Micro Basics
Taylor turns down a $150 shift to attend a concert. The $150 is this type of cost.
What is opportunity cost?
An elasticity of 0.3 means demand is this.
What is inelastic?
Consumer surplus is willingness to pay minus this.
What is the price paid?
A minimum legal price is called this.
What is a price floor?
When incomes fall, demand for restaurant meals (a normal good) shifts this way.
What is left (decreases)?
This problem exists because resources are limited while wants are unlimited.
What is scarcity?
Price rises from $8 to $12 and quantity falls from 100 to 60. By the midpoint method, elasticity is this.
What is 1.25?
Producer surplus is the price received minus this.
What is cost (the minimum price the seller will accept)?
A binding price ceiling creates this in a market.
What is a shortage?
A good has an elasticity of 2.5, so demand is this, and a price cut makes total revenue do this.
What are elastic and rises?
Deciding whether to produce one more unit by comparing its extra benefit to its extra cost is this kind of analysis.
What is marginal analysis?
When demand is elastic and the price falls, total revenue does this.
What is rises (increases)?
Lena would pay up to $15 for a haircut and pays $9. Her consumer surplus is this.
What is $6?
A $6 per-unit tax raises the price consumers pay by $4. Producers bear this much per unit.
What is $2?
Peanut butter and jelly are complements. When the price of jelly rises, demand for peanut butter does this.
What is decreases (shifts left)?
When markets fail to produce an efficient outcome, such as when property rights are missing, economists call it this.
What is market failure?
Income rises 8% and quantity demanded rises 12%. The income elasticity is this, so the good is this type.
What is 1.5, a normal good (luxury)?
Three sellers have costs of $3, $5, and $9. At a price of $6, total producer surplus is this.
What is $4?
A $5 per-unit tax leaves 40 units sold. Tax revenue is this.
What is $200?
Under a binding price ceiling, quantity demanded is 120 and quantity supplied is 80. The shortage is this, and this many units are actually traded.
What are 40 and 80?
An economy is this when no one can be made better off without making someone else worse off.
What is efficient?
A store sells 200 units at $20 each, and demand elasticity is 0.5. If it raises the price 10%, total revenue rises by about this dollar amount.
What is $180?
Two buyers are willing to pay $12 and $7. When the price falls from $9 to $5, total consumer surplus rises by this amount.
What is $6?
If demand is perfectly inelastic, a per-unit tax is paid entirely by this group, and the deadweight loss is this.
What are consumers, and zero?
Both demand and supply for e-scooters increase. Equilibrium quantity does this, while the effect on price is ambiguous.
What is increases?