Ch 4-5

horizontal

A perfectly elastic supply curve is:

Their cross price elasticities are greater than zero.

If cola and iced tea are good substitutes for consumers, then it is likely that:

responsiveness of quantity demanded to a change in price.

The price elasticity of demand measures the:

a sharp increase in the demand for and construction of wood-frame homes.

The supply curve of textbooks (which are produced using paper made from trees) will shift to the left in response to:

cross-price elasticity of demand for soda is -3.

A 10 percent decrease in the price of potato chips leads to a 30 percent increase in the quantity of soda demanded. It appears that:

macaroni is an inferior good and price elasticity of supply is infinite.

A 10 percent increase in income leads to a 15% decrease in the quantity of macaroni and cheese demanded but no change in the price of macaroni and cheese. From this information, we can assume:

cross-price elasticity of demand for iced tea is -2.

A 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. It appears that:

infinite elasticity

A demand or supply curve with _______ would be horizontal in appearance.

elastic

A price cut will increase the total revenue a firm receives if the demand for its product is:

Unit Elastic

Demand is said to be _______ when the quantity demanded changes at the same proportion as the price.

Inelastic

Demand is said to be _______ when the quantity demanded is not very responsive to changes in price.

elastic

Demand is said to be _______ when the quantity demanded is very responsive to changes in price.

will increase

If labor demand is downward sloping and labor supply is upward sloping, then when labor demand rises faster than labor supply, it is expected that real wages __________ .

increase the quantity exchanged but result in no change in the price.

If the demand curve is perfectly elastic, then an increase in supply will:

equal to infinity

If the supply curve for a product is horizontal, then the elasticity of supply is:

fall and the equilibrium quantity to stay the same.

If the supply curve for housing is perfectly inelastic, then a reduction in demand will cause the equilibrium price to:

Increase wage

Improvements in the productivity of labor will tend to:

$900 billion

In 2010, Americans had about __________ outstanding in credit card debts not paid on time.

price ceilings

In contrast to goods and services markets,__________ are rare in labor markets, because rules that prevent people from earning income are not politically popular.

inelastic, elastic

Taxes on goods with _______ demand curves will tend to raise more tax revenue for the government than taxes on goods with _______ demand curves.

Price

The "law of supply" functions in labor markets; that is, a higher __________ for labor leads to a higher quantity of labor supplied.

180 million

The United States has approximately __________ credit card holders.

price

The elasticity of demand is defined as the percentage change in quantity demanded divided by the percentage change in _______.

demand, right

The labor __________ curve(s) will shift __________ if there is an increase in productivity or an increase in the demand for the final product.

Increase

The longer the time period considered, the more the elasticity of supply tends to:

increasing the price of game tickets because demand is inelastic.

The price elasticity of demand for tickets to local baseball games is estimated to be equal to 0.89. In order to boost ticket revenues, an economist would advise:

the quantity demanded of financial capital at any given interest rate will shift to the right.

When consumers and businesses have greater confidence that they will be able to repay in the future, __________ .

elastic

When economists are sketching examples of a demand or supply curve that is close to horizontal, they refer to that demand or supply curve as _______ .

the quantity demanded at that price.

Whenever there is a surplus at a particular price, the quantity sold at that price will equal:

an increase in labor productivity

Which of the following will not result in a rightward shift of the market supply curve for labor?

Technology

As the __________ complement for high-skill labor becomes cheaper, the demand curve for high- skill labor will shift to the right.

Technology

As the __________ substitute for low-skill labor becomes available, the demand curve for low-skill labor will shift to the left.

larger; decrease

Other things being equal, a __________ supply of workers tends to __________ real wages.