Micro Midterm 1

the cross elasticity of demand for product X with respect to the price of product Y is -1.2. It can be interfered that X and Y are

complementary products

the value that sonsumers get (from consuming a product) over and above that they actually paid fot the product is called

consumer surplus

the term dollar votes in a market system means

consumers indicate their preferences by what they purchase voting for items

a negative income elasticity of demand coefficient indicated that

the product is an inferior good

if a price ceiling is det below the equilibrium price in a market

the quantity demanded will exceed the quantity supplied

a govt sets and effective price floor on a product

the quantity supplied will exceed the quantity demanded

the opporotunity cost of doing or getting somethinf is best and fully defined as:

the value of the best alternative that is given up in order to do or get something

Blossom, Inc. sells 500 bottles of perfume a month when the price is $7. A huge increase in resource costs forces Blossom to raise price to $9, and the firm only manages to sell 460 bottles of perfume. the price elacticity of demand is

.33 and inelastic

if the price of Pepsi decreases, then we'd expect to see a shift of the demand curve for

coke to the left

when the price of candy bars decreased from $0.55 to $0.45 the quantity demanded changed from 19,000 per day to 21,000 per day. in the price range, the price-elasticity coefficient (based on the midpoint formula) for candy bars is:

0.5

when the price of a product is increased 10%, the quantity demanded decreases 15%. the price elasticity of demand coefficient for this product is

1.5

what area on a graph is the producer surplus

the lower triangle on the left between supply and demand curve

one major element of the command system is

central planning conducted by the govt

economic growth may be represented by

a rightward shift of the production possibilities curve

when economists describe "a market" they mean

a system that allows buyers and sellers to interact with one another

what points on the graph are unamployed

anything below the curve

if farmers withhold some of their current corn harvest form the market because they anticipate a higher price of corn in the near future, then this would cause a(n)

decrease in supply of corn

an increase in the price of digital cameras will result in a(n)

decrease in the quantity demanded of digital cameras

a headline rease "LUmber Prices Up Sharply" which you'd expect would

decrease the supply of new homes

a decrease in the price of online streaming movies will cause

demand of DVDs to increase

what are the explanations for law of demand

diminishing marginal utility, substitution effect, income effect

a production system where various workers concentrate on different specialized tasks to contribute towards a whole product is referred to as

division of labor

total revenue falls as the price of a good is raised, if the demand for the good is

elastic

where is consumer surplus on a graph

in the upper left triangle

in the circular flow diagrams, households get their ability to pay for their consumption expenditures from the

incomes they earn for their resources

suppose that a more efficient way to produce a good is discoverable, thus lowering production costs for the goos. this will cause a(n)

increase in supply

a decrease in the price of digital cameras would lead to a(n)

increase in the demand of memory cards

you are newly appointed sales manager of the Rock Computer Tablets Company and have been charged with the task of increasing revenues. YOur economics consultants have informed you that at present price and output levels, price elasticity of demand for your product is less than one. you should:

increase prices

a fall in the price of milk (used in the production of ice cream) will

increase the supply of ice cream

if the price elasticity coefficient for a good is .75, the demand for that good is described as

inelastic

which of the following statements is an explanation for the law of increasing opportunity cost

many economic resources are better at producing one product rather than another

there is a shortage in a market for a product when

quantity demanded is greater than quantity supplied

a fall in the price of gasoline will cause

quantity demanded of gas to increase

if the price of a product decreases, we would expect

quantity supplied to decrease

the price elasticity of demand is a measure of the

responsiveness between price and profitability

the money income of households consisted of all the following except

revenues

Sony is considering a 10% price reduction on its HD TV sets. if the price elasticity coefficient for the sets in this price range is .75, then the price cut will cause

sales quantity to increase but revenues to decrease

a govt will create a surplus in a market when it

sets a price floor above the equilibrium price

if the price of gasoline increases significantly, then we'd exspect the demand curve for large trucks and SUVs to

shift to the left

which of the following is a positive economic statement

stock prices fell for the fourth month in a row

if a 10% increase int he price of one good A results in an increase of 5% in the quantity demanded of another good B, then it can be conducted that the two goods A and B are

substitute goods

there is a surplus of tomatoes in the market. this implies that

the current price is set above the equilibrium level

suppose that goods A and B are close substitutes. if the price of good A falls, then we would expect

the demand for B to increase