Gov't Intervention
Formulas
Elasticity
Externalities
100
5 types of intervention
What is Price controls( Price ceilings –Price floors), Quantity controls, Taxes & Subsidies?
100
The price-elasticity formula.
What is % change in quantity demanded ÷ % change in price?
100
When a percentage change in price and the resulting percentage change in quantity demanded are the same.
What is unit elasticity
100
Underproduction and underallocation of resources result when these are present.
What are spillover benefits or positive externalities?
200
The midpoint formula for the price elasticity of demand coefficient.
What is (change in quantity ÷ (sum of quantities ÷ 2)) ÷ (change in price ÷ (sum of prices ÷ 2))?
200
This measures how sensitive consumer purchases of one product are to a change in the price of some other product.
What is the cross elasticity of demand?
200
Give an example of a negative externality and graphd
What is the answer?
300
Demanders bear more of the burden of a tax when
What is Demand is relatively inelastic and Supply is relatively elastic
300
Draw a curve for perfect elasticity and perfectly inelastic
What is the answer??
300
THe responsiveness of consumers to a price change is measured by a product's _____.
What is the price elasticity of demand?
300
3 Ways to curb externalities
What is taxes (name one), quotas and cap & trade?
400
Suppliers bear more of the burden of a tax when
What is Demand is relatively elastic and Supply is relatively inelastic
400
The formula for cross-price elasticity
What is the answer
400
When the cross-price elasticity of demand is positive
What is substitute goods?
500
Draw an example of a tax burden that is on the sellers (instead of buyers)
What is the answer
500
Which of the following goods are likely to have elastic demand, and which are likely to have inelastic demand? Home heating oil Pepsi Chocolate Water Heart medication Oriental rugs
What is Elastic demand: Pepsi, chocolate, and Oriental rugs Inelastic demand: Home heating oil, water, and heart medication
500
a price increase is an increase in total revenue that results from receiving a higher price for each unit sold.
What is the price effect?
500
When the cross-price elasticity of demand is negative
What is when the goods are complements?
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