Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. substitution effect; 2. price elasticity of demand; 3. perfectly inelastic demand; 4. perfectly elastic demand; _____the case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a horizontal line. _____the case in which the quantity demanded does not respond at all to changes in the price; the demand curve is a vertical line. _____the ratio of the percent change in the quantity demanded to the percent change in the price as we move along the demand curve (dropping the minus sign). _____the change in the quantity of a good demanded as the consumer substitutes the good that has become relatively cheaper for the good that has become relatively more expensive.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. substitution effect; 2. price elasticity of demand; 3. perfectly inelastic demand; 4. perfectly elastic demand; __4__the case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a horizontal line. __3__the case in which the quantity demanded does not respond at all to changes in the price; the demand curve is a vertical line. __2__the ratio of the percent change in the quantity demanded to the percent change in the price as we move along the demand curve (dropping the minus sign). __1__the change in the quantity of a good demanded as the consumer substitutes the good that has become relatively cheaper for the good that has become relatively more expensive.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. elastic demand; 2. inelastic demand; 3. unit-elastic demand; 4. total revenue; _____the price elasticity of demand is greater than 1. _____the total value of sales of a good or service (the price of the good or service multiplied by the quantity sold). _____when the price elasticity of demand is less than 1. _____the price elasticity of demand is exactly 1

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. elastic demand; 2. inelastic demand; 3. unit-elastic demand; 4. total revenue; __1__the price elasticity of demand is greater than 1. __4__the total value of sales of a good or service (the price of the good or service multiplied by the quantity sold). __2__when the price elasticity of demand is less than 1. __3__the price elasticity of demand is exactly 1

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. consumer surplus; 2. total producer surplus; 3. producer surplus; 4. progressive tax; _____a term often used to refer both to individual consumer surplus and to total consumer surplus. _____the sum of the individual producer surpluses of all the sellers of a good in a market. _____a term often used to refer to either individual producer surplus or to total producer surplus. _____a tax that takes a larger share of the income of high-income taxpayers than of low-income taxpayers.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. consumer surplus; 2. total producer surplus; 3. producer surplus; 4. progressive tax; __1__a term often used to refer both to individual consumer surplus and to total consumer surplus. __2__the sum of the individual producer surpluses of all the sellers of a good in a market. __3__a term often used to refer to either individual producer surplus or to total producer surplus. __4__a tax that takes a larger share of the income of high-income taxpayers than of low-income taxpayers.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. regressive tax; 2. proportional tax; 3. excise tax; 4. tax incidence; _____a tax on sales of a particular good or service. _____a tax that takes a smaller share of the income of high-income taxpayers than of low-income taxpayers. _____the distribution of the tax burden. _____a tax that is the same percentage of the tax base regardless of the taxpayer’s income or wealth.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. regressive tax; 2. proportional tax; 3. excise tax; 4. tax incidence; __3__a tax on sales of a particular good or service. __1__a tax that takes a smaller share of the income of high-income taxpayers than of low-income taxpayers. __4__the distribution of the tax burden. __2__a tax that is the same percentage of the tax base regardless of the taxpayer’s income or wealth.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. utility; 2. marginal utility; 3. principle of diminishing marginal utility; 4. budget constraint; _____the proposition that each successive unit of a good or service consumed adds less to total utility than does the previous unit. _____ measure of the satisfaction derived from consumption of goods and services. _____the cost of a consumer’s consumption bundle cannot exceed the consumer’s income. _____the change in total utility generated by consuming one additional unit of a good or service.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. utility; 2. marginal utility; 3. principle of diminishing marginal utility; 4. budget constraint; __3__the proposition that each successive unit of a good or service consumed adds less to total utility than does the previous unit. __1__ measure of the satisfaction derived from consumption of goods and services. __4__the cost of a consumer’s consumption bundle cannot exceed the consumer’s income. __2__the change in total utility generated by consuming one additional unit of a good or service.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. economic profit; 2. marginal cost curve; 3. fixed input; 4. variable input; _____a business’s revenue minus the opportunity cost of resources; usually less than the accounting profit. _____a graphical representation showing how the cost of producing one more unit depends on the quantity that has already been produced. _____an input whose quantity is set for a period of time and cannot be varied (for example, land). _____an input whose quantity the firm can change at any time (for example, labor).

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. economic profit; 2. marginal cost curve; 3. fixed input; 4. variable input; __1__a business’s revenue minus the opportunity cost of resources; usually less than the accounting profit. __2__a graphical representation showing how the cost of producing one more unit depends on the quantity that has already been produced. __3__an input whose quantity is set for a period of time and cannot be varied (for example, land). __4__an input whose quantity the firm can change at any time (for example, labor).

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. total product curve; 2. marginal product; 3. diminishing returns to an input; 4. fixed cost; _____cost that does not depend on the quantity of output produced. _____the effect observed when an increase in the quantity of an input, while holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input. _____the additional quantity of output produced by using one more unit of that input. _____a graphical representation of the production function, showing how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. total product curve; 2. marginal product; 3. diminishing returns to an input; 4. fixed cost; __4__cost that does not depend on the quantity of output produced. __3__the effect observed when an increase in the quantity of an input, while holding the levels of all other inputs fixed, leads to a decline in the marginal product of that input. __2__the additional quantity of output produced by using one more unit of that input. __1__a graphical representation of the production function, showing how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. variable cost; 2. total cost; 3. average fixed cost; 4. average variable cost; _____the variable cost per unit of output. _____a cost that depends on the quantity of output produced; the cost of the input that changes. _____the sum of the fixed cost and the variable cost of producing a quantity of output. _____the fixed cost per unit of output.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. variable cost; 2. total cost; 3. average fixed cost; 4. average variable cost; __4__the variable cost per unit of output. __1__a cost that depends on the quantity of output produced; the cost of the input that changes. __2__the sum of the fixed cost and the variable cost of producing a quantity of output. __3__the fixed cost per unit of output.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. long-run average total cost curve; 2. economies of scale; 3. diseconomies of scale; 4. sunk cost; _____ a cost that has already been incurred and is nonrecoverable. _____a graphical representation showing the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output. _____long-run average total cost increases as output increases. _____long-run average total cost declines as output increases.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. long-run average total cost curve; 2. economies of scale; 3. diseconomies of scale; 4. sunk cost; __4__ a cost that has already been incurred and is nonrecoverable. __1__a graphical representation showing the relationship between output and average total cost when fixed cost has been chosen to minimize average total cost for each level of output. __3__long-run average total cost increases as output increases. __2__long-run average total cost declines as output increases.

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. monopolistic competition; 2. perfectly competitive market; 3. monopoly; 4. oligopoly; _____a market in which all market participants are price-takers. _____an industry with only a small number of producers. _____a market structure in which there are many competing firms in an industry, each firm sells a differentiated product, and there is free entry into and exit from the industry in the long run. _____an industry controlled by one firm

Mr. Weiss Test 2 – Sections 9 & 10 – Vocabulary Review 1. monopolistic competition; 2. perfectly competitive market; 3. monopoly; 4. oligopoly; __2__a market in which all market participants are price-takers. __4__an industry with only a small number of producers. __1__a market structure in which there are many competing firms in an industry, each firm sells a differentiated product, and there is free entry into and exit from the industry in the long run. __3__an industry controlled by one firm