Econ test 2 moodle stuff

Refer to Figure 5-3. The max value of total rev corresponds to a price of

$50

Refer to Figure 5-3. Using the midpoint method, between prices of $10 and $20, price elasticity of demand is about

0.18

If a 9% increase in price for a good results in an 8% decrease in quantity demanded, the price elasticity of demand is

0.89

Between point A and B, price elasticity of demand is equal to

1.5

The vertical distance between points A and B represents the tax in the market. The price that buyers pay after the tax is imposed is

24

If the price elasticity of supply is 0.7, and a price increase led to a 4.2 % increase in quantity supplied, then the price increase is about

6.00

If the price of the product is $110, then who would be willing to purchase the product?

Calvin, Sam, and Andrew

Suppose the government wants to encourage Americans to exercise more, so it imposes a binding price ceiling on the market for in-home treadmills. As a result,

a shortage of treadmills will develop

If rectangle D is larger than rectangle A, then which of the following is not correct?

an increase in price from P1 to P2 will cause an increase in total revenue

When a tax is placed on the sellers of cell phones, the size of the cell phone market

and the effective price received by sellers both decrease

Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

between $5 and $7

A surplus results when a

binding price floor is imposed on a market

To fully understand how taxes affect economic well-being, we must

compare the reduced welfare of buyers and sellers to the amount of revenue the government raises

A tax on the sellers of bottled water will increase the price of bottled water paid by buyers,

decrease the effective price of bottled water received by sellers, and decrease the equilibrium quantity of bottled water

If the government imposes a binding price ceiling on a market, then the price paid by buyers will

decrease, and the quantity sold in the market will decrease

A $1.55 tax levied on the buyers of milkshakes will shift the demand curve

downward by exactly $1.55

If the government wants to reduce the burning of fossil fuels, it should impose a tax on

either buyers or sellers of gasoline

If the labor supply curve is very elastic, a tax on labor

has a large deadweight loss

Refer to figure 5-5. If the price decreased from $36 to $12, total rev would

increase by $4800 and demand is elastic between points X and Z

Milk has an inelastic demand, and steak has an elastic demand. Suppose that a mysterious increase in bovine infertility decreases both the population of dairy cows and the population of beef cattle by 50 percent. The equilibrium price will

increase in both the milk and steak markets

When the price of candy bars is $1.20, the quantity demanded is 490 per day. When the price falls to $1.00, the quantity demanded increases to 500. Given this information and using the midpoint method, we know that the demand for candy bars is

inelastic

To say that a price ceiling is binding is to say that the price ceiling

is set below the equilibrium price

Suppose researchers at the University of Wisconsin discover a new vitamin that increases the milk production of diary cows. If the demand for milk is relatively inelastic, the discovery will

lower both price and total revenues

Suppose that the equilibrium price in the market for widgets is $5. If a law increased the minimum legal price for widgets to $6, producer surplus

might increase or decrease

Goods with many close substitutes tend to have

more elastic demands

Minimum-wage laws dictate

only a minimum wage that firms may pay workers

Suppose the equilibrium price of a stick of deodorant is $4, and the government imposes a price floor of $5 per stick. As a result of the price floor, the

quantity demanded of deodorant decreases, and the quantity of deodorant that firms want to supply increases

Rent control

serves as an example of a price ceiling

Which of the following causes the price paid by buyers to be different than the price received by sellers?

tax on the good

For a good that is a luxury, demand

tends to be elastic

The term tax incidence refers to

the distribution of the tax burden between buyers and sellers

Which of the following is not a determinant of the price elasticity of demand for a good?

the flatness of the supply curve for the good

Income elasticity of demand measures how

the quantity demanded changes as consumer income changes

Demand is said to be inelastic if

the quantity demanded changes only slightly when the price of good changes

Cross-price elasticity of demand measures how

the quantity demanded of one good changes in response to a change in the price of another good