Supply
Demand
Price Controls
Quantity Controls
Taxes
100
A decrease in supply, with no change in demand will lead to _______ in equilibrium quantity
A decrease
100
If there is a shift in taste favoring pineapple, what will happen to the demand of pineapples?
It will shift rightward (increase).
100
What effect does a price ceiling have on quantity supplied?
It causes it to decrease.
100
What is another name of a quantity control?
A quota
100
When a tax is levied on a consumer, what happens to the supply and demand curves?
The supply curve stays the same and the demand curve contracts.
200
If there was an increase in supply because of a change in technology increased production, what would happen to the equilibrium price and quantity?
The equilibrium price would decrease and the equilibrium quantity would increase.
200
What might cause a shift in the demand curve?
>Change in the prices of related goods >Changes in income >Changes in taste >Changes in expectations
200
Minimum wage is an example of what?
A price floor (it is a legal floor on the wage rate)
200
Why is it that a quota set on the right of equilibrium has no effect?
The market will still only produce and consume at the equilibrium price and quantity.
200
What is an excise tax?
A tax on the sales of a good or service.
300
An increase in supply and a decrease demand will lead to what effect will that have on equilibrium price and quantity?
The price will decrease and quantity is indeterminate.
300
What is the primary difference in change in demand and change in quantity demanded?
A change in quantity demanded is a movement along the demand curve and a change in demand is a shift in the demand curve
300
A price ceiling will only have effect if...?
It is set below the equilibrium price.
300
If you were to impose a quota on the number of peaches sold, what would happen to the price for consumers?
The price would increase.
300
How do you calculate the revenue from a tax?
You multiply the height of the price wedge by the width of the quantity bought and sold under the tax.
400
If the government imposes a tax on producers what happens to the supply curve?
It contracts.
400
If the demand for a good decreases when there is an increase in income, what type of good is this?
An inferior good.
400
When a price ceiling is imposed, what types of inefficiencies occur?
>Inefficient allocation to consumers >Wasted resources >Inefficiently low quality >Black market activity
400
What is the definition of quota rent?
The difference between the demand price and the supply price at the quota limit.
400
What is the incidence of a tax?
Who pays the tax to the government (the producer or the consumer)
500
There is an excess in supply when the price is _______.
Above equilibrium price.
500
If there were an increase in the price of jelly, what is likely to happen to the demand of peanut butter?
It will contract.
500
The government sets a price ceiling of $4.00 on watermelon. The current price is $4.15. What effect will this have?
>Cause a shortage of watermelons >Quantity supplied will decrease >Quantity demanded will increase
500
Is a tax like a quota?
Yes
500
When a tax is levied on the consumer, what happens to the demand curve?
It shifts downward by the amount of the tax.
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