Microeconomics Final (#21-40)
Ticket scalpers at the NCAA basketball tournament last year charged prices high above the printed ticket price. This observation is evidence of
a shortage at printed ticket prices.
A price below the equilibrium price results in
a shortage.
Wants, as opposed to demands,
are the unlimited desires of the consumer.
The law of demand implies that, other things remaining the same,
as the price of a cheeseburger rises, the quantity of cheeseburgers demanded will decrease.
In a supply and demand figure, the equilibrium price and quantity are found at the
point where quantity supplied equals quantity demanded.
If good A is a normal good and income increases, the equilibrium price of A _____ and the equilibrium quantity of A _____.
rises; increases
When demand increases, the equilibrium price _____ and the equilibrium quantity _____.
rises; increases
Which of the following correctly describes how price adjustments eliminate a shortage?
As the price rises, the quantity demanded decreases while the quantity supplied increases.
The "law of supply" states that, other things remaining the same, firms produce
more of a good the higher its price.
The "law of demand" is illustrated by a
movement along the demand curve.
In the above figure, if the demand curve is D2, then
the equilibrium price will be P1 and the equilibrium quantity will be Q2.
The "law of demand" states that changes in
the quantity demanded of a good are inversely related to changes in its price.
The price elasticity of demand measures
the responsiveness of the quantity demanded to changes in price.
When a market is in equilibrium,
there is no shortage and no surplus at the equilibrium price.
Scarcity guarantees that
wants will exceed demands.
Which of the following is NOT one of the factors that influences the supply of a product?
income.
Using average price and average quantity, calculate the price elasticity of demand if a price rises from $8 to $10 and decreases the quantity demanded from 20 units to 15 units. The price elasticity of demand equals
1.29.
The price of a gallon of milk falls. Which of the following is a possible cause?
A discovery that milk causes diabetes.
If the U.S. Surgeon General announces that increased wheat consumption could cause heightened anxiety levels among children and adults, what happens to the equilibrium price and quantity of shredded wheat?
The equilibrium price falls and the equilibrium quantity decreases.
If a market is NOT in equilibrium, then which of the following is likely to occur?
The price will adjust to bring the market to equilibrium.