Econ 232 Exam 1 - Calhoun
Community College
How do surplus/shortage lead us to equilibrium? - CORRECT ANSWER-surplus
leads to price reductions and shortage leads to price increases both driving the
market towards equilibrium where quantity supplied equals quantity demanded
What causes a surplus? - CORRECT ANSWER-an above equilibrium price
What causes a shortage? - CORRECT ANSWER-a below equilibrium price
What is consumer surplus? - CORRECT ANSWER-the difference between the
maximum price a consumer is willing to pay for a good and the actual price they
pay for it
What is producer surplus? - CORRECT ANSWER-the producers gain from the
exchange, or the difference between the market price and the maximum price a
producer would be willing to sell a particular product
What is total surplus? - CORRECT ANSWER-consumer + producer = total surplus
What are the determinants of the various measures of elasticity? - CORRECT
ANSWER-the availability of close substitutes, whether the good is considered a
necessity or luxury, the time period being considered, and the proportion of
income spent on the good
How does the elasticity of demand and supply relate to tax policy? - CORRECT
ANSWER-by determining who bears the greater burden of a tax, the consumer or
the producer
difference between demand and quantity demanded - CORRECT ANSWER-
demand, the entire relationship between the price of a good and the quantity of
that consumers are willings and able to purchase. quantity demanded, the
specific amount of a good that consumers are willing and able to purchase at a
particular price.
difference between supply and quantity supplied - CORRECT ANSWER-supply,
the entire relationship between the price of a good and the quantity of that good
producers are willing and able to sell at a various prices quantity supplied, the
specific amount of a good that producers are willing and able to sell at a
particular price
Community College
How do surplus/shortage lead us to equilibrium? - CORRECT ANSWER-surplus
leads to price reductions and shortage leads to price increases both driving the
market towards equilibrium where quantity supplied equals quantity demanded
What causes a surplus? - CORRECT ANSWER-an above equilibrium price
What causes a shortage? - CORRECT ANSWER-a below equilibrium price
What is consumer surplus? - CORRECT ANSWER-the difference between the
maximum price a consumer is willing to pay for a good and the actual price they
pay for it
What is producer surplus? - CORRECT ANSWER-the producers gain from the
exchange, or the difference between the market price and the maximum price a
producer would be willing to sell a particular product
What is total surplus? - CORRECT ANSWER-consumer + producer = total surplus
What are the determinants of the various measures of elasticity? - CORRECT
ANSWER-the availability of close substitutes, whether the good is considered a
necessity or luxury, the time period being considered, and the proportion of
income spent on the good
How does the elasticity of demand and supply relate to tax policy? - CORRECT
ANSWER-by determining who bears the greater burden of a tax, the consumer or
the producer
difference between demand and quantity demanded - CORRECT ANSWER-
demand, the entire relationship between the price of a good and the quantity of
that consumers are willings and able to purchase. quantity demanded, the
specific amount of a good that consumers are willing and able to purchase at a
particular price.
difference between supply and quantity supplied - CORRECT ANSWER-supply,
the entire relationship between the price of a good and the quantity of that good
producers are willing and able to sell at a various prices quantity supplied, the
specific amount of a good that producers are willing and able to sell at a
particular price
