eocn final 2

  1. The concept of opportunity cost would explain whether someone chooses to drive, take a cab, take a bus, or walk to school or work because someone with ___________.
    a high wage is more likely to drive or take a cab to work because his time is worth more.
  2. Does this imply that using a bus to get to the destination involves lower total costs than getting there by​ car? What if the bus​ doesn't take the fastest route from point A to point​ B?
    The marginal cost of using a bus may be higher if it takes more time than by car.
  3. In a perfectly competitive​ market, if one seller chooses to charge a price for its good that is slightly higher than the market​ price, then it will​ _________.
    lose all or almost all of its customers.
  4. In a perfectly competitive​ market, sellers​ _________ and buyers​ _________.
    cannot charge more than the market​ price; cannot pay less than the market price.
  5. Which of the following is NOT a direct determining factor of a​ consumer's purchase​ decisions?
    Cost of factor inputs
  6. In a perfectly competitive​ market, all​ consumers:
    are price takers.
  7. ​________ is the difference between the willingness to pay and the price paid for a good.
    Consumer surplus
  8. A good is said to have a relatively elastic demand if the value of price elasticity​ is:
    greater than 1.
  9. 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.
  10. 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
  11. 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.
Card Set
eocn final 2