Basics
Sam skips a $120 shift to attend a friend's wedding. The $120 is this type of cost.
What is opportunity cost?
Price rises from $10 to $12 and quantity falls from 50 to 40. By the midpoint method, elasticity is about this.
What is 1.22?
A maximum legal price is called this.
What is a price ceiling?
When the price of coffee rises, this happens to the quantity of coffee demanded.
What is a movement along the demand curve (quantity demanded falls)?
Who bears the economic burden of a tax, regardless of who legally pays it, is called this.
What is tax incidence?
When people's wants exceed the resources available to satisfy them, this condition exists.
What is scarcity?
An elasticity of 0.4 means demand is this.
What is inelastic?
A price ceiling on rent set below equilibrium causes this.
What is a shortage?
Tea and coffee are substitutes. When the price of tea rises, the demand curve for coffee shifts this way.
What is right (increases)?
If demand is highly inelastic, this group pays the majority of the tax, and the deadweight loss is small.
Who are consumers?
Deciding whether to study one more hour by comparing its extra benefit to its extra cost is this kind of analysis.
What is marginal analysis (trade-off analysis)?
A pizza shop raises its prices and its total revenue falls. Demand for its pizza must be this.
What is elastic?
A price floor set below the equilibrium price has this effect.
What is no effect (it isn't binding)?
Instant ramen is an inferior good. When incomes rise, its demand shifts left, and equilibrium price and quantity both do this.
What is fall (decrease)?
equilibrium is $10 and 100 units. A $4 per-unit tax leaves buyers paying $12, sellers keeping $8, and 80 units sold.
The share of the tax borne by consumers is this.
What is 50% or $2?
An economy is this when no one can be made better off without making someone else worse off.
What is efficient?
Income rises 10% and quantity demanded of a good falls 5%, so the good is this type.
An inferior good?
Price Qd Qs
$1 90 30
$2 70 50
$3 50 70
$4 30 90
Using the table, a price floor of $4 creates a surplus of this many cups.
What is 60?
Farmers can grow either wheat or corn. When the price of wheat rises, the supply of corn does this.
What is decreases (shifts left)?
equilibrium is $10 and 100 units. A $4 per-unit tax leaves buyers paying $12, sellers keeping $8, and 80 units sold.
Government tax revenue is this.
What is $320?
Total surplus equals consumer surplus plus this.
What is producer surplus?
A venue sells 800 tickets at $50, and demand elasticity is 2. If it cuts the price 10%, quantity rises by this percent and total revenue does this.
What is 20%, and revenue rises?
Price Qd Qs
$1 90 30
$2 70 50
$3 50 70
$4 30 90
Using the table, a price ceiling of $1 creates a shortage of 60, but this many cups are actually sold.
What is 30?
Demand and supply of electric scooters both increase. Equilibrium quantity does this, while the effect on price is ambiguous.
What is increases?
equilibrium is $10 and 100 units. A $4 per-unit tax leaves buyers paying $12, sellers keeping $8, and 80 units sold.
Deadweight loss is this.
What is $40?
(½ × $4 × 20 units)