Sapling Learning Questions Test 2
those opposed to high minimum wage argue that the elasticity of labor demand for unskilled labor is ___. this is because firms can adjust their employment and production better in the long run
elastic
if a minimum wage is set above the equilibrium wage, then the more ___ the labor supply and the more ____ the labor demand, the higher the unemployment rate. In the long run, both labor supply and labor demanded are more ____
elastic elastic elastic
the more ____ the demand and the more ___ the supply
elastic inelastic
If income elasticity of demand for ibuprofen was 0.73, then you could say that ibuprofen is ______
normal good
If the price elasticity of supply for aluminum is 0.09, then price elasticy of supply for aluminum is
relatively inelastic
One explanation for this is that in the long run, firms can make changes to the amount of housing they provide ____ easily than (as) they can in the short run
more
cosmetic surgery more or less elastic than emergency surgery?
more
wall street journal more or less elastic than wall street journal at the airport?
more
demand for a luxury item tends to be
more elastic
demand for an object that uses a large portion of your budget tends to be
more elastic
over longer periods of time demand tends to be
more elastic
You are the product manager of Tide at Proctor and Gamble. The company is considering a 18.00% price increase and the CEO asks you to tell him how quantity demanded will change as a result. You know that the price elasticity for Tide is -1.10. You answer the CEO that quantity demanded will change by
-19.8%
CapCityMetro decides to increase bus fare rates from $2.00 to $2.21. Consequently, the number of passengers who decide to take the bus in Austin drops from an average of 70,000 riders a day to an average of 61,000 riders a day.
elastic
equation for price elasticity of demand
ED = percentage change in the quantity demanded/ percentage change in price
TF? A problem with price ceilings is that they lead in surpluses
False
TF? Price ceilings result in resources being allocated to activities with the highest possible values
False
TF? Though they may face higher prices, consumers usually see an increase in product quality when price ceilings are imposed
False
how does price elasticity of supply measure?
How responsive quantity supplied is to a change in price
When Ruko, a device used to stream movies at home, increases prices by 51% total revenue decreases by 67%.
elastic
TF? Price ceilings result in a reduction in mutually beneficial exchanges
True
TF? When price ceillings are imposed, consumers pay lower explicit prices but often face higher costs in terms of waiting in line for goods and services
True
What is the advocate's economic reasoning?
a higher minimum wage would only slightly depress the labor market for unskilled labor
Betty purchases raw (unpasteurized) milk even though the sale of raw milk is illegal
black market
total inefficiency caused by a tax is also known as
deadweight loss
governments that are interested in minimizing the efficiency costs of taxation should only tax goods where
demand or supply, or both, are relatively inelastic
What does income elasticity of demand measure?
how responsive quantity demanded is to changes in income
what does cross elasticity of demand measure?
how responsive the quantity demanded of one good is to changes in the price of another
welfare economics studies
how the allocation of resources affects everybody's well-being
Advocates believe elasticity of labor demanded is ...
inelastic
Economists working for the United States have determined that the elasticity of demand for gasoline is 0.5.
inelastic
When BlueBox, a DVD rental kiosk, increases its prices by 48%, total revenue increases by 22%.
inelastic
Because of differences in firms' ability to make changes to quantity supplied, the long-run supply curve for housing is modeled as a line that is ___ sleep than (as) the short-run supply curve
less
Therefore, supply is ___ elastic in the short run than (as) in the long run
less
monthly electric consumption more or less elastic than emergency surgery?
less
with fewer substitutes demand tends to be
less elastic
In the long run, the shortages of available housing resulting from rent controls are ____ pronounced that (as) they are in the short run
more
What is an example of price gouging law?
the gvnmt places a price ceiling on flashlights. the price ceiling is normally non-binding and is intended to keep prices from getting too high after a natural disaster
consumer surplus is equal to the difference between
the max price a buyer is willing to pay and the market price
What is a price ceiling?
the maximum price that can be charged
Suppose the cross elasticity of demand between Aleve and aspirin is 2.51. What can you say about Aleve and aspirin?
they are substitute goods
consumer surplus is shown graphically as the area
under the demand curve and above the market price
Contain Yourself!, a plastic container company, raises the price of its signature \"lunchbox\" container from $3.00 to $4.00. As a result, the quantity sold drops from 20,000 to 15,000.
unit-elastic
When Cinema Supreme decreases ticket prices by 5%, total revenue does not change.
unit-elastic
