Econ Chap. 1,4,5,6 practice

0.875

At price of $1.30 per pound, a local apple orchard is willing to supply 150 pounds of apples per day. At a price of $1.50 per pound, the orchard is willing to supply 170 pounds of apples per day. Using the midpoint method, the price elasticity of supply is about

and quantity both increase.

Consider the market for portable air conditioners in equilibrium. When a heat wave strikes the equilibrium price

Price elasticity of demand is 1.2, and the price of the good decreases. b. Price elasticity of demand is 0.5, and the price of the good increases. c. Price elasticity of demand is 3.0, and the price of the good decreases. d. All of the above are correct. Answer: d. All of the above are correct.

In which of the following situations will total revenue increase?

time horizon.

A key determinant of the price elasticity of supply is the

diamond earrings

Which of the following is likely to have the most price elastic demand?

inadequate enforcement of property rights.

A company that formerly produced music CDs went out of business because too many potential customers bought illegally-produced copies of the CDs instead of buying the product directly from the company. This instance serves as an example of

how much of a good all buyers are willing and able to buy at each possible price.

A market demand curve shows

(iv) only

A nonbinding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price.

an increase in price gives producers an incentive to supply a larger quantity.

A supply curve slopes upward because

binding price floor is imposed on a market.

A surplus results when a

increases today.

Elena loves orange juice. She reads in the newspaper that 20 percent of the Florida orange crop was destroyed by a late spring frost. Economists predict that the price of oranges will rise by 50 percent by the end of the year. As a result, Elena's demand for orange juice

the slope is undefined, and the price elasticity of demand is equal to 0.

For a vertical demand curve,

property rights.

For markets to work well, there must be

both externalities and market power

For which of the following problems can well-designed public policy enhance economic efficiency?

a surplus of video games will develop.

If a binding price floor is imposed on the video game market, then

inferior good

If a increase in income decreases the demand for a good, then the good is a(n)

buyers will bear most of the burden of the tax.

If a tax is imposed on a market with inelastic demand and elastic supply, then

increase in the demand for muffins.

If muffins and bagels are substitutes, a higher price for bagels would result in a(n)

the quantity supplied of labor will exceed the quantity demanded.

If the minimum wage exceeds the equilibrium wage, then

2.5 percent decrease in the quantity demanded.

If the price elasticity of demand for a good is 0.5, then a 5 percent increase in price results in a

3.6 percent increase in the quantity demanded.

If the price elasticity of demand for a good is 1.2, then a 3 percent decrease in price results in a

increase by 4%.

If the price elasticity of supply is 0.8, and price increased by 5%, quantity supplied would

1.0

On a certain supply curve, one point is (quantity supplied = 200, price = $2.00) and another point is (quantity supplied = 250, price = $2.50). Using the midpoint method, the price elasticity of supply is about

12 units.

Refer to Figure 4-13. If Producer A and Producer B are the only producers in the market, then the market quantity supplied when the price is $4 is

9 units

Refer to Figure 4-4. If Yasmine and Mercedes are the only two consumers in the market, then the market quantity demanded at a price of $12 is

means that some firms will not be able to sell all that they want

Refer to Figure 6-5. Suppose the market is initially in equilibrium. Then the government imposes a price control, as represented by the solid horizontal line on the graph. If the price control is a price floor, then the price control

31 units.

Refer to Table 4-3. If these are the only four buyers in the market, then the market quantity demanded at a price of $1 is

Table C

Refer to Table 4-5. If the four families listed in the table are the only demanders of Mt. Dew in the market, which of the following is a correct graph of the market demand?

the equilibrium price increases, and the equilibrium quantity is unchanged.

Suppose demand is perfectly inelastic, and the supply of the good in question decreases. As a result,

elastic and equal to 6.

Suppose that quantity demand falls by 30% as a result of a 5% increase in price. The price elasticity of demand for this good is

between $1 and $2.

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

Refer to Table 4-5. If the four families listed in the table are the only demanders of Mt. Dew in the market, which of the following is a correct graph of the market demand?

Table 4-5The table below shows the quantities demanded of cases of Mt. Dew per month by four families at various prices

high because buyers generally feel that they can do without it.

The income elasticity of demand for caviar tends to be

steeper the demand curve will be through a given point.

The smaller the price elasticity of demand, the

can affect today's supply.

Today, producers changed their expectations about the future. This change

decreases the demand for the other good.

Two goods are substitutes when a decrease in the price of one good

The equilibrium price would decrease, and the equilibrium quantity would increase.

What would happen to the equilibrium price and quantity of lattés if coffee shops began using a machine that reduced the amount of labor necessary to produce them?

sellers desire to produce and sell more than buyers wish to purchase.

When the price of a good is higher than the equilibrium price,

2.6

Which of the following could be the price elasticity of demand for a good for which an increase in price would decrease revenue?

0.3

Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?

Government policies are the primary forces that guide the decisions of firms and households.

Which of the following statements does not apply to a market economy?