Econ exam 1
Suppose the price of jackets increased by 10 percent, the quantity supplied increased by 16%. based on this information the price elasticity of supply of jean jackets is
1.6
at a price of $25, how many units will be sold
500
which of the statements is false
a consumer is indifferent among all consumption bundles along a given bundle line.
if it is difficult for a firm to attribute the output it produces to a particular worker then
a salary compensation system will be preferable to a commissions system
which of the following would cause an increase in the supply of cheese?
an increase in the number of firms that produce cheese
if the demand for labor is unchanged, an increase in the supply of labor will lead to
an increase in the quantity of labor demanded and a decrease in equilibrium wage.
if a 5% increase in income leads to a 10% decrease in the quantity demanded for a product this product is
an inferior good
manuri has $300 to spend on Pilates and yoga classes The price of a group Pilates class is $20 and the price of a group Yoga class is $10. suppose the price of a Pilates session rises to $30 while income and the price of a yoga session remains the same. what is her new optimal bundle
bundle c
the market for energy drinks has become very competitive. the increase in competition in this market is an example of how the market responds to
changes in consumer tastes
the price elasticity of demand for beef is estimated to be .6. This means that a 20% increase in the price will cause the quantity of the beef demanded to
decrease by 12%
assume that you own a small boutique hotel. in attempt to raise revenue you reduce your rates by 20%. However, your revenue falls. what does this indicate about the demand of your product
demand is inelastic
microsoft beng compatible with many other devices
example of network externalities.
suppose that when the price of ice cream increases, Liza decreases her purchase of hot fudge. To Liza...
ice cream and hot fudge are complements
one implication of compensating differentials is that laws pased to protect the health and safety of workers may not make workers better off than they were prior to the passage of the laws. why is this so.
if the laws make work environment safer, there is no reason to pay workers a compensating differential for the risk associated with their jobs
the law of demand implies, holding everything else constant, that as the price of yogurt...
increases, the quantity demanded will decrease
want to maximize net worth and economy will be slowing down in the next couple of months
invest in inferior goods
if the number of separations grows while new hiring declines, this indicates that the
labor demand curve is shifting to the left
many clients in this situation will hold stock hoping the price will rise later. you have to however, know when to cut your losses.
people often fail to ignore the sunk costs of their decisons. the cost of the stock bought at $50 per share is a sunk cost.
"A port is often the perfect end to a meal, sipped with a piece of my chocolate cake"
port and cake are complementary goods
which of the following statements is true about a simple circular flow model
producers are buyers in the factor market
which of the following is a problem inherent in centrally planned economies
production managers are more concerned with satisfying governments orders than with satisfying costumers wants
the quanitty demanded of tickets to the super bowl is always greater than the qunatity supplied. why not raise the price?
the NFL is concerned that raising ticket prices would be considered unfair
price of commercial airline tickets have fallen in recent months. over the same period, the price of jet fuel has risen and consumer incomes have fallen. which of the following best explains the falling prices of tickets
the demand curve for the airline tickets has shifted to the left more than the supply curve has shifted to the left.
suppose you own a bookstore. You believe that you can sell 40 copies a day of a book at $35. you consider lowering the price to $25 and believe this will increase the quantity sold to 50. compute price elasticity of demand
the demand for the book is inelastic. revenue will fall if the price is lowered.
alan kruger 2001 super bowl survey
the endowment effect
if a firm expects that the price of its product will be lower in the future than it is today
the firm has an incentive to increase supply now and decrease supply in the future
if paul decided to buy a $60 ticket to cirque du soleil show rather than a $45 ticket for a blue man group performance we can conclude
the marginal utility per dollar spent on cirque du soleil is higher than the marginal utility per dollar spent on blue man group
as a result of the change in price, the marginal utility of each taco harry consumes increases and
the substitution effect of the price change will cause harry to buy more tacos and fewer subs
hurricane Katrina damaged a large portion of oil refining and pipeline capacity in the golf coast states. in the market for gasoline;
the supply curve shifted to the left resulting in an increase in the equilibrium price
george gnat subscribes to a monthly pest control service for his home. last week the owner raised his monthly fee because of the rise in price of an input. how is the market for pest control affected by this
their is a decrease in the supply of pest control services
assume that the price of coffee grounds is $50. at this price:
their is a surplus equal to 90 coffee grinders that will be eliminated when the price falls to $25
which of the following statements is false?
trade-offs do not apply when the consumers purchase a product for which their is an excess supply, such as a stock clearance sale.
mabel steak and cheese or grilled cheese sandwiches
we do not have enough information