Micro exam 2
supply curve upward by the amount of the tax .
A tax on sellers will shift the
extent to which buyers alter their quantities demanded in response to changes in prices .
A key determinant of the price elasticity of supply is the
ceiling
A legal maximum on the price at which good can be sold is called a price
price floor .
A legal minimum on the price at which a good can be sold is called a
have no impact on employment .
A minimum wage that is set below a market's equilibrium wage will
below the equilibrium price , causing a shortage .
A price ceiling is binding when it is set
above the equilibrium price .
A price floor will be binding only if it is set
demand curve downward by the amount of the tax .
A tax on buyers will shift the
the quantity demanded of one good changes response to a change . the price of another good .
Cross - price elasticity of demand measures how
greater than 1
Demand is elastic if the price elasticity of demand is
less than 1
Demand is inelastic if the price elasticity of demand is
buyers respond substantially to changes in the price of the good .
Demand is said to be price elastic if
a measure of how much buyers and sellers respond to changes in market conditions 1/1
Elasticity is
there will be no effect on the market price or quantity sold .
If a price ceiling is not binding , then
sellers will bear most of the burden of the tax .
If a tax is imposed on a market with inelastic supply and elastic demand , then
buyers do not respond much to a change in price
If demand is price inelastic , then
price adjusts until quantity demanded equals quantity supplied .
In a competitive market free of government regulation ,
quantity demanded stays the same whenever price changes .
In the case of perfectly inelastic demand ,
the quantity demanded changes as consumer income changes .
Income elasticity of demand measures how
carrots , vegetables , food
Rank these three items in terms of their price elasticity of demand ( ED ) from most price elastic to least price elastic .
panel ( b ) only .
Refer to Figure 6-1 . A binding price ceiling is shown in
panel ( b ) only
Refer to Figure 6-1 . In which panel ( s ) of the figure would there be a shortage of the good at the price ceiling ?
an inferior good
Suppose good X has a negative income elasticity of demand . This implies that good X is
price inelastic ; normal
Suppose season tickets to Minnesota Vikings home games currently have a price elasticity of demand ( ED ) of 0.04 and income elasticity of demand ( El ) of 0.23 . This means that season tickets to Vikings home games are and
Compliments or Substitutes
The cross-price elasticity of demand can tell us whether goods are
quantity demanded responds to a change in price .
The price elasticity of demand measures how much
distribution of the tax burden between buyers and sellers .
The term tax incidence refers to
lower rent and lower quality housing
Under rent control , tenants can expect
toothpaste
Which of the following is likely to have the most price inelastic demand ?
the steepness or flatness of the supply curve for the good
Which of the following is not a determinant of the price elasticity of demand for a good ?
the quantity supplied responds to changes in the price of the good
the price elasticity of supply measures how much