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RISK: The possibility of gain or loss. Risk the calculated probability of different events happening, is usually contrasted with uncertainty the possibility that any number of things could happen. For example, uncertainty is the possibility that you could win or lose $100 on the flip of a coin. You don't know which will happen, it could go either way. Risk, in contrast, is the 50 percent chance of winning $100 and the 50 percent chance of losing $100 on the flip of the coin. You know (or think you know) that your probability of winning or losing is 50 percent because the coin has a 50 percent chance of coming up either heads or tails.
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Lesson 11: Elasticity Basics | Unit 3: Measurement
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Page: 14 of 25
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Topic:
Doing The Numbers: Midpoint
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- Our task is to calculate the price elasticity of demand using the midpoint formula.
midpoint
elasticity | = | (Q2 - Q1)
(Q2 + Q1)/2 | ÷ | (P2 - P1)
(P2 + P1)/2 |
- The values for this formula are P1 = $2.49, Q1 = 5,447 tacos, P2 = $1.99, Q2 = 6,608 tacos.
midpoint
elasticity | = | 0.19 ÷ - 0.22 | = | - 0.86 |
- This value - 0.86 indicates that the a one percent decline in the price of Tacos results in a 0.86 percent increase in quantity demanded.
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RESOURCE QUANTITY, AGGREGATE SUPPLY DETERMINANT One of three categories of aggregate supply determinants assumed constant when the short-run and long-run aggregate supply curves are constructed, and which shifts both aggregate supply curves when it changes. An increase in a resource quantity causes an increase (rightward shift) of both aggregate supply curves. A decrease in a resource quantity causes a decrease (leftward shift) of both aggregate supply curves. The other two categories of aggregate supply determinants are resource quality and resource price. Specific determinants falling into this general category include population, labor force participation, capital stock, and exploration. Anything affecting the quantity of labor, capital, land, and entrepreneurship is also included.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet hoping to buy either a computer that can play music and burn CDs or a T-shirt commemorating last Friday (you know why). Be on the lookout for celebrities who speak directly to you through your television.
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Post WWI induced hyperinflation in German in the early 1900s raised prices by 726 million times from 1918 to 1923.
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"Work is an extension of personality. It is achievement. It is one of the ways in which a person defines himself, measures his worth ‚ and his humanity. " -- Peter Drucker, author
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IGARCH
Integrated Generalized Autoregressive Conditional Heteroskedasticity
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