Econ Unit 2

40 terms by emfeds

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Which of the following would NOT shift the demand curve for beef?

a) a widely publicized study that indicated beef increases one's cholesterol
b) a reduction in the price of cattle feed
c) an effective advertising campaign by pork producers
d) a change in the incomes of beef consumers


In 2003 the price of oil increased, which in turn caused the price of natural gas to rise. This can be be explained that oil and natural gas are...

a) complementary good and the higher price for oil increased the demand for natural gas
b) substitute goods and the higher price for oil increased the demand for natural gas
c)complementary goods and the higher price for oil decreased the supply of natural gas
d) substitute goods and the higher price for oil decreased the supply of natural gas


A shift to the right in a demand curve for product A can be most reasonably explained by saying that..

a) consumer incomes have declined and they now want to buy less of A at each possible price
b) the price of A increased and as a result consumers want to purchase less of it
c)consumer preferences have changed in favor of A so that they now want to buy more at each possible price
d) the price of A has declined and as a result consumers want to purchase more of it


the equilibrium price is when

the number of x demanded and the number of x supplied is equal

if a market is competitive it will move toward the _________


an increase in an automobile workers wages would move the supply curve to the


rent control...

serves as an example of a price ceiling

if the minimum wage exceeds the equilibrium wage then

the quantity supplied of labor will exceed the quantity demanded

in a competitive market free of government regulation

price adjusts until quantity demanded equals quantity supplied

to find the amount of tax imposed

find the difference between the supply curves

the price elasticity of demand coefficient measures

buyer responsiveness to price changes

if the price of hand calculators falls from $10 to $9 and as a result the quantity demand increases from 100 to 125 then

demand is elastic

if a firm can sell 3000 units of product A at $10 per unit and 5000 at $8 then

the price elasticity of demand is 2.25

income elasticity of demand measures how sensitive purchases of a specific product are to changes in


the cross elasticity between pepsi and coke is

positive, indicating substitute goods

a manufacturer of frozen pizza found that total revenue decreases when price was lowered from $5 to $4. it was also found that the total; revenue decreased when the price was raised from $5 to $6. Thus,

the demand for pizza is elastic above $5 and inelastic below $5

rutgers university raises tuition for the purpose of increasing its revenue so that more faculty can be hired. rutgers is assuming that the demand for education at RU is

relatively inelastic

if demand for product x is inelastic, a 4 percent increase in the price of X

will decrease the quantity of X demanded by less than 4 percent

price increases

quantity demanded decreases

demand increases the demand curve

shifts right

demand decreases the demand curve

shifts left

increase in supply the supply curve

right shift

decrease in supply the curve

left shift

inferior goods

demand increases as incomes decrease

substitute goods

one can be substituted for another

complementary goods

if the price of one goes up and its demand decreases, so will the demand of the other one

the more substitutes of a product the more

elastic it is

inelastic goods

price goes up but there is not a big change in people who will buy it
ex. tobacco

unit elastic

equal change in price and demand

elasticity equation

P change in Q
Q change in P

answer to PED is 0

perfectly inelastic

answer to PED is 0-1


answer to PED is 1


answer to PED is 1 to infinity


answer to PED is infinity

perfect elastic

price floor

legal minimun on the price at which a good can be sold

price ceiling

legal maximum on the price at which a good can be sold

when the price ceiling is above the equilibrium point it

doest affect the market

misallocation of recourses is

anything inefficient

who pays for a tax?

producers and consumers

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