Econ 102 Final
What is the price elasticities of demand between 0.75 and 0.50
0.33
What is the price elasticities of demand between 2.50 and 2.25
19
if a producer is willing to receive at least 5 for a pen that she manufactures but she actually receives 7 for it the producer surplus of the pen is
2
The publisher of an economics textbook finds that when the books price is lowered from 70 to 60 sales rise from 10,000 to 15,000 using the midpoint method, calculate the price elasticity of demand
2.6
The only producer of chocolate bunnies in the world , Choco's Bunny Company recently expanded its production capacity from 1,000 bunnies per day to 2,000 per day . Supposing the price elasticity of demand for Bunnies is 3.33 ; if you use the midpoint method of estimating the price elasticity of demand by how much will the company need to reduce its price to sell the additional 1,000 bunnies ?
20 %
the marginal damage cost imposed on a society from processing 4 tons of glass are
20 dollars per ton of glass
the objective of rent control is to
keep the rents below levels that would be observed in a freely competitive market
assume that jackie concludes that he should eat less and play racquetball more in this situation it must be trust that the marginal utility of the last dollar spent on food is
less than the marginal utility of the last dollar spent on racquetball
all of the following results from price floors in agriculture EXCEPT
lower prices to consumers for agricultural products that have price floors
Everyone's demand for peanut butter decreases as income and rises the income, elasticity of demand for the product is
negative
public goods are
nonrival in consumptions and their benefits are nonexcludable
a television signal sent by cable is blank in consumptions and viewers are blank
nonrival, excludable
We expect the price elasticity of supply to be
positive
vaccinations convey blank to third parties
positive externalities
a maximum legal price that may be charged for a particular good or service is known as a
price ceiling
if governemnt sets the max legal price of gas at 2 per gallon then the 2 limit acts as
price ceiling
When producers would have been willing to accept lower prices at various quantities produced than the market-clearing price the differences is called
producer surplus
which benefits most from government price support program that establishes a floor price for an agricultural product that is higher than the products market clearing price
producers who earn a higher price on the sale of each unit and also sell more units thereby unambiguously earning higher revenues
which of the following will likely occur when price floor is agriculture are implemented
quantity supplied will exceed quantity demanded
agriculture price supports that establish a price floor at which agricultural product may be purchase that exceeds the market clearing price
result in the quantity of these products supplied exceeding the quantity demanded at the floor price
private goods are
rival in consumption and their benefits are excludable
In a price system, change in prices
signal to everyone in the system what goods are relatively more or less scarce
A Goods price elasticity of demand can be calculated by using
the percentage change in quantity demanded divided by the percentage change in price
The price elasticity of supply
the percentage change in quantity supplied divided by the percentage change in price
The cross price elasticities of demand is measured by the
the percentage change in the quantity demanded of one good divided by the percentage change in the price of another good
if the government imposes a price floor that is higher than the market clearing price then
the sum of producer and consumer surplus will decrease
if a price ceiling of 3 was set
there would be a shortage of 20 units
Eric's income increase from 40,000 to 50,000 per year Eric's consumption of tickets to pro football games increase from 2 to four per year using the midpoint formula his income elasticity of demand for pro football game ticketsis equal to blank and football game tickets are blank goods
+3, normal
Suppose that the amount of computer printers demanded, increases by 20% when the price of personal computers falls by 10% the cross price elasticity of demand between computer printers, and personal computers is
-2.0
Six months ago the price of gasoline was 2.20 per gallon now the price is 2.40 per gallon in response to this price the number of gallons of gasoline purchase has declined by 2% based on this information what is the absolute price elasticity of demand
0.23
Calculate the price elasticity of demand using the midpoint method when the price increases from 6 to 8
1
In the table the price elasticity of demand for pizza between the prices of 14 and 12 per pizza one income is 1000 per month is
1
a shortage would be caused by a government rice ceiling set at
1.00
What is the price elasticities of demand between 1.50 and 1.25
1.22
In the table one income changes from $1000-$1400 per month the income elasticity of demand for pizza at the price of $14 per pizza is
1.5
Suppose that the number of units of good X consumed falls 12% what is the price of good Y falls 8% the cross price elasticity of demand between goods X and Y
1.5
suppose that user derives 45 utils of total utility from eating 6 hotdogs and 55 utils of total utility from eating 7 hotdogs what is the usher marginal utility from eating the 7th hotdog
10
In the market for lattes shown in the figure, what is the price elasticity of demand between prices 2 and 2.50 per cup using the midpoint formula.
3
if niki is willing to pay up to 5 dollars for an ice-cream bar but she actually pays 2 for it the consumer surplus of the ice cream bar for niki is
3
What is the price elasticities of demand between 2.00 and 1.75
3.00
the unregulated market amount of cars is
35 cars
the efficient amount of fertilizer is
50 bags
the marginal private cost to a firm of producing the 10th unit of output is 100 dollars the marginal social cost of the 10th unit of output is 150 dollars the marginal damage cost of the tenth unit of output is
50 dollars
Which of the following goods is likely to have the highest income elasticity?
A designer blouse
which of the following is false
Assuming that the law of diminishing marginal utility holds the demand curve must be upward sloping
For any two goods, X and Y, if MUX divided by PX equals 2.5 and MUY divided by PY equals 4.0, then with given income and prices the consumer should
Buy more of good Y and less of good X
The pair of items that is likely to have the largest positive cross price elasticity of demand is
Coffee and tea
If the price of chocolate covered peanuts increases in the demand for strawberry flavored soft drinks decreases, this indicates that these two goods are
Complementary goods
Sometimes airlines raise ticket prices as the flight departure date approaches in the hope of increasing revenue the airlines raise their prices on the assumption that
Consumer demand becomes less price elastic as departure time approaches
A Business firm could lower prices, and still increase revenue. If
Demand is elastic
If the absolute value of the price elasticities of demand for a product is greater than one then
Demand is elastic
The price elasticity of demand is measured by
Dividing the percent change in quantity demanded by the percent change in price
No matter what the price of coffee is in the cafeteria Jack spend $20 a week on coffee we can conclude that the absolute value of the price elasticities of demand for coffee for Jack is
Equal to 1
We project the long run price elasticity of demand of gasoline would be blank the short run price the last to say demand of gasoline
Greater than
The pair of items that is most likely to have a negative cross price elasticity of demand is
Hot dog and mustard
When the demand is elastic a decrease in price well
Increase total revenue
In the market for computers, if the demand curve is elastic and the price of a computer decreases, we would expect total revenue to blank. If the demand curve is inelastic, and the price of a computer decreases, we would expect total revenue to blank.
Increase, decrease
If a dinner guest is serious when claiming he just could not get enough of your lasagna and that the more he ate the more he wanted, you would conclude that for him the marginal utility of lasagna was
Increasing
If the income elasticity for a good as negative, the good is said to be
Inferior good
The cross price elasticity of demand of complement goods is
Less than 0
To say that to goods are compliments, their cross price elasticity of demand should be
Less than 0
A consumer has been buying 4 magazines and 3 books a month for many months. The price of magazines then decreases, which directly causes the marginal utility per dollar spent on
Magazines to increase, thereby inducing the consumer to purchase more magazines and fewer books
suppose that consumer income decreases and that hamburger is an inferior good. which of the following will occur in the market for hamburger
Market clearing price will rise and equilibrium quantity will rise
The ratio of the percentage change in the quantity demanded to the percentage change in price is the
Price elasticities of demand
If a person claims, "I wouldn't eat liver if you paid me," we can assume that his marginal utility of liver is
Negative
If your income increases and your consumption of bagels increases other things, equal bagels are considered a
Normal good
In the figure above assume that the initial demand and supply curves in figure are Da and Sa respectively. the initial equilibrium price and the quantity are
P1 and E
Which panel best represents total utility
Panel A
Amy's total utility for chocolate chip cookies reaches a maximum at 4 cookies which panel best represents marginal utility
Panel B
The price elasticity of demand measures the responsiveness of the change in
Quantity demanded to change in price
The university president believed that increasing student tuition by 5% will increase revenue. If this president is correct at the revenues will increase than the tuition increase will
Reduce the number of students enrolling by less than 5%
Compared to the long run, absolute elasticity of demand, the short run absolute elasticity of demand is
Smaller
If the price of chocolate covered peanuts increases in the demand for strawberry, licorice twists increases this indicates that these two goods are
Substitute goods
The price elasticities of demand measures
The consumers at sensitivity to a price change
Given the utility optimization rule and the presence of finishing marginal utility for a good
The demand curve for the good will be negatively sloped
Sonik a local wireless phone company tested the effect of a price reduction for text messaging. It lowered prices from 0.08 to 0.04 per message and found that the number of messages said tripled this means.
The demand for text messaging is elastic in this price range
If the absolute price elasticities of demand for automobiles is equal to 0.75, we say.
The demand is inelastic
a consumer is at an optimum when the price of the good she has been consuming decreases as a result
The marginal utility of the last dollar spent on this good is now greater than the marginal utility of the last dollars spent on the other good
Income elasticity relates to
The responsiveness of demand to changes in income
Demand relationship in which the quantity demanded change is exactly in proportion to the change in price is
Unit elastic
The amount of pleasure or satisfaction derived from consumption of a good is called
Utility
the market clearing wage rate is
We
An externality is
a benefit or cost experienced by someone who is not a producer or consumer of a good or service
price floor represents
a minimum price that can be legally charged for a good or service
assume that the market clearing price for a shirt is 20 dollars but that the max price that can be charged is 15 this is an example of
a price ceiling that will likely lead to a shortage of shirts on the market
refer to the figure other things being equal when the government imposes a price floor at P2 then we would expect
a surplus to occur
if government sets a price floor of 3.50 per gallon there would be
an excess quantity supplied equal to 100,000 gallons
a reduction in the minimum wage is expected to cause which of the following
an increase in the number of workers employed
a price ceiling has been set at P1 and a black market has opened the equilibrium black market will be
between Q1 and Q3
government policies such as price controls rent controls and quantity restrictions have the effect of
creating excess quantities demanded or excess quantities supplied
Secondhand Cigarette Smoke is an example of
externality
because people can enjoy the benefits of public goods whether they pay for them or not they are usually unwilling to pay for them this is known as
free rider problem
If the market clearing price increases, then the amount of producer surplus will
increase
Government often blank activities that generate external blank
subsidize, benefits
when the government pays part of my university education it is
subsidizing an external benefit
assuming the government imposes a price floor on garbazo beans of 8 what would be the liekly result
surplus of 2000 garbanzo beans
suppose government imposes a minimum wage of 20.00 per hour this will likely result in
surplus of labor
An elastic response in the quantity of a good demanded would be caused by
the availability of many substitutes