# exam set 2

 ________ is the difference between the willingness to pay and the price paid for a good. Consumer surplus A good is said to have a relatively elastic demand if the value of price elasticity​ is: greater than 1. If a​ 1% change in the price of a good causes a​ 1% change in the quantity​ demanded, the good has an elasticity of​ demand: equal to 1. Sandra consumes two​ goods: tea and coffee. Her demand for tea is​ inelastic, while her demand for coffee is elastic. If there is an increase in the price of both tea and​ coffee, ________. ​Sandra's expenditure on tea will increase and her expenditure on coffee will decrease Which of the following best describes a good with perfectly elastic​ demand? Even the smallest increase in the price of the good will cause consumers to stop consuming it completely. The price elasticity of demand for a good that is a necessity is likely to​ be: inelastic. Which of the following statements best describes a normal​ good? A normal good is a good whose demand increases with an increase in​ consumers' income. All firms in a perfectly competitive market are said to be​ __________. price takers. In a perfectly competitive market, a seller __, choose to raise the price of its good since all sellers in the market produce ____,  so raising the price would result in cannot, identical goods, losing all its consumers When the ATC curve is​ decreasing, we know that the MC curve is ___ when the ATC curve is​ increasing, we know that MC is below the ATC , above the ATC curve Which of the following equations calculates the profits of a​ firm? Total revenuesminus−Total costs When comparing the accounting profit with economic​ profit, it must be true that the accounting profit is____  economic profit. greater than or equal to Authordwrght16 ID329521 Card Setexam set 2 Descriptionmidterm Updated2017-03-14T17:49:54Z Show Answers