The government offers a per unit subsidy to businesses
P: decrease
Q: increase
100
income elasticity of demand > 1
elastic demand - luxury good
100
An effective price floor increases this area
What is producer surplus
100
The basic assumption of consumer preference theory is that consumers want to maximize this.
What is Total Utility
100
The value of the best alternative forgone in making any choice
What is Opportunity Cost?
200
A related good with an cross price elasticity of -0.5 drops in price.
P: increase
Q: increase
200
cross-price elasticity of demand < 0
Complimentary goods
200
If the government restricted the quantity that could be produced in a market, this is the amount that the licenses are worth.
Quota rent
200
At her current level of consumption, a consumer is willing to pay up to $1.50 for a bottle of water and up to $1,500 for a diamond ring because...
The marginal utility of the diamond ring is 1000x as great as the water bottle
200
Improvements in technology for producing all goods must result in
an outward shift of the production possibilities curve
300
The government offers lump sum subsidy to producers and a per-unit subsidy to consumers
P: increase
Q: increase
300
If the price of a good rises from $200 to $300 and the units sold decreases from 5000 to 4000, the company is producing in the _______________ range of the demand curve
inelastic
300
The tax incidence of an excise tax falls mainly on producers if the demand curve is highly...
Elastic
300
The fact that the first hour of playing at an amusement park is usually the most fun illustrates the concept of
Diminishing Marginal Utility
300
why is a production possibilities curve often represented as concave (bowed out) from the origin
Increasing Opportunity Costs
400
A increase in wages for workers while the price of a substitute falls.
P: indeterminate Q:decrease
400
Price elasticity of supply becomes more elastic as this variable increases
Time
400
Deadweight loss for a tariff that raises the price of a perfectly elastic world price falls exclusively on...
consumers
400
When the price of a product drops, consumers have increased purchasing power which contributes to this economic concept:
The Law of Demand (aka downward sloping demand curve)
400
In one hour, the United States can produce 25 tons of steel or 250 automobiles. In one hour Japan can produce 30 tons of steel or 275 automobiles. This information implies that The US has...
A comparative advantage in the production of automobiles
500
Good A and Good B are substitutes. Good A has an income elasticity of -0.3 and Good B has an income elasticity of 0.75. If consumer income rises, what will happen to the Price and Quantity for Good A?
P: indeterminate
Q: indeterminate
500
If the cross price elasticity of two goods is 0, the goods are said to be...
Unrelated
500
If the world price for a good is above the domestic equilibrium, the country will be doing this.
What is exporting the good.
500
If James eats 2 apple and 3 oranges and the MU of the 4th apple is 8 and the MU of the 6th orange is 10...
James should consume more apples
500
If it is not possible to produce more of one good without producing less of another good, the economy is said to be