econ midterm lsu
A consumer is currently spending all of her available income on two goods, cds and dvds. At her current rate, she is spending twice on cds than dvds. If the consumer has $120 of income and is consuming 10 cds and 2 dvds, what is the price of a cd?
$8
A manufacture produces 410 units when the market price is $8 per unit and produces 470. What is the price of elasticity using the midpoint formula?
.61
if 23% change in price results in a 21 % change in quantity supplied, the the price elasticity of supply is about
.91 and supply is elastic
Suppose a tax of $4 per unit is imposed on a good this market, Which of the following is correct?
2/3 of the burden of the tax will fall on buyer, and 1/3 of the burden of the tax will fall on sellers.
Which of the following combinations of beers and bratwurst represents a point that would lie to the interior of the consumer's budget constraint?
40 beers and 50 bratwurst
Suppose the price of elasticity of supply for cheese is .6 in the short run and 1.4 in the long run. If an increase in the demand for cheese causes the price of cheese to increase by 15%, the the quantity supplied will increase by
9% in the short run and 21% in the long run
Bundle J contains...Bundle K....
Bundle J
Which of the following is correct?
Rent control is an example of price ceiling and the min. wage is an example of a price floor.
In which market will majority of the tax burden fall on buyers?
The market shown in graph b.
Indifference curves illustrate
a consumer's preference
A price floor is
a legal minimum on the price at which a good can be sold.
College roommate and noodles
be positive, and you roommate's would be negative.
If the price of water doubles to $6, the the
budget constraint intersects the vertical axis at 36 waters
Demand is said to be price elastic if
buyers respond substantially to changes in the price of the good
price ceilings and price floors that are binding
cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price
Between point A and point B on the graph, demand is
elastic, but not perfectly elastic.
When a tax is placed on the sellers of a product, buyers pay
more and sellers receive less than they did before the tax
If two good are complements, their cross-price elasticity will be
negative
left and right gloves provide a good example of
perfect complements
A legal minimum on the price at which a good can be sold is called a
price floor
rent control
serves as an example of price ceiling
Suppose Jamie can choose between consuming two good. If we observe that Jamie's budget constraint has moved outward, the we know for certain that
she can reach a high indifference curve
For a particular good, a 12% increase in price causes a 3% decrease in quantity demanded. Which of the following statements is most likely key applicable to this good?
the good is a necessity
Cross-price elasticity of demand measures how
the quantity demanded of one good changes in response to a change in the price of another good.
If a price floor is not binding, then
there will be a shortage in the market
