Micro assignment 2
suppose that tom bought a bike from helen for $195. If helens reservation price was $185 and tom's reservation price was $215, the total economic surplus from this transaction was
$30
Suppose you observe a decrease in the equilibrium price and quantity of corn. Of the options listed below, this is best explained by
a fall in consumer income assuming corn is a normal good
Suppose demand decreases, but there is no change in supply. As the market reaches its new equilibrium:
excess supply will lead the price to fall
assume that Joe is willing to produce a hamburger for $1, and Mary is willing to pay $3 for a hamburger. Which of the following is true?
Joe and mary can make a mutually beneficial exchange
The price of bananas will increase in response to
an excess demand for bananas
What might cause a demand curve to shift to the right
an increase in the price of a substitute
It is likely that for most people
coffee and tea are substitutes
Suppose that when the price of oranges is $3 per pound, the quantity demanded is 4.7 tons per day and the quantity supplied is 3.9 tons. In this case:
excess demand will lead the price of oranges to rise
Shelly purchases a leather purse for $400. One can infer that
her reservation price was at least $400
if the local slaughterhouse gives off an unpleasant stench, then the equilibrium quantity of meat will be _____ the quantity that maximizes total economic surplus
higher than
if the demand for a good decreases as income decreases, then the good is a
normal good
If pencils and paper are complements for most consumers, then if the price of paper increases, you would expect
the equilibrium price and quantity of pencils to fall
The entire group of buyers and sellers of a particular good or service makes up
the market
when a market is in equilibrium
there is neither excess demand nor excess supply