Econ more practice
Consider the figure Wireless Keyboard Market. Calculate the producer surplus when the market is in equilibrium.
$2,000
Brianna and India are shopping together at the mall for new sandals. Brianna's marginal benefit from a pair of sandals is $90, and India's marginal benefit is $50. What is the gain in total consumer surplus when the price falls from $59 to $40?
$29
The state of Texas recently saw a gasoline price increase of 5%, which brought about a fall in the quantity of gasoline purchased of 1%. The price elasticity of demand is equal to _____, and demand is described as _____.
0.2; inelastic
In the graph shown, the original equilibrium price is $50. A $6 tax is placed on the seller in this market. The economic burden of this tax on the buyer is $_____.
1
The price of chicken breast rises from $3.50 per pound to $4.25 per pound. In response to this price change, the quantity demanded for chicken breast falls by 30%. Based on the midpoint method, what is the absolute value of the price elasticity of demand for chicken breast?
1.55
Cody is the sole proprietor of his photography business. He specializes in family beach portraits. In the summer vacation season, Cody sells 35 portrait packages per week at $400 per package. In the winter off-season, Cody sells 7 portrait packages per week at $175 per package. Calculate Cody's price elasticity of supply of beach portraits using the midpoint formula.
1.70
Suppose you manage a 7-Eleven and are in charge of ordering products. The home office sets the products' prices. In your area, the income elasticity of demand for beef jerky is −0.5. Because of local factory closings, you expect local incomes to decrease by 20% on average in the next month. As a result, you should stock _____ beef jerky.
10% more
Market for Mexican Take-Out. If income changes from $1,000 to $1,400 per month, the income elasticity of demand, computed using the midpoint method at a price of $18 per Mexican take-out meal, is:
2
The graph shows the market for snack-sized bags of potato chips. The original equilibrium price is 60 cents. A tax is then imposed on buyers. The economic burden of this tax on sellers is _____ cents.
2
In the market for plastic bags shown here, the original equilibrium price is 50 cents per bag. In an effort to reduce plastics usage, a tax is placed on buyers of plastic bags. The amount of the tax is _____ cents.
20
The economist for the City of San Francisco uses ticket sales data to estimate that the absolute value of the price elasticity of demand for the city's public transportation system is 0.4. The city council proposes a 5% increase in the price of a transit ticket to increase educational funding. If the proposition passes, the change in quantity demand for transit tickets will be _____%, and total revenue from ticket sales will _____.
2; rise
In the market for pesticides shown here, the original equilibrium price is $25. In an effort to reduce the use of pesticides, a tax is placed on buyers in this market. The economic burden of this tax on sellers is $_____.
6
To be binding, a price ceiling must be set at a price _____ the equilibrium price.
below
On the listing page for each item, Amazon often includes a section containing items that are "frequently bought together" with the item you're currently viewing. Amazon treats the current item and the suggested items as:
complementary goods.
The figure shows the market for accounting courseware. Suppose the government wants to make the production of college courseware profitable. To this end, it could impose a price _____ that would be binding at a price of _____.
floor; $180
Efficient outcomes:
may not make everyone happy.
If quantity demanded does not respond significantly to a relatively large change in price, demand is:
price-inelastic.
Consider the figure Producer Surplus and Supply of Water Coolers. The difference between the total revenue received by sellers and their total cost is _____, which is depicted by area _____ if the amount sold is E
producer surplus; ABD
Taking the absolute value of the income elasticity of demand is incorrect because it would:
remove the ability to tell whether the product is an inferior good or a normal good.
In the graph shown, the original equilibrium price is $50. A $6 tax is placed on sellers in this market. Who bears the statutory burden of this tax?
sellers
A subsidy for a seller of a product shifts the:
supply curve to the right or down.
Markets achieve an efficient allocation of resources when:
the quantity demanded equals the quantity supplied.
The CFO at SiriusXM, a subscription-based satellite radio service, is analyzing how various factors impact the number of subscribers. SiriusXM is offered as an add-on for car purchases at dealerships. When the price of new cars rises by 12%, the quantity of subscribers falls by 4.8%. The CFO determines that the cross-price elasticity between Sirius and car sales is _____, and the two are _____.
−0.4; complements
