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19 Cards in this Set
- Front
- Back
- 3rd side (hint)
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The price elasticity of demand measures how much |
Quantity demanded responds to a change in price |
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Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded. Price Elasticity of demand for X is |
1 |
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As price falls from Pa to Pb, which demand curve represents the most elastic demand? |
D1 |
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The table shows the demand schedule for a particular good. Using the midpoint method, what is the price elasticity of demand when price rises from $9 to $12? |
2.33 |
A=price B=Quantity |
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The case of perfectly elastic demand is illustrated by a demand curve that is |
Horizontal |
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Muriel's income elasticity of demand for football tickets is 1.50. All else equal, this means that if her income increases by 20 percent, she will buy |
30 percent more football tickets. |
EoD * Increase in income |
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This could be the cross-price elasticity of demand for two goods that are compliments? |
-1.3 |
Cross-Price elasticity of demand for compliments are always negative |
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If a 25% change in price results in a 40% change in quantity supplied, then the price elasticity of supply is |
1.60 and supply is elastic |
Change in quantity supplied / change in price |
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If the price elasticity of supply for a good is equal to infinity, then |
The supply curve is horizontal |
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Given the market for illegal drugs, when the government is successful in reducing the flow of drugs into the United States, |
Supply decreases, demand is unaffected, and price increases |
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A price ceiling will be binding only if it is set |
Below the equilibrium price. |
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A minimum wage that is set above a market's equilibrium wage will result in |
An excess supply of labor, that is, unemployment |
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If the government removes a tax on sellers of a good and imposes the same tax on buyers of the good, then the price paid by buyers will |
Not change and the price received by sellers will not change. |
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The price buyers pay after the tax is imposed is |
$8 |
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The burden of the tax on sellers is |
$1 per unit |
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Suppose that in a particular market, the demand curve is highly elastic and the supply curve is highly inelastic. If a tax is imposed on this market, then |
The sellers will bear a greater burden of the tax than the buyers. |
Inelastic figure bears the greater burden |
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Consumer Surplus is |
The amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it. |
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If the price of the product is $18, then the total consumer Surplus is |
$46 |
If one person has less than the price of the product they are not added in Surplus calculations |
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When the price is P1, consumer Surplus is |
A+B+C |
Surplus is above the horizontal P1 line |
