ECON 202 Exam 1
The slope of a budget constraint represents:
the opportunity cost of one good in terms of another.
Suppose that the price of a money clip increases from $0.75 to $0.90 and quantity supplied rises from 8,000 units to 10,000 units. Use the midpoint formula to calculate the price elasticity of supply.
1.22
Suppose Tinsel Town Videos lowers the price of its movie club membership by 10 percent and as a result, CineArts Videos experienced a 16 percent decline in its movie club membership. What is the value of the cross-price elasticity between the two movie club memberships?
1.6
The price elasticity of supply for umbrellas is 2. Suppose you're told that following a price increase, quantity supplied increased by 30 percent. What was the percentage change in price that brought this about?
15 percent
Suppose the value of the price elasticity of supply is 4. What does this mean?
A 1 percent increase in the price of the good causes quantity supplied to increase by 4 percent.
Which of the following best describes the difference between a demand curve and a demand schedule?
A demand curve is a graphical representation of the relationship between the quantity of a good and its price, whereas a demand schedule is a tabular representation.
Market equilibrium occurs where supply equals demand.
False
Which of the following factors is likely to lead to an increase in the quantity demanded of pens? A rise in the incomes of all consumers A fall in the price of pens A fall in the price of paper A fall in the incomes of all consumers
A fall in the price of pens
Which of the following is most likely to be an example of causation? A firm producing CFLs installs new machinery. The per-day production of CFLs increases. A student wins money by scratching a ticket with a particular coin. He decides to scratch all tickets with the same coin in the future. The crime rate is high in a country. The literacy rate is high as well. A soccer player scores 4 goals when he wears red socks. He concludes that the red socks helped him score the goals.
A firm producing CFLs installs new machinery. The per-day production of CFLs increases.
Which of the following is likely to cause the demand curve for cars to shift to the left? An increase in the economy's national income A rise in the price of gasoline A rise in the price of cars An increase in the cost of production leading to an increase in the price of cars
A rise in the price of gasoline
Why has the number of people living on farms gone down so drastically from 1900? Investment in capital such as tractors Process innovations such as herd immunization All of these Process innovations such as mechanized planting and harvesting
All of these
What is the difference between an "increase in supply" and an "increase in quantity supplied"?
An "increase in supply" means the supply curve has shifted to the right while an "increase in quantity supplied" refers to a movement along a given supply curve in response to an increase in price.
Which of the following is likely to shift the market demand curve for school textbooks to the right? An increase in school tuition fees A fall in the price of school textbooks An increase in the enrollment rates in high schools A fall in the total income of all consumers
An increase in the enrollment rates in high schools
Which of the following is the correct way to describe equilibrium in a market?
At equilibrium, quantity demanded equals quantity supplied.
The cost of producing cigarettes in the U.S. has increased and at the same time, more and more Americans are choosing to not smoke cigarettes. Which of the following best explains the effect of these events in the cigarette market?
Both the supply and demand curves have shifted to the left. As a result, there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price.
In recent years the cost of producing organic produce in the U.S. has decreased largely due technological advancement. At the same time, more and more Americans prefer organic produce over conventional produce. Which of the following best explains the effect of these events in the organic produce market?
Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price.
Positive analysis is concerned with "what ought to be," while normative analysis is concerned with "what is."
False
Let D= demand, S = supply, P = equilibrium price, Q= equilibrium quantity. What happens in the market for walnuts if the Centers for Disease Control and Prevention announces that consuming a half cup of walnuts each week helps to lower bad levels of cholesterol?
D increases, S no change, P and Q increases
A shortage is defined as the situation that exists when the quantity of a good supplied is greater than the quantity demanded.
False
Consider the following statement: "The problem with economics is that it assumes that consumers and firms always make the correct decisions. But we know that everyone makes mistakes." What is the most correct response to this statement?
Economics assumes that consumers and firms are rational, not that they always make the right decisions.
Which of the following statements is true of the scientific method?
Empirical arguments are more credible when they are based on a large data set.
When Audrina raised the price of her homemade cookies, her total revenue increased. This suggests that the demand for Audrina's cookies is elastic.
False
Which of the following is a normative economic statement? Rising corn prices have increased the price of corn-based ethanol. With rising home prices and falling mortgage interest rates, the amount of home foreclosures has decreased. Farmers should not be allowed to grow and sell genetically-modified crops. The federal government is considering increasing regulations on the use of fossil fuels to promote the use of wind power.
Farmers should not be allowed to grow and sell genetically-modified crops.
Which of the following is a positive economic statement? The government should implement a national consumption tax. The U.S. government should increase regulations on the banking industry. The standard of living in the United States is too low. If the price of beef falls, a larger quantity of it will be bought.
If the price of beef falls, a larger quantity of it will be bought.
Which of the following is a positive economic statement? The government should revamp the health care system. The U.S. government should not have bailed out U.S. auto manufacturers. The standard of living in the United States should be higher. If the price of iPhones falls, a larger quantity of iPhones will be purchased.
If the price of iPhones falls, a larger quantity of iPhones will be purchased.
Which of the following is a normative economic statement? Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable. The state of Texas is considering increasing funds for light-rail development to promote the use of public transportation. Rising global demand for coal has led to increases in the price of coal. With rising mortgage rates and rising unemployment rates, the number of unsold homes has increased.
Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.
Which of the following is a positive economic statement? Raising the tax on gasoline raises the selling price of gasoline. The government should revamp its immigration policies. The government should ban the production and sale of incandescent light bulbs. U.S. citizens should only buy products which are produced in the United States.
Raising the tax on gasoline raises the selling price of gasoline.
Which of the following statements is true? Rational economic agents maximize more than just monetary income. An individual does not require information to make optimal decisions. The principle of optimization is only accurate when it comes to making monetary decisions. It is not necessary to consider the risks of a particular alternative while making an optimal decision.
Rational economic agents maximize more than just monetary income.
Let D= demand, S = supply, P = equilibrium price, Q= equilibrium quantity. What happens in the market for tropical hardwood trees if the governments restrict the amount of forest lands that can be logged?
S decreases, D no change, P increases, Q decreases
Which of the following is a positive economic statement? People should not buy SUVs. Foreign workers should not be allowed to work for lower wages than the citizens of a country. The government should mandate electric automobiles. Scarcity necessitates that people make trade-offs.
Scarcity necessitates that people make trade-offs.
Assume there is a shortage in the market for digital music players. Which of the following statements correctly describes this situation?
Some consumers will be unable to obtain digital music players at the market price and will have an incentive to offer to buy the product at a higher price.
Soo Jin shares a one bedroom apartment with her classmate. Her share of the rent is $700 per month. She is considering moving to a studio apartment which she will not have to share with anyone. The studio apartment rents for $950 per month. Recently, you ran into Soo Jin on campus and she tells you that she has moved into the studio apartment. Soo Jin is as rational as any other person. As an economics student, you rightly conclude that
Soo Jin figures that the additional benefit of having her own place (as opposed to sharing) is at least $250.
The Internet has created a new category in the book selling market, namely, the "barely used" book. How does the availability of barely used books affect the market for new books?
The demand curve for new books shifts to the left.
Which of the following statements is true? The more narrowly we define a market, the more elastic the demand for a product will be. The demand curve for a necessity is more elastic than the demand curve for a luxury. The more time that passes the more inelastic the demand for a product becomes. In general, if a product has few substitutes it will have an elastic demand.
The more narrowly we define a market, the more elastic the demand for a product will be.
Which of the following is a normative economic statement? The price of gasoline is too high. When the price of gasoline rises, transportation costs rise. The current high price of gasoline is the result of strong worldwide demand. When the price of gasoline rises, the quantity of gasoline purchased falls.
The price of gasoline is too high.
Which of the following is a normative economic statement? When the price of wheat falls, the cost of wheat-based products falls. The current low price of wheat is the result of increased worldwide supply. The price of wheat is too low. When the price of wheat falls, the quantity of wheat purchased rises.
The price of wheat is too low.
Which of the following is evidence of a shortage of walnuts? The equilibrium price of walnuts falls due to a decrease in demand. The price of cashews is lowered in order to make up for the walnut shortage. Firms lower the price of walnuts. The quantity demanded of walnuts is greater than the quantity supplied.
The quantity demanded of walnuts is greater than the quantity supplied.
In February, market analysts predict that the price of titanium will rise in March. What happens in the titanium market in February, holding everything else constant?
The supply curve shifts to the left.
In October, market analysts predict that the price of platinum will fall in November. What happens in the platinum market in October, holding everything else constant?
The supply curve shifts to the right.
Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. What is a reason for this difference in price?
There are more letters available for collectors to buy that were written by Lincoln than there are letters that were written by Booth
Danielle Ocean pays for monthly pool maintenance for her home swimming pool. Last week the owner of the pool service informed Danielle that he will have to raise his monthly service fee because of increases in the price of pool chemicals. How is the market for pool maintenance services affected by this?
There is a decrease in the supply of pool maintenance services.
"An increase in the price of gasoline will increase the demand for hybrid vehicles." This statement is an example of a positive economic statement.
True
In response to a surplus the market price of a good will fall; as the price falls, the quantity demanded will increase and quantity supplies will decrease until equilibrium is reached.
True
Which of the following statements is true? Total revenue will equal zero when the demand for a product is unit elastic. Whenever a firm increases its quantity sold its revenue will increase. Whenever a firm raises its price its total revenue will increase. When a firm lowers its price its total revenue may either increase or decrease.
When a firm lowers its price its total revenue may either increase or decrease.
Which of the following examples best describes the Law of Demand? When the price of gasoline increased, the demand for cars fell. When Alex received a pay hike, his consumption of all goods increased. When the price of tea increased, the quantity demanded of tea decreased. When the price of Nokia phones increased, the demand for Samsung phones increased.
When the price of tea increased, the quantity demanded of tea decreased.
Microsoft charges a price of $599 for a copy of Windows 7. Is this pricing decision rational?
When we assume the managers at Microsoft have used all available information and have weighed all known benefits and costs, we are assuming rationality.
A change in the slope of a budget constraint indicates:
a change in either good that causes a change in the opportunity cost
A budget constraint is a straight line because:
a consumer faces a fixed price of both goods that do not change with changes in consumption.
A decrease in the demand for soft drinks due to changes in consumer tastes, accompanied by an increase in the supply of soft drinks as a result of reductions in input prices, will result in
a decrease in the equilibrium price of soft drinks; the equilibrium quantity may increase or decrease
Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase?
a decrease in the price of cattle
Which of the following would cause the equilibrium price of white bread to decrease and the equilibrium quantity of white bread to increase?
a decrease in the price of flour
Of the following, which is the best example of good with a perfectly inelastic demand? the demand for a college education by a student who has a full scholarship to an Ivy League school the demand for gasoline a diabetic's demand for insulin the demand for tickets in New York City when the Mets or Yankees are in the World Series
a diabetic's demand for insulin
If the demand and supply curves for a commodity both shift to the left and the shift in demand is less than the shift in supply, then in comparison to the initial equilibrium, the new equilibrium will be characterized by:
a higher price and a lower quantity
An increase in the price of pineapples will result in
a larger quantity of pineapples supplied.
Assume that the supply curve for a commodity shifts to the right and the demand curve shifts to the left, both by the same degree. Then, in comparison to the initial equilibrium, the new equilibrium will be characterized by:
a lower price and the same quantity
If a 5 percent increase in income leads to a 10 percent increase in quantity demanded for airline travel, then airline travel is
a luxury
If opportunity costs are constant, the production possibilities frontier would be graphed as
a negatively sloped line
If a decrease in income leads to a decrease in the demand for mac and cheese, then mac and cheese is a complement. a neutral good. a normal good. a necessity.
a normal good.
In 2004, hurricanes damaged a large portion of Florida's orange crop. As a result of this, many orange growers were not able to supply fruit to the market. Consider this new, post-hurricane situation under previous, pre-hurricane equilibrium price. We would expect to see:
a shortage of oranges
A model refers to:
a simplified description, or representation, of reality.
A supply schedule
a table that shows the relationship between the price of a good and the quantity supplied
Which of the following items is likely to have the highest income elasticity of demand? a bus ride a vacation home in the Swiss Alps a meal at Taco Bell a tank of gasoline
a vacation home in the swiss alps
The highest valued alternative that must be given up to engage in an activity is the definition of
opportunity cost
Which of the following would cause both the equilibrium price and equilibrium quantity of cotton (assume that cotton is a normal good) to increase?
an increase in consumer income
Which of the following would cause a decrease in the equilibrium price and an increase in the equilibrium quantity of salmon?
an increase in supply
Which of the following would cause an increase in the equilibrium price and an increase in the equilibrium quantity of watermelons?
an increase in supply and an increase in demand greater than the increase in supply
Holding everything else constant, a decrease in the price of bicycles will result in an increase in the demand for bicycles. an increase in the quantity of bicycles demanded. a decrease in the supply of bicycles. a decrease in the quantity of bicycles demanded.
an increase in the quantity of bicycles demanded.
Which of the following would cause a decrease in the supply of milk?
an increase the price of a product that producers sell instead of milk
If a decrease in income leads to an increase in the demand for sardines, then sardines are an inferior good. a necessity. a neutral good. a normal good.
an inferior good.
economists assume that individuals
are rational and respond to incentives
Trinh quits his $80,000-a-year job to become a full-time volunteer at a museum. What is the opportunity cost of his decision?
at least $80,000
Trinh quits his $80,000 a year job to become a full time volunteer at a museum. What is the opportunity cost of his decision?
at least $80,000
John has two hours of free time this evening. He ranked his alternatives, first go to a concert, second go to a movie, third study for an economics exam, and fourth answer his e-mail. What is the opportunity cost of attending the concert for John?
attending a movie
We can derive the market demand curve for gold earrings.... by adding the prices each gold earring consumer is willing to pay for each quantity. by adding horizontally the individual demand curves of each gold earring consumer. by adding vertically the quantity demanded of each gold earring consumed at each price. only if the tastes of all gold earring consumers are similar.
by adding horizontally the individual demand curves of each gold earring consumer.
Demand for a luxury item, such as a yacht, is likely to be
both income elastic and price elastic
If a consumer purchases any combination of goods and services on his ________, he will exhaust his income completely.
budget constraint
Causation occurs when:
change in one variable is the reason for the change in another variable.
If the cross-price elasticity of demand for computers and software is negative, this means the two goods are
complements
________ is the difference between the willingness to pay and the price paid for a good. Revenue Consumer surplus Producer surplus Seller's profit
consumer surplus
If the price of a good increases, ________. the budget constraint shifts to the right the consumer surplus increases the budget constraint shifts to the left the consumer surplus decreases
consumer surplus decreases
An article in the Wall Street Journal in early 2001 noted two developments in the market for laser eye surgery. The first development concerned side effects from the surgery, including blurred vision. The second development was that the companies renting eye-surgery machinery to doctors had reduced their charges. In the market for laser eye surgeries, these two developments
decreased demand and increased supply, resulting in a decrease in the equilibrium price and an uncertain effect on the equilibrium quantity of laser eye surgeries.
The ________ plots the relationship between prices and the quantity that buyers are willing to purchase.
demand curve
An outward shift of a nation's production possibilities frontier represents
economic growth
A service station owner in Staten Island, New York, was worried that raising the price of gasoline would cause the quantity demanded to fall by so much that he would be in a worse situation than if he did not raise the price. If raising the price of gasoline would cause the owner to receive less total revenue from the sale of gasoline, the demand for gasoline is
elastic
If at a price of $24, Octavia sells 36 home-grown orchids and at $30 she sells 24 home-grown orchids, the demand for her orchids is
elastic
Economists use the concept of ________ to measure how one economic variable, such as quantity, responds to a change in another economic variable, such as price.
elasticity
The opportunity cost of going to an outdoor music festival is
equal to the highest value of an alternative use of the time and money spent on the festival.
Economists assume that rational behavior is useful in explaining choices people make
even though people might not behave rationally at all times
Marginal utility is the
extra satisfaction received from consuming one more unit of a product.
All else equal, as the price of a product falls, the quantity supplied increases.
false
Because the demand for illegal drugs is inelastic and the supply is elastic, policies that reduce supply in the illegal drug market reduce revenue for drug dealers.
false
Because the supply of low-quality guns is very elastic, gun buy-back programs in a single city will reduce the number of guns by a large amount.
false
Government policies will have their intended effect irrespective of the laws of supply and demand.
false
Suppose the absolute value of the price elasticity of demand for basketball game tickets on your campus is greater than 1. Increasing ticket prices will increase the total revenue from ticket sales.
false
The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.
false
An item has utility for a consumer if it
generates enjoyment or satisfaction
A good is said to have a relatively elastic demand if the value of price elasticity is:
greater than 1
An omitted variable is a variable that:
has been left out, and if included, would explain why the variables considered in a study are correlated.
Price elasticity of demand measures
how responsive quantity demanded is to a change in price.
A change in the price of a good has two effects on the quantity consumed. What are these effects?
income effect and the substitution effect
Which of the following was not mentioned in the video as a driver of economic growth? Product innovation Increased demand Capital investment Process innovation
increased demand
As a consumer spends a larger share of his income on a particular good, the price elasticity of demand for that good:
increases
A production possibilities frontier with a bowed-outward shape indicates the possibility of inefficient production. constant opportunity costs as more and more of one good is produced. increasing opportunity costs as more and more of one good is produced. decreasing opportunity costs as more and more of one good is produced.
increasing opportunity costs as more and more of one good is produced.
If tolls on a toll road can be raised significantly before commuters will consider using a free alternative, demand for using the toll road must be
inelastic
When the price of tortilla chips rose by 10 percent, the quantity of tortilla chips sold fell 4 percent. This indicates that the demand for tortilla chips is
inelastic
Economists assume that the goal of consumers is to
make themselves as well off as possible
Which of the following is an example of capital? Washington, D.C. Kyle Field smartphones self checkout lines
kyle field
The demand for all carbonated beverages is likely to be ________ the demand for Dr. Pepper.
less elastic than
If demand is inelastic, the absolute value of the price elasticity of demand is
less than one
The extra cost associated with undertaking an activity is called
marginal cost
The demand by all the consumers of a given good or service is the ________ for the good or service. law of demand quantity demanded market demand scheduled demand
market demand
The production possibilities frontier shows the ________ combinations of two products that can be produced in a particular time period with available resources.
maximum attainable
The larger the share of a good in a consumer's budget, holding everything else constant, the
more price elastic in a consumer's demand
The best alternative use of a resource is referred to as its:
opportunity cost
Suppose that some investors have decided that economic and financial uncertainty have made the prospect of investing in domestic stock markets more risky than investing in foreign stock markets, and therefore choose to invest in foreign markets. By using all available information as they act to achieve their goals, these investors are exemplifying the economic idea that
people are rational
Holding all other personal characteristics-such as age, gender, and income-constant, economists would expect that
people with health insurance are more likely to be overweight than people without health insurance.
If a firm raised its price and discovered that its total revenue fell, then the demand for its product is
relatively elastic
If firms do not increase their quantity supplied when price changes, then supply is
perfectly inelastic
If quantity of tea is measured on the horizontal axis and quantity of coffee is measured on the vertical axis, an increase in the price of coffee will cause the budget constraint to:
pivot leftward (in) along the vertical axis
If quantity of milk is measured on the horizontal axis and quantity of juice is measured on the vertical axis, a decrease in the price of milk will cause the budget constraint to:
pivot rightward (out) along the horizontal axis
A decrease in the price of either one or the other good will cause a consumer's budget constraint to:
pivot rightward (pivot out)
If the price of the good measured along the vertical axis increases without a change in the price of the good measured along the horizontal axis, the consumer's budget constraint:
pivots leftward without a change in the intercept on the horizontal axis.
Economic models do all of the following except: make economic ideas explicit and concrete for use by decision makers. simplify some aspect of economic life. answer economic questions. portray reality in all its minute details.
portray reality in all its minute details
The price elasticity of an upward-sloping supply curve is always
positive
As the ________ increases, ________.
price of a good; its quantity demanded decreases
Assembly lines are an example of: Capital investment Product innovation All of these Process innovation
process innovation
Economics does not study correct or incorrect behaviors but rather it assumes that economic agents behave ________, meaning they make the best decisions given their knowledge of the costs and benefits.
rationally
A budget constraint
refers to the limited amount of income available to consumers to spend on goods and services.
If a 35 percent increase in price of golf balls led to an 42 percent decrease in quantity demanded, then the demand for golf balls is
relatively elastic
occurs when the direction of cause and effect is mixed up in a study.
reverse causality
Suppose when Nablom's Bakery raised the price of its breads by 10 percent, the quantity demanded fell by 15 percent. What was the effect on sales revenue?
sales revenue decreased
One of the basic facts of life is that people must make choices as they try to attain their goals. This unavoidable fact comes from a reality an economist calls
scarcity
Which of the following is a process innovation? airports Lasik eye surgery smartphones self checkout lines
self checkout lines
Economic decline (negative growth) is represented on a production possibilities frontier model by the production possibility frontier
shifting inward
Amy can study for an hour or spend that hour sleeping or going out for dinner. If she decides to study for the hour, the opportunity cost of the hour spent studying is
sleeping or going out for dinner, whichever she would have preferred the most.
A decrease in the price of GPS systems will result in
smaller quantity of GPS systems supplied
Suppose that when the price of strawberries decreases, Simone increases her purchase of whipped cream. To Simone strawberries and whipped cream and substitutes. strawberries and whipped cream are complements. strawberries are a normal good and whipped cream is an inferior good. strawberries and whipped cream are normal goods.
strawberries and whipped cream are complements.
Suppose at the going wage rate of $20 per hour, firms can hire as many hours of janitorial services as they desire. If any firm tries to lower the wage rate to $19, it will not be able to hire any janitor. What does this indicate about the supply curve for janitorial services?
supply is perfectly elastic
The restriction that a consumer's total expenditure on goods and services purchased cannot exceed the income available is referred to as
the budget constraint
The substitution effect of an increase in the price of peaches is
the change in the quantity demanded that results from a change in the price of peaches, making peaches more expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.
By definition, economics is the study of
the choices people make to attain their goals, given their scarce resources
If the absolute value of the price elasticity of demand for aspirin equals 0.8 then
the demand for aspirin is inelastic.
Suppose a decrease in the supply of bottled water results in a decrease in revenue. This indicates that
the demand for bottled water is inelastic in the price range considered.
The principle of opportunity cost is that
the economic cost of using a factor of production is the alternative use of that factor that is given up.
When demand is elastic, a fall in price causes total revenue to rise because
the increase in quantity sold is large enough to offset the lower price
Assume that an individual spends his income on sweaters and shirts. If the price of a sweater increases:
the opportunity cost of buying sweaters increases
If the demand for cell phone service is inelastic, then
the percentage change in quantity demanded is less than the percentage change in price (in absolute value).
The price elasticity of supply is equal to
the percentage change in quantity supplied divided by the percentage change in price.
One would speak of a change in the quantity of a good supplied, rather than a change in supply, if
the price of the good changes.
A change in all of the following variables will change the market demand for a product except tastes. population and demographics. income. the price of the product.
the price of the product.
The law of demand implies, holding everything else constant, that as the price of bagels increases,
the quantity of bagels demanded will decrease
If, in the market for oranges, the supply has increased then
the supply curve for oranges has shifted to the right.
In 2004, hurricanes destroyed a large portion of Florida's orange and grapefruit crops. In the market for citrus fruit
the supply curve shifted to the left resulting in an increase in the equilibrium price.
If in the market for peaches the supply curve has shifted to the left,
the supply of peaches has decreased.
Economists assume that people are rational in the sense that
they use all information available as they take actions intended to reach their goal
Without an increase in the supplies of factors of production, how can a nation achieve economic growth?
through technological advancement which enables more output with the same quantity of resources
An increase in the quantity of a product supplied is caused by an increase in the price of the product.
true
Because the demand for illegal drugs is inelastic and the supply is elastic, policies that reduce supply in the illegal drug market do not reduce equilibrium quantity very much.
true
Quantity supplied refers to the amount of a good or service that a firm is willing and able to supply at a given price.
true
When voluntary exchange takes place, both parties gain from the exchange.
true
Economists assume that rational people do all of the following except
undertake activities that benefit others or hurt themselves
A decrease in the equilibrium price for a product will result
when there is an increase in supply and a decrease in demand for the product
If the demand for a product is perfectly inelastic, a decrease in the price of the product
will decrease total revenue
On Saturday morning, you rank your choices for activities in the following order: go to the library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to go to the library. Your opportunity cost is
working out at the gym.