Micro Midterm 1
the cross elasticity of demand for product X with respect to the price of product Y is -1.2. It can be interfered that X and Y are
complementary products
the value that sonsumers get (from consuming a product) over and above that they actually paid fot the product is called
consumer surplus
the term dollar votes in a market system means
consumers indicate their preferences by what they purchase voting for items
a negative income elasticity of demand coefficient indicated that
the product is an inferior good
if a price ceiling is det below the equilibrium price in a market
the quantity demanded will exceed the quantity supplied
a govt sets and effective price floor on a product
the quantity supplied will exceed the quantity demanded
the opporotunity cost of doing or getting somethinf is best and fully defined as:
the value of the best alternative that is given up in order to do or get something
Blossom, Inc. sells 500 bottles of perfume a month when the price is $7. A huge increase in resource costs forces Blossom to raise price to $9, and the firm only manages to sell 460 bottles of perfume. the price elacticity of demand is
.33 and inelastic
if the price of Pepsi decreases, then we'd expect to see a shift of the demand curve for
coke to the left
when the price of candy bars decreased from $0.55 to $0.45 the quantity demanded changed from 19,000 per day to 21,000 per day. in the price range, the price-elasticity coefficient (based on the midpoint formula) for candy bars is:
0.5
when the price of a product is increased 10%, the quantity demanded decreases 15%. the price elasticity of demand coefficient for this product is
1.5
what area on a graph is the producer surplus
the lower triangle on the left between supply and demand curve
one major element of the command system is
central planning conducted by the govt
economic growth may be represented by
a rightward shift of the production possibilities curve
when economists describe "a market" they mean
a system that allows buyers and sellers to interact with one another
what points on the graph are unamployed
anything below the curve
if farmers withhold some of their current corn harvest form the market because they anticipate a higher price of corn in the near future, then this would cause a(n)
decrease in supply of corn
an increase in the price of digital cameras will result in a(n)
decrease in the quantity demanded of digital cameras
a headline rease "LUmber Prices Up Sharply" which you'd expect would
decrease the supply of new homes
a decrease in the price of online streaming movies will cause
demand of DVDs to increase
what are the explanations for law of demand
diminishing marginal utility, substitution effect, income effect
a production system where various workers concentrate on different specialized tasks to contribute towards a whole product is referred to as
division of labor
total revenue falls as the price of a good is raised, if the demand for the good is
elastic
where is consumer surplus on a graph
in the upper left triangle
in the circular flow diagrams, households get their ability to pay for their consumption expenditures from the
incomes they earn for their resources
suppose that a more efficient way to produce a good is discoverable, thus lowering production costs for the goos. this will cause a(n)
increase in supply
a decrease in the price of digital cameras would lead to a(n)
increase in the demand of memory cards
you are newly appointed sales manager of the Rock Computer Tablets Company and have been charged with the task of increasing revenues. YOur economics consultants have informed you that at present price and output levels, price elasticity of demand for your product is less than one. you should:
increase prices
a fall in the price of milk (used in the production of ice cream) will
increase the supply of ice cream
if the price elasticity coefficient for a good is .75, the demand for that good is described as
inelastic
which of the following statements is an explanation for the law of increasing opportunity cost
many economic resources are better at producing one product rather than another
there is a shortage in a market for a product when
quantity demanded is greater than quantity supplied
a fall in the price of gasoline will cause
quantity demanded of gas to increase
if the price of a product decreases, we would expect
quantity supplied to decrease
the price elasticity of demand is a measure of the
responsiveness between price and profitability
the money income of households consisted of all the following except
revenues
Sony is considering a 10% price reduction on its HD TV sets. if the price elasticity coefficient for the sets in this price range is .75, then the price cut will cause
sales quantity to increase but revenues to decrease
a govt will create a surplus in a market when it
sets a price floor above the equilibrium price
if the price of gasoline increases significantly, then we'd exspect the demand curve for large trucks and SUVs to
shift to the left
which of the following is a positive economic statement
stock prices fell for the fourth month in a row
if a 10% increase int he price of one good A results in an increase of 5% in the quantity demanded of another good B, then it can be conducted that the two goods A and B are
substitute goods
there is a surplus of tomatoes in the market. this implies that
the current price is set above the equilibrium level
suppose that goods A and B are close substitutes. if the price of good A falls, then we would expect
the demand for B to increase
