principles of microeconomics final

suppose that when the price of good x change from $5 to $10, the demand for good Y changes from 110 to 100 then the cross elasticity of demand is

-0.143 and the goods are complement

which situation will likely cause a nations possibility curve to shift inward

an increase in foreign trade

a point inside the production possibilities curve is

attainable, but the economy is inefficient

Among competing issues, the most important concern of economics is with the:

efficient use of limited productive resources to satisfy economic wants.

when the price of a product is increase 10%, the quantity demanded decreases 15%. In this range of price, demand for this product is

elastic

a basic characteristic of a command system is

government own most economic resources

to economists, the main difference between the short run and the long run are that

in the long run all resources are variable, while in the short run at least one resource is fixed

if the cross price elasticity of goods x and Y is negative then the sales of X move

in the opposite direction as the price of Y, and x and y are complementary goods

an inferior good is best defined as a product for which the

income elasticity of demand is negative

when the price of oil declines significantly, the price of gasoline also declines. The latter occurs because of

increase in the supply of gasoline

if the price elasticity of demand for a product id equal to 0.5, then a 10% decrease in price will

increase quantity demanded by 5 %

other things equal

increases S, decreases P, and increases Q

You are the sales manager of a software company

increases the price of the software

private firms cannot profitably produce a public good because of

nonrivalry and nonexcluadibility

economic systems differ according to what two main characteristics

ownership of resources and methods of coordinating economic activity

if an increase in the supply of a product results in a decrease in the price, but no change in the actual quantity of the product exchanged, then the

price elasticity of demand is zero

what to produce in a market economy is ultimately determined by the

spending decision of household

which is not a determinant of the price elasticity of demand for most products

the slope of the demand curve for a product

if price declines from $450 to $350 and. as a result, quantity demanded rises from 1200 to 1500, price elasticity of demand is

0.89

which would not be considered as capital by an economist

A share corporate stock issued by general motors

a rightward shift in the demand curve for product C might be caused by

a decrease in the price of a product that is complementary to C

which question is an example of a microeconomics question

Will the merger of two airlines likely result in higher airline ticket prices

which of the following will not cause the demand for product k to change

a change in the price of k

demand can be said to be inelastic when

a reduction in price results in a decrease in total revenue

when production creates external costs greater than external benefits a market is

allocating too many resources to production of the product

once a government has provided a public good, everyone

can obtain the benefit

the rationing function of prices refers to

capacity of a competitive market to equate the quantity demanded and the quantity supplied

the demand curve for a product might shift as a result of a change in

consumer taste consumer income the prices of related goods

the price elasticity of demand increases with the length of the period to which demand curve pertains because

consumers will be better able to find substitutes

If Z is an inferior good. an increase in money will shift the

demand curve for Z to the left

along a linear downward- sloping demand curve, the price elasticity of demand will be

different across each price range

producer surplus

is the difference between the minimum prices producers are willing to accept for a product and the higher equilibrium price

elasticity o supply will increase when

it becomes easier to substitute one factor of production for another in a manufacturing process

how does human specialization contribute to an economies output

it makes use of differences in abilities

which is the main problem with the barter system of exchange

it requires a coincidence of wants

a reduction in the level of unemployment would have which effect with respect to the nations production possibility curve

it would not shift the curve; it would be represented by moving from a point inside the curve toward the curve

The basic economic problem is essentially one of deciding how to make the best use of

limited resources to satisfy unlimited economic wants

to internalize the external costs of pollution is to

make the polluter pay all of the costs associated with the polluting activity

suppose people want bike paths through town, but no private business or individual is willing to build it

market failure

if the price of product increases, we would expect

quantity supplied to increase

An effective price floor will

result in a product surplus

increases in resources or improvements in technology will tend to cause a society's production possibility curve to

shift outward or to the right

an improvement on production technology will

shift the supply curve to the right

if the price of product L increases, the demand curve for close substitute product J will

shift to the right

a positive cross price elasticity of demand for two products indicates that they are

substitute

in 2007 the price of oil increased, which in turn cause the price of natural gas to increase. this can be explained by saying that oil and natural gas are

substitute goods and the higher price for oil increased the demand for natural gas

an increase in the excise tax on cigarettes raises the price of cigarettes by shifting

supply curve for cigarettes lefward

Allocative efficiency occurs only at that output where

the combined amounts of consumers surplus and producers surplus are maximaze

in a free market economy, a product that entails a spillover a benefit will be

underproduced

issues of the contribution of wants and services and incomes in a competitive market system are the primary topic of which fundamental question

who will get the goods and services