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Terms in this set (38)
Since economic science can contribute theoretical and factual knowledge on a particular issue, the final decisions on policy should be made by economics, not but he citizenry through its elected officials.
The achievement of greater efficiency in the United States has been at the expense of growing inequality.
Any point on, or inside, the production possibilities frontier is unattainable because it entails larger outputs than available resources permit.
Changes in consumer preferences toward sport utility vehicles have shifted their demand curves downward and to the left.
Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.
Price floors lead to market surpluses.
Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.
A shortage occurs when price is higher than the market equilibrium quantity.
Since rent control have been in effect in New York City, apartments have been more plentiful.
The more of a good a consumer has, the less marginal utility an additional unit contributes to overall satisfaction.
An optimal purchase is one that maximizes total net utility.
Consumers should purchase a good up tot the pint where MU=P.
If the marginal net utility of beer is negative number, the consumer should buy one more beer in order to maximize utility.
The law of diminishing marginal utility is consistent with the consumer behavior that produces a negatively sloped demand curve.
Consumer surplus is the difference between the worth of a commodity to the consumer and the price the consumer pays for the commodity.
A market demand curve for a particular commodity is a summation of individual consumers' income will always increase the demand for a good.
An increase in a consumer's income will always increase the demand for a good.
Elasticity of demand equals the ratio of the percentage change in the price of a good to the percentage change in the quantity demanded.
The price elasticity of demand measure is generally stated as an absolute value.
The elasticity of a straight-line demand curve remains constant throughout its length.
Total expenditure equals price times elasticity.
If demand is elastic, a rise in price will decrease total expenditure.
If price up 20 percent and quantity demanded declines by 10 percent, total revenue will rise.
A fall in price will always result in an increase in the total amount consumers spend on a product.
A consumer will consume the combination of goods at the point of tangency between the budget line and the indifference curve.
Any point on the lowest indifference curve is preferable to a point on a higher indifference curve.
Demand curve becomes flatter
If consumers become more sensitive to changes in price of a good, the good's:
Demand is inelastic
If the price of gasoline uses by 20 percent and the consumption of gasoline falls by 5 percent:
The sale of 125 percent more radios than before
If the price elasticity of demand for radios is 2.5, than a 50 percent reduction in the price of radios will lead to:
Responsiveness of quantity headed to a change in price and change in revenue as price changes
Elasticity provides a guide to both:
Tourist and convention demand is very elastic, so hotel booking swill decline
To avoid an increase in the local property tax:
Non manufacturing firms have relatively inelastic demand for the NYC locations
A study of New York City (NYC tax rates conducted that taxes on non manufacturing sector:
In the above figure, the consumer is indifferent between the combinations of beer and wine coolers indicated by:
Price of beer decreased
In the above figure, budget line B compared to A clearly show that the:
Suppliers will find inventories being depleted. They will increase production and raise price.
If the price of a good is below the equilibrium price,
The diversion of income toward black-market suppliers
The imposition of price ceilings on a market often results in:
No, but if there is no interference, they tend to move toward equilibrium.
Are markets always in equilibrium?
Marginal utility is zero.
Total utility will be at its maximum when:
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