The law of demand states that, other things equal, when the price of a good rises, this falls.
What is the quantity demanded
100
This will happen to demand for used cars when your income rises
What is it will decrease
100
The price elasticity of demand measures a response in this variable to a change in this variable
What is quantity demanded, price
100
A price ceiling will be binding only if it set here
What is below equilibrium price
100
This is the price that balances the quantity supplied and the quantity demanded.
What is the equilibrium price
200
The law of supply states that the incentive to supply a larger quantity comes as a result of this
What is an increase in price
200
This is a situation in which quantity supplied is greater than the quantity demanded
What is a surplus
200
On a graph with multiple demand curves, the steepest one represents this end of the elasticity spectrum
What is the most inelastic
200
a minimum wage that is set above a market's equilibrium wage will result in an excess of this
What is supply of labor
200
This will happen to the market for valentine's chocolates when cocoa beans become more expensive. (Describe the change and the new equilibrium)
What is Equilibrium price increases and equilibrium quantity decreases.
300
This is a combination of changes in supply and demand (increase, decrease) that would produce an indeterminate change in quantity and a decrease in equilibrium price.
What is an increase in supply and a decrease in demand
300
a rational decision maker takes an action only if the marginal benefit exceeds this
What is marginal cost
300
This is the sign of the cross price elasticity of demand for complement goods
What is negative
300
This is a rationing mechanism, that is inefficient and potentially unfair
What is discrimination according to seller bias
300
Using elasticity analysis, this is the effect of drug interdiction policy on drug-related crime. Explain.
What is increase in drug related crime because drugs are an inelastic good (prices rise and quantity demanded barely falls)
400
The law of supply states this.
Producers have an incentive to supply more of their good at higher prices, since their profit margins expand.
400
This will happen in the market for bacon when the price of a dozen eggs falls. (Describe the change and the new equilibrium)
What is demand for bacon will increase, causing an increase in equilibrium price and and increase in equilibrium quantity
400
You are the manager at the local movie theater. The regional manager advises you to decrease the price of a day pass and your assistant manager advises you to increase the price of a day pass. This is the person that thinks demand is elastic.
Who is the regional manager (elastic demand will exhibit a larger quantity increase than price decrease, raising revenues)
400
When a tax is placed on the buyers of cigarettes, these people will bear the burden of the tax
the buyers and sellers will share the burden, with the less elastic group bearing the most burden
400
In the long run, this is the effect of a binding price floor on the market. (Shortage or Surplus, gets bigger or smaller). Explain.
What is the surplus gets larger because in the long run supply and demand are more elastic.
500
These are the five shifters of demand
What is # of buyers, income, price of related goods, tastes and preferences, and expectations
500
These are the four shifters of supply
What is # of sellers, technology, input prices, and expectations
500
If the price elasticity of demand for a good is 0.5, then a 10 percent decrease in price results in this percent increase in quantity demanded
What is 5 percent
500
In the presence of a tax, t, we are trying to find two prices, Pb and Ps, such that this equation is true
What is Pb-Ps=t
500
In the market for icecream there is a simulanteous increase in demand and decrease in supply. This is the resulting equilibrium change.(Describe the changes and the new equilibrium)
What is The equilibrium price increases, however the effect on equilibrium quantity is ambiguous.