micro yerd

Consider the same demand equation as before: Qd = 150 - 3P. What will be the relevant price (also known as the maximum willingness to pay) for at Qd = 90?

$20

When price of glass increases by 50%, and the quantity demanded of glass falls by 40%, what is the elasticity of demand of glass:

-0.8

Consider the demand equation Qd = 150 - 3P. What will be the quantity demanded for a price of $50?

0

If a firm making widgets lowers its price by 10 percent and finds that it sells 8 percent more widgets, the elasticity of demand for its product equals

0.8

Which of the following will not shift the demand for burritos?

A big burritos sale

Which of the following will NOT increase the demand for porcelain tea sets?

A fall in the price of porcelain (an input)

A Demand Curve is a

A generally upward sloping line relating price and quantity demanded.

If price is raised by 20% and quantity falls by 20 pounds, what is the elasticity of demand?

Cannot be determined without more information.

If you discover that both the equilibrium price and quantity of peas has risen, what would you conclude?(Hint : Try drawing the situations):

Demand has increased with supply remaining the same.

Apple growers want to increase their total revenue by increasing the price of apples. In which of the following cases will the total revenue actually increase as a result of the price rise?

Elasticity of demand is 0.6.

What would happen in the market for shredded wheat cereal if the price of wheat decreased and the price of corn flakes (a substitute) decreased?

Equilibrium price decreases, but the impact on equilibrium quantity would be uncertain.

When supply falls with no change in demand, what happens to the equilibrium price and quantity?

Equilibrium price rises and equilibrium quantity falls.

Suppose that the price of oranges and apples rises. What would you expect to happen to the market price and quantity of orange juice (apple juice is a substitute)?

Equilibrium price would increase, but the impact on equilibrium quantity would be uncertain.

What would happen in the market for news programs if the salaries of news anchors fall while the price of newspapers rises?

Equilibrium quantity increases, but the impact on equilibrium price would be uncertain.

The demand and supply curves for bags are as follows (P represents the price of bags and Q represents the quantity of bags): Qd = 60-2P Qs = 15 + P What is happens at a price of $ 9?

Excess demand of $18.

When price of glass increases a lot, which of the following are less likely to be manufactured?

Glass bottles.

Which of the following will increase the supply of photocopiers

New technology that makes it possible to manufacture photocopiers much more cheaply.

Which of the following is likely to have the least elastic supply?

Paintings by Michelangelo.

If the price of peanut butter increases, and the demand for bread decreases as a result, then which of the following is true?

Peanut butter and bread are complements.

If price elasticity of demand of peaches is -5, then a 10% increase in the price of peaches would result in which of the following?

Quantity demanded decreases by 50%.

The quantity demanded of ramen increased from 4 packets per month to 8 packets per month. In the same time income of people increased from $10 per day to $15. Which of the following can be inferred from the above information?

Ramen is a luxury good.

There has been a fall in the price of English mustard. Simultaneously, there has also been an improvement in the technology that manufactures American mustard so that American mustard can now be produced at a much lower cost. British and American mustard are substitutes of one another. What will happen to the equilibrium price and quantity in the market for American mustard?

The equilibrium price of American mustard decreases but the impact on quantity is uncertain.

What would happen in the market for ramen noodles if the price of wheat (an input) falls while consumer income rises (ramen noodles are an inferior good)?

The equilibrium price would decrease, but the impact on quantity would be uncertain.

Which of the following would make the demand for education at Clemson more elastic?

The founding of four more universities in South Carolina.

Which among the following statements is NOT true?

The willingness to pay for a good can exceed the benefits received from consuming the good.

Which of the following will increase the demand for tea?

a rise in the price of coffee

A supply curve slopes upwards because

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

Which of the following would not be expected to shift down the demand for peanut butter? a. An increase in the price of jelly (a complement).

an increase in the price of peanut butter

How will the elasticity of the demand curve of soap change after it becomes a common knowledge that bacteria and other organisms cause and spread disease?

become more inelastic

The quantity demanded of sausages increased from 4 packets per month to 8 packets per month. During the same time the price of baked beans fell from $4 to $2 per can. The two goods are therefore:

complements

Which of the following will increase the quantity of photocopiers supplied? a. A fall in the price of photocopy paper (a complement). b. A rise in the price of scanners (a substitute). c. New technology that makes it possible to manufacture photocopiers much more cheaply. d. All of the above.

d

the demand curve shows _______ and the supply curve shows ______. a. how much potential buyers value the good; the willingness of potential sellers to sell the good. b. the marginal benefit of the good to demanders; the marginal cost of the good to suppliers. c. the quantity that will be bought at each price; the quantity that will be sold at each price. d. All of the above.

d

A demand curve indicates the value consumers get from a good. It is measured as a. the benefits people receive less the cost. b. the quantity people will buy at various prices. c. the prices people prefer to pay. d. All of the above. e. Only b and c.

e

Which of the following will increase the market price of coffee? a. The discovery that coffee cures cancer. b. A terrible storm in Brazil that destroys half the coffee crop. c. An increase in the price of tea (a substitute). d. A fall in the price of creamer (a complement). e. All of the above.

e

Which of the following would you expect to have the least elastic demand?

headache medicine

Anything that increases the value that potential buyers receive from a good may be expected to

increase the demand

If a 10% increase in the price of beer reduces the quantity demanded by 8%, then demand for beer is

inelastic

Suppose you sell jewelry boxes, and a business consultant you have hired determines that demand for your product is elastic. If you want to increase your total revenue, you should therefore:

lower prices

The demand curve represents _____ while the supply curve represents _____.

marginal benefits, marginal costs

Each point on a supply curve denotes ______________ :

minimum willingness to accept of sellers.

he demand for potatoes tends to be less elastic than the demand for movies because:

movies have better and closer substitutes.

Demand for PB's maple nut ice cream tends to be elastic because

other flavors of ice cream are good substitutes.

If a supplier can sell as much as it wants at $10 per unit, but none at all at $10.01, we know that the demand it faces is:

perfectly elastic

The price of ham rises sharply. What happens to the equilibrium price and quantity of cheese (ham and cheese are complements)?

price falls, quantity falls

How will the demand curve of soaps shift after it becomes a common knowledge that bacteria and other organisms cause and spread disease?

shift right

If equilibrium price in a market has risen from $10 to $25 and the equilibrium quantity has fallen from 50,000 to 35,000, we would know that

supply has decreased

If equilibrium price has fallen from $5.50 to $4.75 while equilibrium quantity has risen from 10,000 to 12,000, we would know that

supply has increased

If someone tells you that they "can't live without" something, what would you (as an economist) assume ?

that their demand is likely to be highly inelastic.

If Clemson decides to increase its tuition so as to raise its revenues, it must believe that :

the demand for education in Clemson is inelastic.

A frost has destroyed half of Florida's orange crop. If orange growers are concerned about their earnings, they would be unhappy only if :

the demand for oranges is elastic.

Jason needs 100 cases of Cristal champagne to cater a party. First, Jason visits all the wine shops located within ten miles but can't get enough cases. Then Jason visits all wine shops located between 10 and 50 miles, but still is short a few cases. Finally, Jason visits all wine shops located within 50 and 100 miles and gets the last few cases he needs. Jason's struggles illustrate

the law of supply

Jon needs 200 pieces of Filet mignon to cater a wedding. First, Jon visits all the butcher shops located within ten miles but can't get enough pieces. Then Jon visits all butcher shops located between 10 and 50 miles, but still is short a few pieces. Finally, Jon visits all butcher shops located within 50 and 100 miles and gets the last few pieces he needs. Jon's struggles illustrate

the law of supply

Gains from trade are maximized when:

the market price is equal to the equilibrium price.

Buyers and sellers communicate primarily:

through their willingness to buy and sell at various prices.