Micro Test 2

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Erin would be willing to pay as much as $100 per week to have her house cleaned. Ernesto's opportunity cost of cleaning Erin's house is $70 per week If Ernesto cleans Erin's house for $90, Ernesto's producer surplus is ?

$20

Demand is unit elastic when quantity demanded changes from

$7- $84 $8- $88 $9- $90 $10- $90 . So it would be from $9 - $10 because the total revenue did not change even though the price did

If the price elasticity of demand for a good is 4, then a 12 percent decrease in price results in a

48 percent increase in the quantity demanded

When price is between $5 and $9, demand is $5- $70 $6- $78 $7- $84 $9- $90

Demand is inelastic because as the price changes between $5 and $9 so does the total revenue

The supply of aged cheddar cheese is inelastic, and the supply of bread is elastic. Both goods are considered to be normal goods by a majority of consumers. Suppose that a large income tac increase decrease 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 because the cheddar cheese is inelastic

The price elasticity of supply measures how responsive

Sellers are to change in price

For a particular good, a 3 percent increase in price causes a 10 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?

There are many close substitutes for this good

If T represents the size of the tax on a good and Q represents the quantity of the good that is sold, total tax revenue received by government can be expressed as

TxQ

One of the basic principles of economics is that markets are usually a good way to organize economic activity. This principle is explained by the study of

Welfare economics

Producer surplus equals the

amount received by sellers minus the cost to sellers

Under rent control, bribery is a mechanism to

bring the total price of an apartment (including the bribe) closer to the equilibrium price.

the price elasticity of demand measures

buyers' responsiveness to a change in the price of a good

A legal maximum on the price at which a good can be sold is called a price

ceiling

The benefit to buyers of participating in a marker is measured by

consumer surplus

The price elasticity of demand for a good measures the willingness of

consumers to buy less of the good as price raises

The decrease in total surplus that results from a market distortion, such as tax, is called a

deadweight loss

consumer surplus

is measured using the demand curve for a product

The social security tax is a tax on

labor

Which of the following expressions represents a cross-price elasticity of demand?

percentage change in quantity demanded of bread divided by percentage change in price of butter

The presence of a price control in a market for a good or service usually is an indication that

policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers

A legal minimum on the price at which a good can be sold is called a

price floor

The minimum wage is an example of a

price floor

The price of elasticity of demand measures how much

quantity demanded responds to a change in price

The price elasticity of supply measures how responsive

sellers are to a change in price

a payroll tax is a

tax on the wages that firms pay their workers

Consumer surplus is the

the amount a consumer is willing to pay less the amount the consumer actually pays

Producer surplus directly measures

the well-being of sellers

Economics typically measure efficiency using

total surplus

The minimum wage does not apply to

unpaid internships

The price elasticity of demand for mobile phones

will be lower if consumers perceive mobile phones to be a necessity


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