W4 quiz
using the midpoint method, if the price falls from $200 to $150, the price elasitcity of demand is
elastic
Wendy is willing to pay $50 for a concert ticket and Bruce would like to receive $25. if the market price is $40 for this transaction, then the total surplus would be $15
false
if the price elasticity of supply is 0.5 and the quantity supplied decreases by 6%, then the price must have decreased by 3%
false
total surplus in a market can be measured as the area below the supply curve plus the area above the demand curve, up to the point of equilibrium
false
the particular price that results in quantity supplied being equal to quantity demanded is the best price because it
maximizes the combined welfare of buyers and sellers
the price elasticity of supply measures how much
the quantity supplied responds to changes in the price of the good
suppose that two supply curves pass through the same point. one is steep, and the other is flat. which of the following statements is correct
the steeper supply curve represents a supply that is inelastic relative to the supply represented by the flatter supply curve
the area below the price and above the supply curve measures the producer surplus in a market
true
if the price a consumer pays for a product is equal to a consumer's willingness to pay, then the consumer surplus relevant to that purchase is
zero
when the price is P2, producer surplus is
A+B+C
on a graph, consumer surplus is respresented by the area
below the demand curve and above the price
the price elasticity of demand measures
buyers' responsiveness to a change in the price of a good
producer surplus is
the amount a seller is paid minus the cost of production
if the price of walnuts rises, many people would switch from consuming walnuts to consuming pecans. but if the price of salt rises, people would have difficulty purchasing something to use in its place. these examples illustrate the importance of
the availability of close substitutes in determining the price elasticity of demand
you are in charge of the local city-owned aquatic center. you need to increase the revenue generated by the aquatic center to meet expenses. the mayor advises you to increase the price of a day pass. the city manager recommends reducing the price of a day pass. you realize that
the mayor thinks demand is inelastic, and the city manager thinks demand is elastic
