supply
demand
advantage/elasticity
Price floor and ceilings
Surplus and Shortage
Surplus and Shortage
Misc
100
According to the law of supply, as the price of a good increases, the quantity supplied ___________.
increases
100
According to the law of demand, as the price decreases, the quantity demanded ___________.
increases.
100
If a person makes the greatest quantity of Good A in the maximum amount of time available, what kind of advantage do they have?
absolute advantage
100
A binding price ceiling is __________ market equilibrium.
A binding price floor is __________ market equilibrium.
below; above
100
If Quantity demanded is larger than Quantity supplied, is there a shortage or surplus?
shortage
200
In the market for cars, there has been technological advancement that makes it easier and cheaper to assemble them.
Where does supply shift?
Supply would shift out (or to the right)
200
The price of Crunch bars decrease. What happens in the market for Kit-Kats? (Which way does demand shift)
Demand shifts left (or decreases)
200
If demand is inelastic, a change in price will result in how much of a change in quantity demanded?
not very much change in Qd
200
If there is a price floor above market equilibrium, is there a shortage or surplus?
surplus
200
if the world price is above domestic price equilibrium, will we import or export?
We will expert at this price.
300
There is an incoming hurricane close to Florida. What would happen in the market for oranges?
Supply shifts to the left and prices increase because many oranges will be destroyed, reducing the quantity available.
300
People find out that Papa John's is racist. Show the demand shift and where the surplus or shortage is.
demand shifts left (or decreases)
300
Yesterday, the price of envelopes was $3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Julie is now willing to buy 8 boxes. Is Julie's demand for envelopes elastic or inelastic? What is her elasticity of demand?
E = 1
unit elastic
300
If there is a price ceiling above equilibrium, is there a shortage or surplus?
Neither; a price ceiling above equilibrium is not binding
300
If the world price is below the domestic market equilibrium, show producer and consumer surplus before and after the world price is added.
World price under domestic equilibrium will lead to imports with more consumer surplus than producer surplus.
400
In the market for cotton, sellers find the trade to be less profitable and start exiting the market. Which way will the supply curve shift and will there be a surplus or shortage?
Supply shifts left and there will be a shortage.
400
In the market for iPhones, people expect the price to decrease in the future. Show the change in consumer demand.
Demand shifts right (decreases)
400
There is a price ceiling below market equilibrium.
indicate whether this ceiling is binding
the price ceiling is binding
400
If the world price is below domestic market equilibrium, a tarrif is often imposed. Show consumer surplus producer surplus.
500
In the market for a certain pharmaceutical drug, the cost of development has become more expensive. Show:
supply shift
consumer and producer surplus before and after
shortage or surplus
supply shifts left
500
If printers become more expensive, show how the market for ink cartridges is affected.
demand shift
shortage or surplus
Demand shifts left (or decreases)
There will be a surplus of ink cartridges
500
There is a price floor above equilibrium. Show:
surplus or shortage
if the price floor is binding
500
Identify which one of these scenarios does not cause a shift on the supply or the demand curve
a. Bread prices increase after a bad harvest decreases the amount of wheat available.
b. Donuts from Kream cost more than donuts from Crispy Kreme
c. Apple makes the iPhone more expensive.
d. After getting a new job you start to buy Bluebell instead of Great Value icecream.
c. Apple makes the iPhone more expensive