A) the slope of a demand curve. B) the inverse of the slope of a demand curve. C) the percentage change in one variable in response to a one percent increase in another variable. D) sensitivity of price to a change in quantity. A) the slope of a demand curve. B) the inverse of the slope of a demand curve. C) the percentage change in one variable in response to a one percent increase in another variable. D) sensitivity of price to a change in quantity.

Exam 2: The Basics of Supply and Demand

The demand for tickets to the Daytona 500 NASCAR event is given by the equation Q_D = 350,000 - 800P. The supply of tickets to the event is given by the capacity of the Daytona track, which is 150,000. What is the equilibrium price of tickets to the event? What is the price elasticity of demand at the equilibrium price? What is the price elasticity of supply at the equilibrium price?

(Essay)

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Question 81

For computers and other business equipment, small changes in business earnings tend to generate relatively large short-run changes in the demand for this equipment, and the long-run income response tends to be smaller. Industries that face demand behavior of this type are known as:

(Multiple Choice)

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Question 82

Midcontinent Plastics makes 80 fiberglass truck hoods per day for large truck manufacturers. Each hood sells for $500.00. Midcontinent sells all of its product to the large truck manufacturers. Suppose the own price elasticity of demand for hoods is 0.4 and the price elasticity of supply is 1.5. a. Compute the slope and intercept coefficients for the linear supply and demand equations. b. If the local county government imposed a per unit tax of $25.00 per hood manufactured, what would be the new equilibrium price of hoods to the truck manufacturer? c. Would a per unit tax on hoods change the revenue received by Midcontinent?

(Essay)

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Question 83

Suppose the U.S. government imposes a maximum price of $5 per gallon of gasoline, and the current equilibrium price is $3.50 per gallon. This policy represents a:

(Multiple Choice)

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Question 84

If we plot the quantity of aluminum ore mined per year on the horizontal axis and the real annual price of aluminum ore on the vertical axis, we find that the path of price-quantity combinations generally indicates lower real prices and higher quantities over time. Which of the following statements is a plausible explanation for this observed outcome?

(Multiple Choice)

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Question 85

The price elasticity of demand for a demand curve that has a zero slope is

(Multiple Choice)

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Question 86

A demand curve of the form: Q = a - bP, where a and b are positive real numbers,:

(Multiple Choice)

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Question 87

Elasticity measures

(Multiple Choice)

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Question 88

Suppose the supply of textbooks is upward sloping and shifts leftward due to higher ink and paper costs. Which of the following events would leave the equilibrium price of textbooks at the same level observed before the supply shift?

(Multiple Choice)

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Question 89

Which of the following will NOT cause a shift in the supply of gasoline?

(Multiple Choice)

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Question 90

Use the following statements to answer this question: I. Even though people need water to survive, the price of water is less than the price of diamonds because water is in greater supply than diamonds. II. Suppose that the demand for corn is highly price inelastic. If every corn farmer's harvesting technologies become more efficient, the total revenue received by all corn farmers would fall.

(Multiple Choice)

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Question 91

Suppose the demand for gourmet coffee can be represented by a linear demand curve. At the prevailing market price the income elasticity of demand for gourmet coffee is 2. When income rises the demand curve for gourmet coffee:

(Multiple Choice)

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Question 92

Consider a supply curve of the form: Q = c + dP. If d equals zero, then supply is:

(Multiple Choice)

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Question 93

When the government controls the price of a product, causing the market price to be above the free market equilibrium price,

(Multiple Choice)

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Question 94

Which of the following would cause an unambiguous decrease in the real price of DVD players?

(Multiple Choice)

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Question 95

Suppose the supply of coal is perfectly inelastic, and the price elasticity of demand for coal is -0.4. If the government imposes a binding price ceiling for coal at a price that is 20 percent below the market equilibrium price, what is the impact of this policy on the market quantity?

(Multiple Choice)

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Question 96

Which of the following would cause a shift to the right of the supply curve for gasoline? I. A large increase in the price of public transportation. II. A large decrease in the price of automobiles. III. A large reduction in the costs of producing gasoline.

(Multiple Choice)

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Question 97

A price floor policy establishes a minimum price for a market, and the policy is said to be binding if the market equilibrium price is less than the floor price. What impact does a binding price floor have on the market outcome?

(Multiple Choice)

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Question 98

Along any downward sloping straight-line demand curve:

(Multiple Choice)

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Question 99

As long as the actual market price exceeds the equilibrium market price, there will be:

(Multiple Choice)

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Question 100

Showing 81 - 100 of 135

For computers and other business equipment, small changes in business earnings tend to generate relatively large short-run changes in the demand for this equipment, and the long-run income response tends to be smaller. Industries that face demand behavior of this type are known as:

Suppose the U.S. government imposes a maximum price of $5 per gallon of gasoline, and the current equilibrium price is $3.50 per gallon. This policy represents a:

The price elasticity of demand for a demand curve that has a zero slope is

A demand curve of the form: Q = a - bP, where a and b are positive real numbers,:

Elasticity measures

Suppose the supply of textbooks is upward sloping and shifts leftward due to higher ink and paper costs. Which of the following events would leave the equilibrium price of textbooks at the same level observed before the supply shift?

Which of the following will NOT cause a shift in the supply of gasoline?

Suppose the demand for gourmet coffee can be represented by a linear demand curve. At the prevailing market price the income elasticity of demand for gourmet coffee is 2. When income rises the demand curve for gourmet coffee:

Consider a supply curve of the form: Q = c + dP. If d equals zero, then supply is:

When the government controls the price of a product, causing the market price to be above the free market equilibrium price,

Which of the following would cause an unambiguous decrease in the real price of DVD players?

Suppose the supply of coal is perfectly inelastic, and the price elasticity of demand for coal is -0.4. If the government imposes a binding price ceiling for coal at a price that is 20 percent below the market equilibrium price, what is the impact of this policy on the market quantity?

Which of the following would cause a shift to the right of the supply curve for gasoline? I. A large increase in the price of public transportation. II. A large decrease in the price of automobiles. III. A large reduction in the costs of producing gasoline.

A price floor policy establishes a minimum price for a market, and the policy is said to be binding if the market equilibrium price is less than the floor price. What impact does a binding price floor have on the market outcome?

Along any downward sloping straight-line demand curve:

As long as the actual market price exceeds the equilibrium market price, there will be:

Preliminaries

Consumer Behavior

Individual and Market Demand

Uncertainty and Consumer Behavior

Production

The Cost of Production

Profit Maximization and Competitive Supply

The Analysis of Competitive Markets

Market Power: Monopoly and Monopsony

Pricing With Market Power

Monopolistic Competition and Oligopoly

Game Theory and Competitive Strategy

Markets for Factor Inputs

Investment, Time, and Capital Markets

General Equilibrium and Economic Efficiency

Markets With Asymmetric Information

Externalities and Public Goods

Filters