principles of microeconomics final
suppose that when the price of good x change from $5 to $10, the demand for good Y changes from 110 to 100 then the cross elasticity of demand is
-0.143 and the goods are complement
which situation will likely cause a nations possibility curve to shift inward
an increase in foreign trade
a point inside the production possibilities curve is
attainable, but the economy is inefficient
Among competing issues, the most important concern of economics is with the:
efficient use of limited productive resources to satisfy economic wants.
when the price of a product is increase 10%, the quantity demanded decreases 15%. In this range of price, demand for this product is
elastic
a basic characteristic of a command system is
government own most economic resources
to economists, the main difference between the short run and the long run are that
in the long run all resources are variable, while in the short run at least one resource is fixed
if the cross price elasticity of goods x and Y is negative then the sales of X move
in the opposite direction as the price of Y, and x and y are complementary goods
an inferior good is best defined as a product for which the
income elasticity of demand is negative
when the price of oil declines significantly, the price of gasoline also declines. The latter occurs because of
increase in the supply of gasoline
if the price elasticity of demand for a product id equal to 0.5, then a 10% decrease in price will
increase quantity demanded by 5 %
other things equal
increases S, decreases P, and increases Q
You are the sales manager of a software company
increases the price of the software
private firms cannot profitably produce a public good because of
nonrivalry and nonexcluadibility
economic systems differ according to what two main characteristics
ownership of resources and methods of coordinating economic activity
if an increase in the supply of a product results in a decrease in the price, but no change in the actual quantity of the product exchanged, then the
price elasticity of demand is zero
what to produce in a market economy is ultimately determined by the
spending decision of household
which is not a determinant of the price elasticity of demand for most products
the slope of the demand curve for a product
if price declines from $450 to $350 and. as a result, quantity demanded rises from 1200 to 1500, price elasticity of demand is
0.89
which would not be considered as capital by an economist
A share corporate stock issued by general motors
a rightward shift in the demand curve for product C might be caused by
a decrease in the price of a product that is complementary to C
which question is an example of a microeconomics question
Will the merger of two airlines likely result in higher airline ticket prices
which of the following will not cause the demand for product k to change
a change in the price of k
demand can be said to be inelastic when
a reduction in price results in a decrease in total revenue
when production creates external costs greater than external benefits a market is
allocating too many resources to production of the product
once a government has provided a public good, everyone
can obtain the benefit
the rationing function of prices refers to
capacity of a competitive market to equate the quantity demanded and the quantity supplied
the demand curve for a product might shift as a result of a change in
consumer taste consumer income the prices of related goods
the price elasticity of demand increases with the length of the period to which demand curve pertains because
consumers will be better able to find substitutes
If Z is an inferior good. an increase in money will shift the
demand curve for Z to the left
along a linear downward- sloping demand curve, the price elasticity of demand will be
different across each price range
producer surplus
is the difference between the minimum prices producers are willing to accept for a product and the higher equilibrium price
elasticity o supply will increase when
it becomes easier to substitute one factor of production for another in a manufacturing process
how does human specialization contribute to an economies output
it makes use of differences in abilities
which is the main problem with the barter system of exchange
it requires a coincidence of wants
a reduction in the level of unemployment would have which effect with respect to the nations production possibility curve
it would not shift the curve; it would be represented by moving from a point inside the curve toward the curve
The basic economic problem is essentially one of deciding how to make the best use of
limited resources to satisfy unlimited economic wants
to internalize the external costs of pollution is to
make the polluter pay all of the costs associated with the polluting activity
suppose people want bike paths through town, but no private business or individual is willing to build it
market failure
if the price of product increases, we would expect
quantity supplied to increase
An effective price floor will
result in a product surplus
increases in resources or improvements in technology will tend to cause a society's production possibility curve to
shift outward or to the right
an improvement on production technology will
shift the supply curve to the right
if the price of product L increases, the demand curve for close substitute product J will
shift to the right
a positive cross price elasticity of demand for two products indicates that they are
substitute
in 2007 the price of oil increased, which in turn cause the price of natural gas to increase. this can be explained by saying that oil and natural gas are
substitute goods and the higher price for oil increased the demand for natural gas
an increase in the excise tax on cigarettes raises the price of cigarettes by shifting
supply curve for cigarettes lefward
Allocative efficiency occurs only at that output where
the combined amounts of consumers surplus and producers surplus are maximaze
in a free market economy, a product that entails a spillover a benefit will be
underproduced
issues of the contribution of wants and services and incomes in a competitive market system are the primary topic of which fundamental question
who will get the goods and services
