T/f
Supply tends to be more elastic in the short run and more inelastic in the long run.
false (elastic, inelastic)
the behavior of buyers and sellers drives markets toward equilibrium
true
the cost of an action is measured in terms of foregone opportunities.
true
the demand for rice krispies is more elastic than the demand for cereal
true
with careful planning we can usually get something that we like without having to give up something else that we like
False. Trade offs
If the price elasticity of demand is equal to 0, demand is unit elastic.
false, perfectly inelastic
tuition is the single - largest cost of attending college for most students.
false. lost earnings and time
If the demand for a good falls when income falls the good is called an inferior good
false, normal
when an increase in the price of one good lowers the demand for another good, the two are called
complements
A market economy cannot produce a socially desirable outcome because individuals are motivated by their own selfish interest
False. Can
A rational decision maker takes an action if and only if the marginal cost exceeds the marginal benefit
f. less than
A reduction in the price of a product and an increase in the number of buyers in the market affect the demand curve in the same general way
false
It is not possible for demand and supply to shift at the same time.
false
Since taxes affect only the price paid by the buyer they cannot have an adverse impact on the allocation of society's resources.
false
an increase in the price of pizza will shift the demand curve for pizza to the left
false
Supply is said to be inelastic if the quantity supplied responds substantially to changes in the price, and elastic if the quantity supplied responds only slightly to price.
false (elastic, inelastic)
When the price of knee braces increased by 25% , the Brace Yourself Company increased their quantity supplied of knee braces per week by 75%. BYC's Price Elasticy of supply of knee braces is .33.
false 3
the law of demand states that the quantity demanded of a product is positively related to price
false negatively
baseball and baseball bats are substitute goods
false, complement
The flatter the demand curve that passes through a given point, the more inelastic the demand.
false, elastic
demand for a good is said to be inelastic if the quantity demanded increases substantially when the price falls by a small amount
false, elastic
If a company making frozen orange juice expects the price of their product to be higher next month, they will supply more to the market this month
false, less
T/F demand is inelastic if the elasticity is greater than 1
false, less
the demand for gasoline will respond more to a change in price over a period of five weeks than over a period of five years
false, less
Economics is the study of how fairly goods and services are distributed within society
false. society manages scarce resources
if a good or service has only one seller it is called an
monopoly
If a supply curve is horizontal it is said to be perfectly elastic and the price elasticity of supply approaches infinity.
tru
A marginal change is a small incremental adjustment to an existing plan of action
true
Goods with close substitutes tend to have more elastic demands than do goods without close substitutes
true
If demand is perfectly inelastic, the demand curve is vertical, and elasticity is equal to 0.
true
In a market, the price of any good adjusts until quantity demanded equals quantity supplied
true
Price Elasticity of Supply measures how much the quantity supplied responds to changes in the price.
true
Price, which is determined by all buyers and sellers as they interact the marketplace, allocates the economy's resources
true
Productivity is defined as the quantity of goods and services produced from each hour of a workers time
true
The government can potentially improve market outcomes if market inequalities or market failure exists
true
The price elasticity of Demand is defined as the percentage change in quantity demanded divided by the percentage change in price
true
The quantity demanded of a product is the amount that buyers are willing and able to purchase at a particular price
true
a local tv company could be a monopolist
true
a market is a group of buyers and sellers of a particular product
true
equity refers to how the pie is divided and efficiency refers to the size of economic pie
true
in a perfectly competitive market, buyers and sellers are price takers
true
market failure refers to a situation in which the market does not allocate resources efficiency
true
necessities tend to have price inelastic demands whereas luxuries have price elastic demands
true
scarcity means that there is less of a good or resource available than people wish to have
true
the computer software industry is an example of monopolistic competition
true
the price of calculators increases by 15% and the quantity demanded per week falls by 45%. The price elasticity of Demand is 3.
true
whenever a determinant of demand other than price changes, the demand curve shifts
true