Facts and Laws
Calculations
Interpretations
Graph Manipulation
Effects
100
According to this law, when the price of a good increases, the quantity demanded decreases.
What is the Law of Demand?
100
If the consumer surplus is $6 and the producer surplus is $7, then the total surplus is equal to this.
What is $13?
100
If the equilibrium price and quantity exchanged both increased, then this curve has shifted to the right.
What is the demand curve?
100
New improved technology is developed in the production of Labubus. Show the effect in the market.
What is an increase in supply?
100
This is the effect of an increase in supply on the equilibrium price.
What is an increase in price?
200
This measure is used to determine how responsive the demand or supply for a product is to a change in the price.
What is elasticity?
200
If the price elasticity of demand for Good A is 2, then a 10 percent increase in price will cause a _____ decrease in ______.
What is a 20% decrease in quantity demanded?
200
The cross-price elasticity of demand for Good A and Good B is 1.5. This indicates that the goods are related in this way.
What are substitutes?
200
Consumers learn that consuming celsius is bad for their hearts. Show the effect of this change in the market for celsius.
What is a decrease in demand?
200
A tariff will have this effect on price and quantity exchanged for a good.
What is an increase in price and a decrease in quantity?
300
This is the economics term for a tax paid by the producer per unit sold.
What is an excise tax?
300
Based on the graph below, calculate the value of the consumer surplus at equilibrium.
What is $60?
300
An increase in price and a decrease in the quantity exchanged would be indicative of what shift on the market graph?
What is a decrease in supply?
300
Peas and carrots have a cross-price elasticity of 3. Assume that the price of peas increases. Show the resulting change on the market for carrots.
What is an increase in demand for carrots?
300
An increase in the price of a complement will have this effect on the other good.
What is an decrease in demand?
400
These two effects both cause the quantity demanded to decrease when the price increases for a normal good.
What are the income and substitution effects?
400
When the price of butter increases by 10%, the quantity demanded of butter decreases by 20% and the quantity demanded of jam decreases by 15%.
____ is the cross price elasticity of demand for these products.
What is - 1.5?
400
If the income elasticity of demand for Good L is 2.5, then the good is both a ____ and a ______.
What is normal good and a luxury?
400
The government imposes an excise tax on Good X. Show the effect of the tax increase on the market and shade the area of tax revenue.
What is a decrease in supply?
400
An excise tax will have this impact on the following:
Consumer price
DWL
Total surplus
What is an increase, an increase, and a decrease?
500
The cross-price elasticity of demand between Good H and Good K measures the percentage change in the demand for Good H in response to a percent change in _____ for ____________.
What is a percentage change in price for Good K?
500
What is the total value of the DWL after this tariff is imposed?
What is $3000?
500
An indeterminate price would tell you that what change occured on the market graph?
What is a double shift of supply and demand?
500
The domestic market for pork has an equilibrium price of $6 and an equilibrium quantity of 50. Assume that the world price is $3 and there is a $2 tariff.
Draw the market including the domestic market, the world price (Ws) and the world price plus tariff (Ws + tariff).
500
This shift(s) on the market graph would lead to an increase in the equilibrium price and an indeterminate quantity exchanged.
What is an increase in demand and a decrease in supply?