sunk of scale; 3. diseconomies of scale; 4. sunk cost;cost;_____ a cost that has already been incurred and is _____ a cost that has already been incurred and is nonrecoverable.nonrecoverable.

_____a graphical representation showing the _____a graphical representation showing the relationship between output and average total cost relationship between output and average total cost when fixed cost has been chosen to minimize when fixed cost has been chosen to minimize average total cost for each level of output.average total cost for each level of output.

_____long-run average total cost increases as output _____long-run average total cost increases as output increases.increases.

_____long-run average total cost declines as output _____long-run average total cost declines as output increases.increases.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. long-run average total cost curve; 2. economies 1. long-run average total cost curve; 2. economies of scale; 3. diseconomies of scale; 4. sunk of scale; 3. diseconomies of scale; 4. sunk cost;cost;____44__ a cost that has already been incurred and is __ a cost that has already been incurred and is nonrecoverable.nonrecoverable.

____11__a graphical representation showing the __a graphical representation showing the relationship between output and average total cost relationship between output and average total cost when fixed cost has been chosen to minimize when fixed cost has been chosen to minimize average total cost for each level of output.average total cost for each level of output.

____33__long-run average total cost increases as output __long-run average total cost increases as output increases.increases.

____22__long-run average total cost declines as output __long-run average total cost declines as output increases.increases.

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. monopolistic competition; 2. perfectly 1. monopolistic competition; 2. perfectly competitive market; 3. monopoly; 4. competitive market; 3. monopoly; 4. oligopoly;oligopoly;_____a market in which all market participants are _____a market in which all market participants are price-takers.price-takers.

_____an industry with only a small number of _____an industry with only a small number of producers.producers.

_____a market structure in which there are many _____a market structure in which there are many competing firms in an industry, each firm sells a competing firms in an industry, each firm sells a differentiated product, and there is free entry into differentiated product, and there is free entry into and exit from the industry in the long run. and exit from the industry in the long run.

_____an industry controlled by one firm_____an industry controlled by one firm

Mr. Weiss

Test 2 – Sections 9 & 10 – Vocabulary ReviewTest 2 – Sections 9 & 10 – Vocabulary Review

1. monopolistic competition; 2. perfectly 1. monopolistic competition; 2. perfectly competitive market; 3. monopoly; 4. competitive market; 3. monopoly; 4. oligopoly;oligopoly;____22__a market in which all market participants are __a market in which all market participants are price-takers.price-takers.

____44__an industry with only a small number of __an industry with only a small number of producers.producers.

____11__a market structure in which there are many __a market structure in which there are many competing firms in an industry, each firm sells a competing firms in an industry, each firm sells a differentiated product, and there is free entry into differentiated product, and there is free entry into and exit from the industry in the long run. and exit from the industry in the long run.

____33__an industry controlled by one firm__an industry controlled by one firm