ECON 2020 chapters 5 & 6
melvin's magnets earned $200 in total revenue last month when in sold 100 souvenir magnets. this month it earned $300 in total revenue when it sold 60 souvenir magnets. the price elasticity of demand for marvins magnet is
0.58
a 10% increase in gasoline prices reduces gasoline consumption by about
2.5% after one year and 6% after 5 years
a tax on the buyers of personal computer external hard drives encourages
buyers to demand a smaller quantity at every price
A
mark says he would buy one Mt. dew per day regardless of the price. if this is true, the marks demand for mt. dew is represented by demand curve
a binding minimum wage tends to
cause labor surplus, cause unemployment, and have a great impact in the market for teenage labor
if the government levies a $2 tax per DVD on buyers of DVDs, then price received by sellers of DVDs would
decrease by less than $2
the supply of aged cheddar cheese is inelastic, and the supply for bread is elastic. both goods are considered to be normal goods by a majority of consumers. suppose that a large income tax increase decreases the demand for both goods by 10%. the equilibrium price will
decrease in both aged cheddar cheese and bread markets
kevin tunes pianos. if the demand for piano tuning services is elastic, kevin could increase his total revenue by
decreasing the price of his piano tuning services
when small changes in price lead to infinite changes in quantity demanded, demand is perfectly
elastic, and the demand curve will be horizontal
holding all other factors constant and using the midpoint method, if a calculator manufacturer increases production from 40 to 50 units when price increases by 20%, then supply is
elastic, since the price elasticity of supply is equal to 1.1
any price below $6
for a price ceiling to be binging in this market, it would have to be set at
the supply of aged cheddar cheese is inelastic, and the supply for bread is elastic. both goods are considered to be normal goods by a majority of consumers. suppose that a large income tax increase decreases the demand for both goods by 10%. the change in equilibrium price will be
greater in the aged cheddar cheese market than in the bread market
$24
how much tax revenue does this tax produce for the government
binding if market demand is demand A or demand B
if the government imposes a price ceiling at $3 it would be
non-binding and creates neither a labor shortage nor unemployment
in this market, a minimum wage of $2.75 is
if a tax is levied on the sellers of a product, then there will be a
movement up and to the left along the demand curve
if the price of gasoline rises, when the price elasticity of demand likely to be the highest
one year after the price increase
$16 to $40
over which range is the supply curve in the figure the most elastic?
$220 to $430
over which range is the supply curve in this figure the least elastic
in the case of perfectly inelastic demand
quantity demanded stays the same whenever price changes
food and clothing tend to have
small income elasticities because consumers, regardless of their income, choose to buy relatively constant quantities of these goods
between 25 and 50 units
suppose a tax of $5 per unit is imposed on this market. what will be the new equilibrium quantity in this market
$4
the effective price received by the sellers after the tax is imposed is
suppose buyers of vodka are required to send $1.00 to the government for every bottle of vodka they buy. further, suppose this tax causes the effective price received by sellers of vodka to fall by $0.60 per bottle. which of the following statements is correct
the price paid by buyers is $0.40 per bottle more than it was before tax
$8
the price that buyers pay after tax is imposed is
for a particular good, a 10% increase in a price causes a 15% decrease in quantity demanded. which of the following statements is most likely applicable to this good
the relevant time horizon is long
a $2.00 tax levied on the sellers of birdhouses will shift the supply curve
upward exactly by $2.00
1.00
using the midpoint method, at a price of $16, what is the income elasticity of demand when income rises from $5,000 to $10,000
1
using the midpoint method, if the price falls from $60 to $40, the price elasticity of demand is
0.58
using the midpoint method, what is the price elasticity of supply between $100 and $220
0.56
using the midpoint method, when income equals $5,000, what is the price elasticity of demand between $8 and $12
knowing that the demand for wheat is inelastic, if farmers voluntarily did not plant wheat on 10% of their land, then
wheat farmers would experience an increase in their total revenue