Micro exam 2

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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


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