ECON 2305 EXAM 2

Lakukan tugas rumah & ujian kamu dengan baik sekarang menggunakan Quizwiz!

If the quantity demanded of a certain good responds only slightly to a change in the price of the good , then the

demand for the good is said to be inelastic

In a market, to find the total amount supplied at a particular price, we must

demand in that market will increase

When quantity demanded responds strongly to changes in price, demand is said to be

elastic

Suppose that quantity demand falls by 30% as a result of a 5% increase in price. The elasticity demand for this good is

elastic and equal to 6.

Demand is said to have unit elasticity if the price elasticity demand is

equal to 1

The unique point at which the supply and demand curves intersect is called

equilibrium

Marcus says that he would smoke one packet of cigarettes each day regardless of the price. If he is telling the truth, Marcus's demand

demand for cigarettes is perfectly inelastic

Good X and good Y are substitutes. If the price of Good Y increases, then the

demand for good X will increase

At the equilibrium price, the quantity of the good that buyers are willing and able to buy

exactly equals the quantity that sellers are willing and able to sell

Recent forrest fires in the western states are expected to cause the price of lumber to rise in the next six months. As a result we can expect the price of lumber to

fall now

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

falls, the quantity demanded of a good rises

Which of the following is an example of a market?

gas station,garage sale and barber shop

A market demand curve shows

how much of a good all buyers are willing and able to buy at each possible price

To determine whether a good is considered normal or inferior , one could examine the value of

income elasticity demand for that good

A movement downward and to the right along the demand curve is called an

increase in quantity demanded

A decrease in the price of a good will

increase quantity demanded

Two goods are complements when a decrease in the price of one good

increases the demand for the other good

A person who takes a prescription drug to control high cholesterol most likely has a demand for that drug is

inelastic

If the price elasticity of supply for wheat is less than 1, then the supply of wheat

inelastic

Suppose that quantity demanded rises by 10% as a result of a 15% decrease in price. The price elasticity of demand for the good is

inelastic and equal to 0.67

Kara receives a promotion at work which increases her income, we would expect Karas demand for

inferior goods to decrease

The difference between a supply schedule and a supply curve is that a supply schedule

is a table and a supply curve is drawn on a graph

When demand is perfectly inelastic, the price elasticity of demand

is zero, and the demand curve is vertical

A key determinant of the price elasticity supply is the

length of the time period

When a surplus exists in the market, sellers

lower price which increases quantity demanded and decreases quantity supplied until the surplus is eliminated.

A group of buyers and sellers of a particular good or service is called a(an)

market

Goods with many close substitutes tend to have a

more elastic demands

If two goods are complements, their cross price elasticity would be

negative

A competitive market is a market in which

no individual buyer or seller has any significant impact on the market price

If the demand for a good falls when income falls, then the good is called

normal good

You lose your job and as a result, you buy fewer iTunes music downloads. This shows that you consider music downloads to be a

normal good

When small changes in price lead to infinite changes in quantity demanded, demand is (know absolute value)**

perfectly elastic

Whether a good is a luxury or necessity depends on the

preferences of the buyer

Which of the following is not held constant in a demand schedule

price

The demand curve for a good is a line that relates

price and quantity demanded

The supply curve for a good is a line that relates

price and quantity supplied.

When drawing a demand curve,

price is measured along the vertical axis, and quantity demanded is measured along the horizontal axis.

The price elasticity of demand measures how much

quantity demanded responds to a change in income

When a shortage exists in the market, sellers

raises price which decreases quantity demanded and increases quantity supplied until the shortage is eliminated.

Suppose the American Medical Association announces that men who shave their heads are less likely to die of hear failure, we could expect the current demand for

razors to increase

Which of the following event would cause a movement upward and to the left along the demand curve for olives?

the price of olives rises

Which of the following is not held constant in a supply schedule?

the price of the good

A movement along the supply curve might be caused by a change in

the price of the good or service that is being supplied.

If the price elasticity of supply is zero, then

the quantity supplied is the same, regardless of price

If something happens to alter the quantity supplied at any given price then,

the supply curve shifts

The demand for a good or service is determined by:

those who buy the good or service

Elasticity measures how responsive quantity is to changes in price.

true

The cross price elasticity of demand for bacon and eggs likely would be negative because bacon and eggs are complements for many people.

true

The quantity demanded of a good is the amount that buyers are

willing and able to purchase

If a 30% change in price causes a 15% change in quantity supplied , then the price elasticity of supply is about

0.5 supply is inelastic

Maddy purchases 2 pounds of beans and 3 pounds of rice per month when the price of beans is 2$ per pound. She purchases one pound of beans and 4 pounds of rice per month when the price of beans is 3$ per pound. Maddys cross price elasticity of demand for beans and rice is

0.71 they are substitutes

Suppose that when the price of good x increases from $800 to $850, the quantity demanded for good y increases from 65 to 70. Using the midpoint method the cross price elasticity of demand is about

1.2 x and y are substitutes

If a 25% change in price results in a 40% change in quantity supplied, then the price elasticity of supply is about

1.60 supply is elastic

A bakery would be willing to supply 500 bagels per day at a price of $0.50 each. At a price of $0.80, the bakery would be willing to supply 1,100 bagels. Using the midpoint method, the price of elasticity of supply of bagels about

1.63

Suppose the price of a bag of frozen chicken nuggets decreases from $6.50 to $5.75 , and as a result the quantity of bags increases from 600 to 800. Using the midpoint method, the price elasticity of demand for frozen chicken nuggets in the given price range is

2.33

Last year tess bought 5 handbags when her income was $54,00. This year her income is $60,000 and she purchased 7 handbags. Hold others factors constant it follows That test's income elasticity of demand is about

3.17 handbags=normal goods

The line that relates the price of a good and the quantity demanded of that good is called

curve usually slopes downward

Which of the following characteristics is required for a perfectly competitive market?

Goods offered for sale are exactly the same and it is difficult for new sellers to enter the market

Which of the following is likely to have the most price elastic demand?

Haagen daaz ice cream

What will happen in the market for shot-gun shell ammunition now if buyers expect higher shotgun shell prices in the near future?

The demand of shot gun shell ammunition will increase

Suppose that two supply curves pass through the same point. One is steep and the other is flat. Which of the following statements is correct?

The steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter steeper curve.

Which of the following changes would not shift the supply curve for a good or service?

a change in the price of the good or service

Suppose scientists provide evidence that people who drink energy drinks are more likely to have a heart attack than people who do not drink energy drinks. We would expect to see,

a decrease in the demand for energy drinks

Which of the following would cause a movement along the supply curve for cupcakes?

a decrease in the price of cupcakes

A table that shows the relationship between the price of a good and the quantity demanded of that good is called

a demand schedule

Elasticity is

a measure of how much buyers and sellers respond to changes in market conditions

A decrease in the price of oranges would lead to a (an)

a movement down and to the left along the supply curve for oranges

Suppose that Sarah enjoys diet coke so much that she consumes one everyday. Although she enjoys gourmet cheese she consumes it sporadically. If the price of diet coke rises Jane decreases her consumption by only a very small. But if the price of gourmet cheese rises Jane decreases her consumption by a lot. These example illustrate the importance of

a necessity versus a luxury in determining the price of elasticy demand

A supply curve slopes upward because

an increase in price gives producers an incentive to supply a larger quantity.

If Mayonnaise and Miracle Whip are substitutes, then which of the following would increase the demand for Miracle Whip?

an increase in the price of mayonnaise

"Other things equal , when the price of a good rises the quantity demanded of the good, falls and when the price falls the quantity demanded rises. the relationship between price and quantity demanded

applies to most goods in the economy, represented by a downward sloping demand curve, law of demand

Which of the following is most likely to have the most price inelastic demand?

chocolate

If the cross price elasticity of two goods is positive then the two goods are

complements

A leftward shift of the demand curve is called a(an)

decrease in demand

A higher price for batteries would result in a(an)

decrease in the demand for flashlights

A decrease in the price of a good will

decrease quantity supplied

Kari downloads 7 songs per month when the price is $1.29 per song and 10 songs per month when the price is $0.99 per song. Kari's behavior demonstrates the law of,

demand

An increase in demand is represented by

rightward shift of a demand curve

An increase in supply is represented by a

rightward shift of a supply curve

The price elasticity of supply measures how responsive

sellers are to a change in price

The quantity supplied of a good is the amount that

sellers are willing and able to sell.

Suppose there is a decrease in the price of corn. If corn is an input into the production of ethanol, we would expect the supply curve for ethanol to

shift rightward

When quantity demanded decreases at every possible price, the demand curve has

shifted to the left

When quantity supplied decreases at every possible price, we know that the supply curve has

shifted to the left

When quantity demanded increases at every possible price, the demand curve has

shifted to the right

If the price elasticity of supply is equal to infinity, then the (know midpoint method)

supply curve is horizontal

If the number of sellers in a market increases then,

supply in that market will increase

If sellers do not adjust their quantities supplied at all in response to change in price,

supply is perfectly inelastic

For a good that is a necessity, demand

tends to be elastic

In the case of perfectly inelastic demand,

the change in quantity demanded equals the change in price.

A surplus exists in a market if

the current price is above the equilibrium price.

Buyers are able to buy all the want to buy and sellers are able to sell all they want to sell at

the equilibrium price but not above or below the equilibrium price

The value of the price elasticity of demand for a good will be relatively large when

the good is a luxury rather than a necessity

"Other things equal, when the price of a good rises, the quantity supplied of the good also rises, and when the price falls, the quantity supplied falls as well." This relationship between price and quantity supplied is referred to as

the law of supply

If, at the current price, there is a shortage of a good then

the price is below the equilibrium price

Which of the following events would cause a movement upward and to the right along the supply curve for mangos?

the price of mango rises


Set pelajaran terkait

Vax & Imm Exam 2 (10/31 COVID-19)

View Set

MUSI 406: Final Exam Study Guide

View Set

ATI Chapter 31: Musculoskeletal and Neurosensory Systems, ATI Chapter 30, ATI Chapter 29- Thorax, Heart, Abdomen, ATI chapter 28 Head and Neck, ati chapter 26, ATI chapter 40, ATI Chapter 14, ATI chapter 12

View Set

Ch. 6 The Transformation of Rome

View Set

Chapter 04: 4.4.10 Practice Questions

View Set