ECON Exam 1
More is better
Joe prefers a three-pack of soda to a six-pack. What properties does this preference violate?
It may rise or fall.
Suppose supply decreases and demand increases. What effect will this have on the quantity?
less than zero.
Suppose the demand for good X is given by Qdx = 10 + axPx + ayPy + aMM. From the law of demand we know that ax will be:
demand side.
The buyer side of the market is known as the:
up by the amount of the tax.
An excise tax shifts the supply curve
the value consumers get from a good but do not pay for.
Consumer surplus is
shift to the left.
For a wood furniture manufacturer, an increase in the cost of lumber will cause the supply curve to:
a decrease in the demand for good X.
Good Y is a complement to good X if an increase in the price of good Y leads to
inelastic
If apples have an own price elasticity of −0.7 we know the demand is
demand curve shifts to the right.
If demand increases, then the
shifts to the right.
If income increases, the budget line:
inelastic.
If there are few close substitutes for a good, demand tends to be relatively:
the greater the consumer surplus.
Other things held constant, the lower the price of a good
more elastic than the demand for clothing
The demand for women's clothing is, in general:
a decrease in income does not affect the slope of the budget line, while an increase in price does change the slope.
The difference between a price increase and a decrease in income is that:
the percentage change in variable G that results from a given percentage change in variable S.
The elasticity of variable G with respect to variable S is defined as:
quantity demanded of the good rises.
The law of demand states that if the price of a good falls and all other things remain the same, the
decrease.
The price elasticity of demand is −2.0 for a certain firm's product. If the firm raises price, the firm manager can expect total revenue to:
the change in the market rate of substitution.
The substitution effect isolates the change in the consumption of a good caused by:
unit elastic.
When marginal revenue is zero, demand will be:
