# on 29-Jul-2017 (Sat)

#### Flashcard 1428930301196

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#cfa #cfa-level-1 #economics #microeconomics #reading-13-demand-and-supply-analysis-introduction #study-session-4 #summary
Question
In general, elasticity is the ratio of [...].
the percentage change in the dependent variable to the percentage change in the independent variable of interest

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Economists use a quantitative measure of sensitivity called elasticity. In general, elasticity is the ratio of the percentage change in the dependent variable to the percentage change in the independent variable of interest. Important specific elasticities include own-price elasticity of demand, income elasticity of demand, and cross-price elasticity of demand.

#### Original toplevel document

SUMMARY
tion. Brokers can add value if they reduce search costs and match buyers and sellers. In general, anything that improves information about the willingness of buyers and sellers to engage will reduce search costs and add value. <span>Economists use a quantitative measure of sensitivity called elasticity. In general, elasticity is the ratio of the percentage change in the dependent variable to the percentage change in the independent variable of interest. Important specific elasticities include own-price elasticity of demand, income elasticity of demand, and cross-price elasticity of demand. Based on algebraic sign and magnitude of the various elasticities, goods can be classified into groups. If own-price elasticity of demand is less than one in absolute va

#### Flashcard 1435703315724

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#cfa #cfa-level-1 #economics #microeconomics #reading-14-demand-and-supply-analysis-consumer-demand #section-2-consumer-theory-from-preferences-to-demand-function #study-session-4-microeconomics-analysis
Question
In Consumer Choice Theory, Instead of assuming the existence of a demand curve, it derives a demand curve as an implication of assumptions [...]

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Consumer choice theory still makes assumptions, but does so at a more fundamental level. Instead of assuming the existence of a demand curve, it derives a demand curve as an implication of assumptions about preferences.

#### Original toplevel document

2. CONSUMER THEORY: FROM PREFERENCES TO DEMAND FUNCTIONS
and as a logical extension of consumer choice theory. Although consumer choice theory attempts to model consumers’ preferences or tastes, it does not have much to say about why consumers have the tastes and preferences they have. <span>It still makes assumptions, but does so at a more fundamental level. Instead of assuming the existence of a demand curve, it derives a demand curve as an implication of assumptions about preferences. Note that economists are not attempting to predict the behavior of any single consumer in any given circumstance. Instead, they are attempting to build a consistent model of aggregate m

#### Flashcard 1435761773836

Tags
#2-1-3-economic-rent #2-1-types-of-profit-measures #cfa-level-1 #economics #microeconomics #reading-15-demand-and-supply-analysis-the-firm #section-2-objectives-of-the-firm #study-session-4
Question
If quantity supplied is relatively unresponsive ( inelastic ) to price changes, then a potential condition exists in the market for [...].
economic rent

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If quantity supplied is relatively unresponsive ( inelastic ) to price changes, then a potential condition exists in the market for economic rent.

#### Original toplevel document

2. OBJECTIVES OF THE FIRM

#### Annotation 1646433013004

 #reading-9-probability-concepts The expected value of a random variable is its probability-weighted average of the possible outcomes. When combined with probability, the expected value simply factors in the relative chances of each event occurring, in order to determine the overall result. The more probable outcomes will have a greater weighting in the overall calculation.

Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable
The expected value of a random variable is its probability-weighted average of the possible outcomes. When combined with probability, the expected value simply factors in the relative chances of each event occurring, in order to determine the overall result. The more probable outcomes will have a greater weighting in the overall calculation. For a random variable X, the expected value of X is denoted E(X). E(X) = P(x 1 ) x 1 + P(x 2 ) x 2 + ... + P(x n ) x n In investme

#### Flashcard 1646434585868

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Question
For a random variable X, the expected value of X is denoted [...]
E(X).

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Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable
ed with probability, the expected value simply factors in the relative chances of each event occurring, in order to determine the overall result. The more probable outcomes will have a greater weighting in the overall calculation. <span>For a random variable X, the expected value of X is denoted E(X). E(X) = P(x 1 ) x 1 + P(x 2 ) x 2 + ... + P(x n ) x n In investment analysis, forecasts are frequently made using expected value, for example,

#### Flashcard 1646437207308

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Question
E(X) = [...]
P(x1) x1 + P(x2) x2 + ... + P(xn) xn

status measured difficulty not learned 37% [default] 0
Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable
ccurring, in order to determine the overall result. The more probable outcomes will have a greater weighting in the overall calculation. For a random variable X, the expected value of X is denoted E(X). <span>E(X) = P(x 1 ) x 1 + P(x 2 ) x 2 + ... + P(x n ) x n In investment analysis, forecasts are frequently made using expected value, for example, the expected value of earnings per share, dividend per share, rate of return, etc.

#### Flashcard 1646439828748

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Question
Expected value represents [...] of all possible outcomes.
the central value

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Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable

#### Annotation 1646446906636

 #reading-9-probability-concepts An easier way to interpret expected value is as follows: If a number of such concerts were held, the organizers can expect to achieve a profit of $14,000 for each concert. So expected values actually make more sense when viewed over the long run. status not read Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable fit that will be made the remaining 50% of the time more than offsets this and creates an overall expected profit. However, with a one-off concert, there is a major risk involved, particularly in the event of unfavorable weather. <span>An easier way to interpret expected value is as follows: If a number of such concerts were held, the organizers can expect to achieve a profit of$14,000 for each concert. So expected values actually make more sense when viewed over the long run. The variance of a random variable is the expected value (the probability-weighted average) of squared deviations from the random variable's expected value. &

#### Flashcard 1646448479500

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Question
Given 3 probabilities to weight an expected value, which one of the outcomes wil happen?
none of the outcomes actually produces the amount expected

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Subject 6. Expected Value, Variance, and Standard Deviation of a Random Variable
40,000 + 24,000 + 0 = $64,000 Thus, the organizers can expect to take in$64,000. Since it costs $50,000 to stage the event, this translates to a profit of$14,000, so they should certainly go ahead with the venture. <span>It's important to realize that none of the outcomes actually produces an amount of \$64,000. This is simply the weighted average of all possible outcomes. Although there is a 50% chance of a loss the big profit that will be made the remaining 50% of the time more than offsets t

#### Annotation 1646509821196

 There is no doubt that mnemonic techniques are one of the most important methods and methodologies used in education. However, nowadays these methods seem to be unremembered and seldom used by teachers or students.