Supply and Demand
Draw a properly labeled graph and draw the change based on the following scenario.
Suppose that aluminum is a key production input in the production of bicycles. If the price of aluminum rises, and all other variables are held constant.
Decrease in supply
Total revenue falls as the price of a good increases if price elasticity of demand is...
Elastic
What is the definition of producer surplus?
The difference between the price received by a seller and the amount they were willing to sell it for.
Assume a market is in equilibrium. What happens to producer surplus if a binding price ceiling is imposed?
Decrease
This president is on the $10 bill
Alexander Hamilton
Draw a graph with a demand curve for doughnuts.
Show what happens to the demand for doughnuts when the price of muffins (substitute) decreases.
Decrease in demand (substitute good becomes cheaper)
Suppose a fall in the price of blueberries from $6 to $4 per bushel increases the quantity demanded from 3,000 to 5,000 bushels. Calculate the PED and determine if demand is elastic, inelastic or unit elastic.
2, elastic
Amount WTP down to the price.
To be binding, a price floor must be where with respect to equilibrium price?
Above equilibrium price
The three primary colors
Yellow, Blue, Red
Draw a properly labeled graph with a supply curve for coffee.
Show the change on the graph if the government grants coffee producers a subsidy for every pound of coffee sold.
Increase in Supply
Assume that the price for mid-sized bulldozers increased from $250,000 to $300,000 and the quantity supplied increased from 2,000 to 2,200. Calculate the price elasticity of supply coefficient and determine if supply is elastic, inelastic or unit elastic.
.5 inelastic
Equilibrium Price= $20, EQ= 100, highest willingness to pay is $40. How much total consumer surplus do all the buyers receive when the market is at equilibrium?
CS= $1000
This is a legal minimum price imposed on a market
Price floor
First ever live sporting event broadcast on television in 1936 that featured Jesse Owens' historic win.
Olympic Games in Berlin
There has been an increase in demand for Good X while at the same time the input prices for Good X have increased.
Given the scenario:What will likely happen to the equilibrium price and equilibrium quantity of Good X?
Price would increase; Quantity would be indeterminate.
Suppose that a decrease in the price from $20 to $10 of Good X resulted in a decrease in the quantity demanded from 1,000 to 800 of Good Y. Calculate the cross price elasticity of demand and state if they are complements or substitutes.
.4; Substitutes
A price floor would cause a larger loss of consumer or producer surplus?
Consumer Surplus
This morbid wedge is created when a tax is levied on a good or service?
Deadweight loss
This celebrity holds the record for fulfilling the most Make-A-Wish requests at 650.
John Cena
The apple market is in equilibrium. Suppose we observe the apple growers are using more pesticides to increase apple production. At the same time, we hear that the price of pears, a substitute for apples is rising. What will happen to the price and quantity of apples?
Price Indeterminate
Quantity Increase
Suppose that Sean received an increase in his income from $6,000 to $18,000 of Good L. This increase in income resulted in a decrease in the quantity demanded from 2,000 to 1,500 of Good O. Calculate the income elasticity of demand and state if they are normal or inferior goods.
-.125; inferior
Consumer + Producer Surplus=
Economic Surplus
The consumer pays all of the tax when the demand curve is this two word term?
Perfectly inelastic
The four U.S. state capitals with the word “City” in their name
Jefferson City, Oklahoma City, Carson City, Salt Lake City