W4 quiz

using the midpoint method, if the price falls from $200 to $150, the price elasitcity of demand is

elastic

Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25. if the market price is $40 for this transaction, then the total surplus would be $15

false

if the price elasticity of supply is 0.5 and the quantity supplied decreases by 6%, then the price must have decreased by 3%

false

total surplus in a market can be measured as the area below the supply curve plus the area above the demand curve, up to the point of equilibrium

false

the particular price that results in quantity supplied being equal to quantity demanded is the best price because it

maximizes the combined welfare of buyers and sellers

the price elasticity of supply measures how much

the quantity supplied responds to changes in the price of the good

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 supply curve

the area below the price and above the supply curve measures the producer surplus in a market

true

if the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase is

zero

when the price is P2, producer surplus is

A+B+C

on a graph, consumer surplus is respresented by the area

below the demand curve and above the price

the price elasticity of demand measures

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

producer surplus is

the amount a seller is paid minus the cost of production

if the price of walnuts rises, many people would switch from consuming walnuts to consuming pecans. but if the price of salt rises, people would have difficulty purchasing something to use in its place. these examples illustrate the importance of

the availability of close substitutes in determining the price elasticity of demand

you are in charge of the local city-owned aquatic center. you need to increase the revenue generated by the aquatic center to meet expenses. the mayor advises you to increase the price of a day pass. the city manager recommends reducing the price of a day pass. you realize that

the mayor thinks demand is inelastic, and the city manager thinks demand is elastic