Microeconomics Worksheets

what do we call a statement describing how the world should be

Normative Statement

A monopoly is a market with how many sellers and what determines a monopoly's price?

One seller the seller makes the price

What causes a change in demand?

a change in demand is caused by income, price of related goods, tastes & preferences, number of buyers, price expectation, and taxes & subsidies

the law of demand states that, other things equal, when the price of a good

falls, the quantity of the goods rises

for a good that is a necessity, demand

tends to be inelastic

in markets, prices move toward equilibrium because of

the actions of buyers and sellers

What is the law of demand?

the law of demand states that their is an inverse relationship between price and quantity demanded when all else is equal

what induces a person to act

incentives

study figure 2 on september 21 assignment

you got it dude

which of the following will cause the supply curve for oranges to shift to the left?

an ice storm strikes florida

in a market economy, who or what determines who produces each good and how much is produced?

prices

the cross price elasticity of demand measures how much

quantity demanded of one good responds to a change in price of another good

the income elasticity of demand measures how much

quantity demanded responds to a change in income

the price elasticity of demand measures how much

quantity demanded responds to a change in price

When consumers face rising gasoline prices, they typically

reduce their quantity demanded more in the long run than in the short run

What is the effect on the demand for Steak Dinner in a community when incomes increase?

right graph shift bc there is an increase in demand change in demand change in the curve

Welfare economics refers to

the study of how the allocation of resources affects economic well being

Tom and Eric are willing to pay $12.00 and $8.00 respectively, for a zip drive. What is the total consumer surplus for both Tom and Eric if the market price of a zip drive is $5?

$10.00

The table below shows the highest price that Mike, Mary, and Rick are willing to pay for a new video game. How much is their total consumer surplus if the current price is $30? Table: Mike - $100 Mary - $50 Rick - $40

$100 100-30 = 70 50-30 = 20 40-30 = 10 70+20+10 = 100

The table below shows the highest price that Peter, Paul, and Luke are willing to pay to see the popular Broadway musical Hamilton. How much is their total consumer surplus if the current ticket price is $300? Table: Peter - $1200 Paul - $600 Luke - $400

$1300 1200-300 = 900 600-300 = 300 400-300 = 100 900+300+100 = 1300

The table below shows the lowest price Tom, Tim and Rick are willing to take to work an hour mowing a lawn. How much is their total producer surplus if the current price is $20? Table: Tom - $15 Tim - $12 Rick - $10

$23 20-15 = 5 20-12 = 8 20-10 = 10 5+8+10= 23

Andrew paid $10 to buy an autographed picture of the actress Katherine Hepburn. He was willing to pay $50. When Andrew's friend Katie learns that Andrew bought the picture she asks Andrew if he will sell it for $100, and Andrew agrees. Katie is thrilled, because she would have paid Andrew up to $110 for the picture. Andrew is also delighted. What is Andrew's original consumer surplus? What is Andrew's producer surplus from the resale? What is Katie's consumer surplus from the resale? What is the total surplus generated from the resale?

$40 (50-10) $50 (100-50) $10 (110-100) $60 (110-50)

Define Normal Good

good we buy more of when we get more income

Define Substitute

goods that can be used in place of each others; the price of one increases, the demand for the substitute increases

which of the following will most likely cause a decrease in the supply of most fruits and vegetables?

harsh punishments for farmers who hire undocumented workers

which of the following would be true in regards to adam smith

households and firms acting in a market are guided by an invisible hand

In general, elasticity is a measure of

how much buyers and sellers respond to changes in market conditions

in general, elasticity is a measure of

how much buyers and sellers respond to changes in market conditions

the market demand curve

is the sum of all individual demand curves

if we were going to go to a football game, what would be in the opportunity cost?

- parking - concessions - merch - ticket price - gasoline - time

What conditions are necessary for competitive markets to function efficiently?

- perfect information - no externalities - many buyers & sellers - the goods sold by each vendor are similar - no one individual has any influence over the price

suppose that demand for automobiles increases by 15% when consumers' incomes increase by 10%. What is the income elasticity of demand for automobiles? round your answer to two decimal places

1.50

American and Japanese workers can each produce 5 cars per person per year. An American can produce 10 tons of grain per year, a Japanese 5 tons. Assume each country has 10 million workers How much total cars if all workers work on cars? How much grain if all works produce grain? How many workers per ton of grain in each country? How many workers for each car?

50 million each country America - 100 tons Japan - 50 tons America - 10 workers Japan - 5 workers 5 workers each country

what book did Adam Smith write? what did it say?

The Wealth of Nations - the "invisible hand" of the market guides resources to their highest valued uses

What causes a change in quantity demanded?

a change in quantity demanded is caused by price

which of the following changes would not shift the demand curve for a good or service?

a change in the price of the good or service

What would be a good example of a monopoly?

a local electric company

Define Transaction Cost

costs incurred to undertake an economic change

a local movie theater earns a total revenue of $50,000 per month when the price of a movie ticket is $5, and it earns a total revenue of $30,000 when the price of a movie ticket is $6. demand is

elastic

last month, your local coffee shop charged $5 for a cappuccino to $6 and is on track to sell 50 cappuccinos. demand is

elastic

when your local internet service provider increased its monthly charge from $40 to $44, the number of subscribers fell from 2,000 to 1,000. demand is

elastic

Define Inferior Good

good we buy less of when we get more income

What is the effect on the demand for Big Macs due to a price cut for Burger King Whoppers?

left graph shift bc there is a decrease in demand for the Big Macs change in demand change in the curve

demand is inelastic if the absolute value of the price elasticity of demand is

less than 1

what are the two broad fields that economics are traditionally divided into

micro and macro economics

goods with many close substitutes tend to have

more elastic demands

goods with many closes substitutes tend to have

more elastic demands

A band has sold out a venue the last 10 Saturday nights. so the manager doubles the cover, the next ten weeks only half as many people come

price increases & demand decreases quantity demanded shift along the curve

What is the effect on the demand curve for oranges when doctors decide oranges cure baldness?

right graph shift bc there is an increase in demand change in demand shift in the curve

an increase in demand is represented by a

rightward shift of a demand curve

the law of supply states that, other things equal, when the price of a good

rises, the quantity supplied of the good rises

The price elasticity of supply measures how responsive

sellers are to a change in price

What is the effect on the demand curve for your favorite beverage when the prices falls?

shift down along the demand curve quantity demanded

on a graph, where is the equilibrium price in the market?

the center where lines cross

assume you like Pepsi and your income increases

the demand for Pepsi increases

suppose goods X and Y are substitutes for each other. if the price of good Y increases, what is the result in the market for good X?

the demand for X increases

assume the price of Coke decreases

the demand of Pepsi decreases

assume the price of Pepsi decreases

the quantity demanded of Pepsi increases

suppose the price of good X increases. in terms of demand, what is the result?

the quantity demanded of X decreases

assume the price of cheese decreases. what will happen in the pizza market?

the supply of pizza increases

Define Complement

two goods used together; the price of one increases & the demand for the other falls

study figure 3 on september 21 assignment

you got it dude

study figure 4 on september 21 assignment

you got it dude

study figure number 1 on september 21 assignment

you got it dude

study number 4 graph on September 16 2021 worksheet

you got it dude