econ exam 2

Ace your homework & exams now with Quizwiz!

all the rest of the questions for exam 2 are on graphs

so look on the actual tests and understand all the graphs

comparing coffee tea and coffee to cream, we would expect the cross elasticity of demand for...

tea to be positive, but negative for cream

in the market for a particular pair of shoes, Jena is willing to pay $75 for a pair while Jane is willing to pay $85 for a pair, the actual price that each has to pay for shoes is $55, what is the combined amount of consumer surplus for Jena and Jane?

$50

suppose that as the price of Y falls from $2.00 to $1.90, the quantity of Y demanded increases from 110 to 115, then the price elasticity of demand is...

.87

the supply of product X is perfectly inelastic if the price of X rises by....

10% and quantity supplied stays the same

the price elasticity of demand for widgets is .80, assuming no change in demand curve for widgets, a 16% increase in sales implies a...

20% reduction in price

in a situation where an externality occurs, the "third party" refers to those who...

are not directly involved in the transaction or activity

Curve st embodies all costs (excluding externalities) and dt embodies all benefits (including externalities) associated with the production and consumption of X. Assuming the market equilibrium output is Q1, we can conclude that the existence of external...

benefits has resulted in an under allocation of resources to X

if the price of a product increases

consumer surplus will decrease

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

different across each price range

you are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1, to increase total revenues from that product, you should..

increase the price of the software

what is the most likely effect of the development of DVD's, rental movies, and online movie streaming on the move theatre industry?

increased price elasticity of demand for movie theatre tickets

deadweight loss

is measured as the combined loss of consumer surplus and producer surplus

assume that a 3% increase in income across the economy produces a 1% decline in the quantity demanded of good x, the coefficient of income elasticity of demand for good x is...

negative, and therefore X is an inferior good

in a free market economy, a product that entails a negative externality (additional social cost) will be...

overproduced

assume that a consumer purchases a combination of product A and product B such that MUa/Pa=8 and MUb/Pb=6, to maximize utility without spending more money, the consumer should...

purchase more of product A and less of product B

the formula for cross elasticity of demand is percentage change in...

quantity demanded of X/percentage change in price of Y

at the output level that maximizes economic surplus

the maximum willingness to pay for the last unit of output equals the minimum acceptable price of that unit of output

which of the following conditions does NOT need to occur for a market to achieve allocative efficiency?

the total revenue received by producers equals the total cost of production

when diminishing marginal utility starts happening as a person consumes more and more of a given good...

total utility will increase at a diminishing rate

graphically, consumer surplus is measured as the area...

under the demand curve and above the actual price


Related study sets

Chapter 1- Systems Approach to a Foodservice Organization

View Set

Anatomy of the External & Middle Ears

View Set

Applied Stat & Optimization Models 2019 Final Study 1

View Set

Econ 212 Chapter 10 Review Questions

View Set

Sociology: Final Study Guide (Chapter 14)

View Set