ECON review (Final)
which of the following shifts supply curve rightward?
a decrease in the price factor of production used to produce the good
supposed the government wants to encourage people to exercise more, so it imposes a binding price ceiling on the market for in home treadmills. As a result,
a shortage for treadmills will develop
which of the following observations would be consistent with the imposition of a binding price?
a smaller quantity of the good is bought and sold
(12) when production is 3 units with a price of $3, the consumer surplus equals...
a+b
a price ceiling is a price...
above which a seller cannot legally sell
The "law of demand" predicts that, other things being equal...
an increase in the price of pizza decreases the quantity of pizza demanded
marginal benefit is the benefit received from...
consuming one more unit of a good or service
A rise in the price of a good causes producers to supply more of the good. This statement illustrates...
The law of supply
Supply is elastic if...
a 1 percent change in price leads to a larger percentage change in quantity supplied
If the supply curve is vertical, the the supply is
perfectly inelastic
An increase in the number of suppliers in a market results in a ...
rightward shift in the supply curve.
Suppose that people find out that eating more fish improves their health, leading them to increase their demand for fish. As a result, the equilibrium price of fish ____ and the equilibrium quantity ______.
rises and increases
when the demand increased, the equilibrium price ______ and the equilibrium quantity _____.
rises; increased
The law of demand implies the demand curves...
slope down
The law demanded states that, other things remaining the same, the higher the price of a good the...
smaller is the quantity of the good demanded
People buy more of good 1 when the price of good 2 rises. These goods are...
substitutes
Good a & good b are substitutes in production. The demand for Good a increases so that the price of Good a rises. The increase in the price of Good a shifts the...
supply curve of Good B shifts leftward
if the price is above the equilibrium price, then there is a...
surplus, and the market forces will operate to a lower price.
(9)the figure above shows Clara's demand for CDs. The price for a CD is $15. Which statement is true?
when Clara buys 6 CDs, she receives a total of $45 of consumer surplus
If OPEC, a group of oil producing nations, cut oil production to increase the total revenue, OPEC presumes the demand for oil is....
inelastic
if a 20 percent increase in the price of a used car results in a 10 percent decrease in the quantity of used car demanded, then the demand for used cars is...
inelastic
if the price elasticity is between 0 and 1, the demand is
inelastic
if the demand for a good is perfectly elastic, the price elasticity of demand is _________ and the demand curve is _________.
infinite; horizontal
A local transit authority charges $1 for a bus ride. An economics study suggests that in the price range from $0.50 to $1.50, the elasticity of demand for bus trips is 1.1. To increase its revenue, the transit authority should
lower the fare
The value of a good is equal to the...
maximum price you are willing to pay
If the price of a CD is equal to the equilibrium price, there will be ______ of CDs and the price will ______.
neither surplus or shortage; no change
if the demand for a good is elastic, then...
people substantially decrease the quantity of the good they buy if its price increases by a small percentage.
Price elasticity of demand is defined as the magnitude of the...
percentage change in price divided by the percentage change in quantity demanded.
The price elasticity of supply is calculated as the...
percentage change in quantity supplied divided by the percentage change in price.
Marvin loves chocolate truffles. As the price of a chocolate truffle increases from $1 to $2 to $3, Marvin continues to buy a dozen chocolate truffles every week. Marvin's demand for chocolate truffles is ________.
perfectly inelastic
In a supply and demand figure, the equilibrium price and quantity are found at the...
point where quantity supplied equals quantity demanded.
Suppose the price of burgers increases from $2 to $3 each. The degree to which quantity demanded responds to this price increase depends on the...
price elasticity of demand.
If the demand curve for bottled water shifts rightward and the supply curve for bottled water shifts leftward, the equilibrium...
price of bottled water definitely increases.
The price elasticity of demand for furniture is estimated at 1.3. The value means a one percent increase in the...
price of furniture will decrease the quantity of furniture demand by 1.3 percent.
Producer surplus is the _____ summed over the quantity sold.
price received for a good minus marginal cost.
Producers' total revenue will increase if
price rises and demand is inelastic
if the demand for a good is elastic, when the price increases the....
quantity demanded will decrease by a greater percentage than the price increased.
The elasticity of supply measures the sensitivity of...
quantity supplied to a change in price.
(8) the figure above shows Clara's demand for CDs. The price for a CD is $15, then Clara...
receives no consumer surplus from the 6th CD
(8) the figure above shows Clara's demand for CDs. The price for a CD is $15. Which statement is true?
receives no consumer surplus on the 6th CD she pays
if good a is a normal good and income increases, the equilibrium price of a _____ and the equilibrium quantity of a _______.
rises; increases
A price below the equilibrium price results in...
shortage
if the quantity supplied exceeds the quantity demanded then there is a...
surplus, and the price is above the equilibrium price
Sweatshirts and t-shirts are compliments in consumption and the price of a sweathsirt increases. As a result the demand for...
t-shirts will decrease, that is, the demand curve will shift leftward.
A change in which of the following shifts demand curve?
taste and preferences of consumers
(11) the above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, the gallon that gives Dana exactly zero consumer surplus is...
the 12th gallon
for many goods, the price elasticity of demand increases over time after a price hike because....
the ability to find good substitutes for the product whose price rose increases over time.
The quantity demanded is...
the amount of a good that consumers plan to purchase at a particular price
if the price of an x-box player falls, then the market of x-box games...
the demand curve for x-box games shifts rightward
(30) If the demand curve is D2, then...
the equilibrium price will be P1 and the equilibrium quantity will be Q2
Marginal cost is best defined as...
the extra cost of producing one more unit of output
A fall in the price of a good causes producers to reduce the quantity of the good they are willing to produce. The fact illustrates...
the law of supply
An important determinant of the price elasticity of supply is...
the time period firms have to adjust to a new price
if a price ceiling is not binding, then...
there will be no effect on the market price or quantity sold.
Consumers expect that the price of a gallon of gasoline will rise next week. As a result,
today's demand for gasoline increases
Consumer surplus is...
value of a good minus the price paid for summed over the quantity bought
a straight line demand curve along which the price elasticity of demand equals 0 is one that...
vertical
which of the following decreases the supply of restaurant meals?
waiters get a pay raise
If technological advances lower the cost of computer chips, in the market for computers the equilibrium price will __________ and the equilibrium quantity will ____________.
fall; increase
when the demand for a good decreases, its equilibrium price _____ and equilibrium quantity_____.
falls; decreases
demand curve for fruit snacks... which movement reflects an increase in demand
from point a to point b
demand curve for fruit snacks... which reflects a decrease in demand
from point a to point c
demand curve for fruit snacks... which movement reflects an increase in income if fruit snacks are a normal good?
from point a to point d
demand curve for fruit snacks... which movement reflects how consumers would react to an increase in the price of fruit snacks that is expected to occur in the future?
from point a to point d
demand curve for fruit snacks... which movement reflects a decrease in population?
from point a to point e
demand curve for fruit snacks... which movement reflects a decrease in quantity demanded but NOT a decrease in demand?
from point a to point e
demand curve for fruit snacks... which movement reflects an increase in income if fruit snacks are an inferior good?
from point a to point e
which goods have more elastic demands?
goods with many substitutes
Normal goods are those for which demand decreases as...
income decreases
If the demand is inelastic, an increase in the price will
increase total revenue
As a result of an increase in the supply of a good, the equilibrium quantity ____ and the equilibrium price _______.
increases; falls
A price ceiling can result in which of the following
inefficiency, black markets and increase search activities.
(14) using the table... Fred's marginal cost over the 200th slice of pizza is...
$2.50
(18) if the market price is $100 per ton, then the firm's producer surplus on the second to of wheat is...
$25
(10) the figure above show's Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, the the maximum that Dana is willing to pay for the 8th gallon of ice cream is....
$3
(4) Based on the table, what is Barry's marginal benefit from the 40th slice of pizza?
$3
Nick can purchase each milkshake for $2. For the first milkshake purchased Nick is willing to pay $4, for the second milkshake $3, for the third milkshake $2 and for the fourth milkshake $1. What is the value of Nick's consumer surplus for the milkshakes he buys?
$3
(3) based on the table... what is Abby's Marginal Benefit from the 10th slice of pizza?
$4
(17) the lowest price for which a firm will sell its second ton of wheat is...
$75
Suppose a rise of peaches from $5.50 to $6.50 per bushel decreases the quantity demanded from 12,500 to 11,500 bushels. The price elasticity of demand is...
0.5
(59) table demand schedule for Billy Bob's BBQ Ribs... If the price of a pound of ribs falls from $3 per pound to $1 per pound, what is the change Billy Bob's total revenue?
-$24
if a 5 percent increase in the price results in a 9 percent increase in quantity supplied, the elasticity of supply is...
1.80
Suppose the price of a DVD rose from $15 to $17 and the quantity demanded decreased from 1,000 per month to 900 per month. Using the midpoint formula, the ________ percent change in price lead to a ________ percent change in the quantity demanded.
12.5; 10.5
Jane is willing to pay $4 for the first cup of coffee a day, $2.50 for the second cup and $1 for the third cup, after which she won't buy any coffee. The price of a cup of coffee is $2.40. How many cups of coffee per day will Jane buy?
2
A 20 percent increase in the quantity of pizza demanded results from a 10 percent decline in its price. The price elasticity of demand for pizza is...
2.0
Ham and Eggs are compliments. If the price of ham rises the demand for eggs will...
decrease and the demand curve will shift leftward
The demand curve for a normal good shifts leftward if income ________ or the expected future price ________.
decreases; falls
(26) market for oil... because of the development of a new deep sea drilling technology...
demand curve does not shift and the supply curve curve shifts from S1 to S2
(27) market for french fries... if the price of potatoes rises and simultaneously people become concerned that french fries can cause heart attacks...
demand curve for french fries shifts from D2 to D1 and the supply curve of french fries shifts from S2 to S1
(25) market for candy... People become more concerned that eating candy causes them to gain weight, which they don't like. As a result the...
demand curve shifts from D2 to D1 and supply curve does not shift
Because there are numerous choices for food purchases, the price elasticity of demand for Taco Bell food is likely...
elastic
Dan sells newspapers. Dan says that a 4 percent increase in the price of newspapers will decrease the quantity of newspapers demanded by 8 percent. According to Dan, the demand for newspapers is...
elastic
When the price is below the equilibrium price, the quantity demanded...
exceeds the equilibrium quantity, but the quantity supplied id less than the equilibrium quantity.
