Week 1 Knowledge Check

Knowledge Check Week 1The material presented below is not meant to be a comprehensive list of all you need to shaft in the content sports stadium. Rather it is a starting point for structure your knowledge and skills. Additional study materials are recommended in each area below to help you master the material. Personalized Study Guide Results crisscross 12 / 12 Concepts Mastery Questions Pricing Decisions snow% Market Systems degree centigrade% Market Equilibrium 100% Concept Pricing Decisions Mastery 100% Questions 1 . Revenue increases when A. roducer surplus increases Correct Producer surplus is the inequality between the minimum equipment casualty the producer is willing to receive and what they really receive. The surplus is their profit, and the larger the surplus, the greater their profit on the good. When it decreases, the producer receives a terms closer to the minimum acceptable. The consumer surplus measures what the consumer is willing to pay and that prices difference from the market price. The closer to the market price, the higher the consumer surplus, as consumers are spending ess than they are willing to, and the less spent, the lower the gross will be for the good. Materials Producer Surplus 2 . An increase in the price of an inelastic goods C. increases revenues Correct Inelastic goods are necessities that consumers continue to buy even when the price increases. This increases the revenue, as more than is paid for each good. The character change in price increases faster than the change in quantity, which whitethorn remain constant. When more is paid for a good or a service, revenue increases. Materials Price Elasticity and the Total-Revenue Curve Inelastic Demand 3 . Price elasticity of Demand increases whe C. people become more price sensitive over time Correct Price elasticity of remove measures the theatrical role change in quantity demanded divided by the percentage change in price. Price elasticity is either inel astic or elastic. As the price elasticity of demand coefficient rises, price elasticity becomes more elastic. A low price elasticity coefficient relates to an item that has very a couple of(prenominal) substitutes, which causes people to be less sensitive to a change in price, such as in gasoline or medicine (inelastic demand, Ed