ECN 211 FINAL EXAM
When income increases... - ANS-demand for inferior goods decrease and demand for
normal goods increase
price change causes a movement along - ANS-the demand curve (demand
increase=right demand decrease=left)
market quantity demand - ANS-sum of all individual demands
What would cause a supply curve to shift right? - ANS-increase in supply (example:
improvement in production technology)
a competitive market... - ANS-has many buyers and sellers, no single buyer or seller
can influence the price
when an input price decreases - ANS-supply for the good made increases
A movement downward and to the left along a supply curve is - ANS-a decrease in the
quantity supplied caused by a decrease in the price
an increase in the number of sellers causes - ANS-an increase in the market supply =
right shift
market quantity supplied - ANS-sum of all individual supplies
supply curve could shift - ANS-in response to a change in the expected future price
surplus - ANS-A situation in which quantity supplied is greater than quantity demanded
shortage - ANS-A situation in which quantity demanded is greater than quantity supplied
When demand increases and supply decreases, - ANS-equilibrium price rises
When demand decreases and supply increases, - ANS-equilibrium price falls
price ceiling - ANS-a maximum price that can be legally charged for a good or service
, price floor - ANS-a minimum price for a good or service
When supply is more elastic than demand - ANS-buyers bear most of the tax burden
When demand is more elastic than supply - ANS-sellers bear most of the burden of the
tax
a payroll tax has the effect of - ANS-increasing the wages paid by firms and decreasing
the wages received by workers.
A binding price ceiling - ANS-set below the market price (equilibrium)
The tax per unit is - ANS-the difference between the price the buyers pay after the tax
and the price the sellers receive after the tax
The per-unit burden of the tax on sellers is - ANS-the difference between the price
below the equilibrium and at the equilibrium
burden of tax is dictated by - ANS-the relative elasticity of supply and demand
Rent control is an example of - ANS-price ceiling
consumer surplus - ANS-the difference between the highest price a consumer is willing
to pay for a good and the actual price the consumer pays
total surplus - ANS-the sum of consumer surplus and producer surplus
1/2*equilibrium quantity*( highest price-price floor)
Producer surplus - ANS-the amount a seller is paid for a good minus the seller's cost of
providing it
Economists typically measure efficiency using - ANS-total surplus
CPI (Consumer Price Index) - ANS-an index of the cost of all goods and services to a
typical consumer
A COLA automatically raises the wage when - ANS-the consumer price index
increases.
When income increases... - ANS-demand for inferior goods decrease and demand for
normal goods increase
price change causes a movement along - ANS-the demand curve (demand
increase=right demand decrease=left)
market quantity demand - ANS-sum of all individual demands
What would cause a supply curve to shift right? - ANS-increase in supply (example:
improvement in production technology)
a competitive market... - ANS-has many buyers and sellers, no single buyer or seller
can influence the price
when an input price decreases - ANS-supply for the good made increases
A movement downward and to the left along a supply curve is - ANS-a decrease in the
quantity supplied caused by a decrease in the price
an increase in the number of sellers causes - ANS-an increase in the market supply =
right shift
market quantity supplied - ANS-sum of all individual supplies
supply curve could shift - ANS-in response to a change in the expected future price
surplus - ANS-A situation in which quantity supplied is greater than quantity demanded
shortage - ANS-A situation in which quantity demanded is greater than quantity supplied
When demand increases and supply decreases, - ANS-equilibrium price rises
When demand decreases and supply increases, - ANS-equilibrium price falls
price ceiling - ANS-a maximum price that can be legally charged for a good or service
, price floor - ANS-a minimum price for a good or service
When supply is more elastic than demand - ANS-buyers bear most of the tax burden
When demand is more elastic than supply - ANS-sellers bear most of the burden of the
tax
a payroll tax has the effect of - ANS-increasing the wages paid by firms and decreasing
the wages received by workers.
A binding price ceiling - ANS-set below the market price (equilibrium)
The tax per unit is - ANS-the difference between the price the buyers pay after the tax
and the price the sellers receive after the tax
The per-unit burden of the tax on sellers is - ANS-the difference between the price
below the equilibrium and at the equilibrium
burden of tax is dictated by - ANS-the relative elasticity of supply and demand
Rent control is an example of - ANS-price ceiling
consumer surplus - ANS-the difference between the highest price a consumer is willing
to pay for a good and the actual price the consumer pays
total surplus - ANS-the sum of consumer surplus and producer surplus
1/2*equilibrium quantity*( highest price-price floor)
Producer surplus - ANS-the amount a seller is paid for a good minus the seller's cost of
providing it
Economists typically measure efficiency using - ANS-total surplus
CPI (Consumer Price Index) - ANS-an index of the cost of all goods and services to a
typical consumer
A COLA automatically raises the wage when - ANS-the consumer price index
increases.
