Reference no: EM132598784

ECO 100 Economics for Business - Polytechnic Institute Australia

Part 1:

QUESTIONS

1. We assume that the goal of a business is to profit.

2. PROFIT = Totalminus Total .

3. Total Revenue = Price X .

4. On the diagram below:
a. Label Total Revenue
b. Indicate the point where Total Revenue is Maximised
At this point Price Elasticity of Demand = .

5. Total Cost = costs + Costs
6. Name an example of each one of the costs after the = sign in the above equation.
a. .

b. .

7.
a. A fixed input as output increases while a variable input when output increases.
b. AVERAGE in Average COST, Average PRODUCT and Average REVENUE is:
Average COST ..Cost per of .

Average PRODUCT .. Output per of .

Average REVENUE ... Revenue per of .

8.
a. In the market period supply is increased using .

b. In the short run supply can be increased using .

c. In the long run supply can be increased by changing the ..................

by using new improved .................... and building new .............

9.
a. What is the following diagram called?..............................................

b. Label the point on the curve and the quantity of output that this business should produce to minimize its costs per unit of output.

10. Define:

a. Economies of scale.

b. Increasing Returns to scale.

Part 2:

FILL IN THE BLANKS:
1. Elasticity is the of Supply and Demand to a small in one of the factors affecting supply or demand.
2. Complete
a. When price changes by a small amount and the quantity demanded only changes by a smaller amount then the product is price . For example .

3. Label each of the following curve:
a. Elastic
b. Inelastic
c. Unit elasticity

4. Elasticity of demand changes along a demand curve label elasticity of demand on the following curve at each point or range.

5. Factors that generally affect the degree of price elasticity of demand include:

6.

a. Substitutes:Products with substitutes are those without substitutes are (eg,electricity or Cigarettes).
b. Complements (eg.a and ): A product which is the cheaper complement to a larger more expensive product tends to be
c. Necessities:These products have price elasticities of demand.
d. Time:if a price rises consumers may have demand however given time, they find a, so in the long run demand is more .
7.
a. If a business's product has INELASTIC Demand what should the owner do to increase their Total Sales Revenue (to the Price)
b. If a business's product has ELASTIC Demand what should the owner do to increase their Total Sales Revenue (to the Price)
c. Complete: When the elasticity of demand for a product is unit price elasticity of demand then at this price a business maximises their .

Part 3:

1. A MOVEMENT ALONG A CURVE IS CALLED EITHER
AN ......................................................
OR ...........................................
AND IS GENERALLY CAUSED BY A CHANGE IN
.................................................

2. A MOVEMENT to a NEW CURVE IS CALLED EITHER
AN ......................................................
OR ...........................................
AND IS GENERALLY CAUSED BY A CHANGE IN
.................................................
3. Label which of the following represents:

a. an increase in Demand
b. an expansion of demand

4. Complete:
FOR DEMAND
a. If the price of a substitute increases then demand for its substitute .................................
b. Name two substitutes........................
Are all products technically substitutes?......Why
c. If the price of a complement? ............... increases then demand for its complement ...........................
d. If the consumers incomeincreases and the product is a normal good then demand for it ...........................
FOR SUPPLY
e. If Costs of production increase, then supply will
..............................

5. Complete:
a. When Supply equal demand it is called .
b. When Supply is greater than Demand then it is called a
and the price of the product will .
c. When Demand is greater than Supply then it is called a
and the price of the product will .

6. Draw c. on the following diagram:

7. Complete. When the Price of product increases:

a. What happens to consumer's willingness to BUY the product?

b. What happens to producer or seller's willingness to SELL the product?

Part 4:
1. Complete:
a. The economic problem is that a person or country has
wants butlimited to produce goods or
services or to buy goods and services.

b. The goal of all consumers is to maximise the they buy (satisfy) with the smallest amount of spent

c. It is assumed that as a person consumes more of one product each extra product consumed gives them satisfaction. This is called the Law of .

d. The goal of businesses is assumed to be that they aim to maximise .

e. When making choices a person must consider the and the if is greater than the then a person who is rational will the product

f. The cost of the best alternative product not bought and
consumed when we decide to consume a product is called the
cost for you give up the opportunity to buy the alternative product.

2.
a. What is the following curved diagram called? .
b. Label on the diagram the opportunity cost of increasing consumption or production of product X from A to B.

3. What is possible? Impossible? or below our possibilities? on the following diagram

Attachment:- Economics for Business.rar