econ exam 2
all the rest of the questions for exam 2 are on graphs
so look on the actual tests and understand all the graphs
comparing coffee tea and coffee to cream, we would expect the cross elasticity of demand for...
tea to be positive, but negative for cream
in the market for a particular pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair, the actual price that each has to pay for shoes is $55, what is the combined amount of consumer surplus for Jena and Jane?
$50
suppose that as the price of Y falls from $2.00 to $1.90, the quantity of Y demanded increases from 110 to 115, then the price elasticity of demand is...
.87
the supply of product X is perfectly inelastic if the price of X rises by....
10% and quantity supplied stays the same
the price elasticity of demand for widgets is .80, assuming no change in demand curve for widgets, a 16% increase in sales implies a...
20% reduction in price
in a situation where an externality occurs, the "third party" refers to those who...
are not directly involved in the transaction or activity
Curve st embodies all costs (excluding externalities) and dt embodies all benefits (including externalities) associated with the production and consumption of X. Assuming the market equilibrium output is Q1, we can conclude that the existence of external...
benefits has resulted in an under allocation of resources to X
if the price of a product increases
consumer surplus will decrease
along a linear downward-sloping demand curve, the price elasticity of demand will be...
different across each price range
you are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1, to increase total revenues from that product, you should..
increase the price of the software
what is the most likely effect of the development of DVD's, rental movies, and online movie streaming on the move theatre industry?
increased price elasticity of demand for movie theatre tickets
deadweight loss
is measured as the combined loss of consumer surplus and producer surplus
assume that a 3% increase in income across the economy produces a 1% decline in the quantity demanded of good x, the coefficient of income elasticity of demand for good x is...
negative, and therefore X is an inferior good
in a free market economy, a product that entails a negative externality (additional social cost) will be...
overproduced
assume that a consumer purchases a combination of product A and product B such that MUa/Pa=8 and MUb/Pb=6, to maximize utility without spending more money, the consumer should...
purchase more of product A and less of product B
the formula for cross elasticity of demand is percentage change in...
quantity demanded of X/percentage change in price of Y
at the output level that maximizes economic surplus
the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output
which of the following conditions does NOT need to occur for a market to achieve allocative efficiency?
the total revenue received by producers equals the total cost of production
when diminishing marginal utility starts happening as a person consumes more and more of a given good...
total utility will increase at a diminishing rate
graphically, consumer surplus is measured as the area...
under the demand curve and above the actual price
