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29 Cards in this Set
- Front
- Back
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Which of the following represents the price elasticity of demand? |
(ΔQ/ΔP) X (P/Q) |
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For an individual who consumes only 2 goods, X and Y, the opportunity cost of consuming one unit of X in terms of how much Y must be given up is reflected in... |
The slope of the individuals budget constraint |
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Two goods, X and Y, are called substitutes if.. |
when the price of X increases, more Y is purchased |
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Two goods, X and Y, are called complements if.. |
an increase in the price of X causes less Y to be purchased |
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Which of the following will not cause a demand curve to shift position? |
a doubling of the goods price |
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If the income elasticity of demand is 1.25, the good is.. |
a luxury |
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Identify the non convex preferences from these utility functions.. |
x^3+y^3 |
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what kind of scale would a 0-5 star movie rating system be.. |
ordinal but not cardinal |
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The assumption that preferences are complete means what? |
That the consumer can compare any two market baskets of goods and determine that either one is preferred to the other or that she is indifferent between them |
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The magnitude of the slope of an indifference curve is called... |
the marginal rate of substitution |
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If prices and income in a 2 good society double, what will happen to the budget line? |
There will be no effect on the budget line |
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When the income consumption curve has a positive slope throughout its entire length, we can conclude that... |
both goods are normal |
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Consider two goods X and Y available for consumption. Assume that the price of X changes while the price of Y remains fixed. For these two goods, the price-consumption curve illustrates the... |
utility-maximizing combination of X and Y, for each price of X |
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Income-Consumption Curve for Dana between Qa and Qb is given as: Qa=2Qb With Pa=5, Pb=12, and, income, I=440. How much Qa will Dana consume to maximize utility? |
40 |
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Jon's income-consumption curve is a straight line form the origin with a positive slope. Now suppose that Jon's preferences change such that his income-consumption curve remains a straight line, but rotates 15 degrees clockwise. Jon's demand curve for the good on the horizontal axis.. |
will shift right |
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The change in the quantity demanded of a good resulting from a change in relative price with the level of satisfaction held constant is called the... |
Substitution effect |
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The demand for sirloin steak is probably more elastic than the demand for all meat because |
there are more substitutes for sirloin steak than for all meats |
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The price elasticity of demand for a linear demand curve follows the pattern (moving from high price to low price) ... |
elastic, unit elastic, inelastic |
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Suppose that the demand for artichokes (Qa) is given as: Qa=200-4p What is the price elasticity of demand if the price of artichokes is $10 |
+0.25 |
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Suppose that the demand for artichokes (Qa) is given as: Qa=200-4p Suppose that the price of artichokes is increased slightly from $10. The total expenditure by consumers on artichokes will _____ and the number of artichokes sold will _____. |
rise; fall |
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Suppose that the demand for artichokes (Qa) is given as: Qa=200-4p At what price, if any, is the demand for artichokes unitary elastic? |
$25, None of the above |
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To determine whether an increase in the price of gasoline results in a consumer spending a larger share of their expenditure on gasoline, we need to know.. |
Only the own price elasticity of demand for gasoline |
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Gold buyers are located in NY and Zurich. At the current price of gold, $1200 an oz, worldwide demand for gold is 10,000 oz; and the price elasticity of demand for gold in NY and Zurich are +3 and +2 respectively. If the slope of each demand curve in NY is the same as Zurich, then the quantity of gold demanded by dealers in Zurich is... |
6,000 |
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Many governments around the world attempt to improve the incomes of commodity producers by taking steps to increase the commodity price in the domestic market. Although this may reduce quantity demanded for the product, the action may be effective because... |
commodity demand tends to be inelastic, so higher prices generate higher sales revenue. |
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The figure to the right shows Bobby's indifference map for juice and snacks. Also shown are 3 budget lines resulting from different prices for snacks assuming he has $20 to spend on these goods. Which of the following points are on Bobby's price-consumption curve? |
10 snacks and 15 juices |
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The figure to the right shows Bobby's indifference map for juice and snacks. Also shown are 3 budget lines resulting from different prices for snacks assuming he has $20 to spend on these goods. Which of the following points are on Bobby's demand curve for snacks? |
p=2, q=5 |
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Refer to the indifference curves shown to the left. Which of the following statements is correct? |
This individual receives no satisfaction from good B |
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Theodore's budget line has changed from A to B. Which of the following explains the change in Theodore's budget line? |
The price of food decreased and the price of clothing increased |
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MRS for √X+√Y |
(Y/X)^1/2 |
