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Lecture 2

ECO349H5 Lecture 2: 1st class part 2

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Department
Economics
Course
ECO349H5
Professor
Michael H O
Semester
Spring

Description
Dx=80 - 5Px -20Py + 8Pz X and Y is sub/com in consumption/production X and Z is sub/com consumption/production Q: Sa=3Pa-3Pb a and b is sub/com Price falls and quantity falls, this might mean sellers/buyers expect the price is falling/rising tomorrow? Q: Price falls and quantity rises, this might mean that sellers/buyers expect the price is falling/rising tomorrow? Q: When sellers and buyers expect tmrw’s price will be higher, price will_____ today, quantity will ____ today? If the law of demand applies to apple, because the price of apple increase, the quantity demand of apple _____? Q: If the Law of supply applies to coffee, because of the price of coffee decrease, the quantity supply of coffee will ____? Decrease in the price of X leads to decrease in the demand of Y, X and Y is sub/com in consumption/production? Price fall and quantities rise, this might be caused by an increase in the price of sub/com in consumption/production? Increase in the price of X will lead to price and quantity of Y to increase, X and Y is _____ Demand curve for X is D=12-2P, demand curve for B is D=18-3P. Which one is more elastic? Q: Supply curve for X is S=12+3P, supply curve for B is S=15+2P Which one is more inelastic? Income increases from $10,000 to $30,000, quantity of demand increases from 40 to 60, income elasticity = _____? Price increase from $1 to $1.1, quantity demand decreases from 10 to 9, elasticity of demand is? Per-unit tax is most favorable to buyers when supply is ____ and demand is _______ Q: per unit subsidy is least favorable to buyers when supply is ___ and demand is _____ Multiple choice questions 1. If a decrease in the price of Good X leads to a decrease in the demand for good Y, A. Then X and Y are complements in production B. Then X and Y are substitutes in production C. Then X and Y are complements in consumption D. Then X and Y are substitutes in consumption 2. The price of silver is falling and the quantity bought and sold is increasing, one explanation is A. Sellers expect a higher price B. Seller expect a lower price C. Buyers expect a lower price D. Buyers expect a higher price 3. An increase in the price and quantity of bicycles could be caused by any of the following except A. An increase in the price of wheelbarrows, a substitute in production B. An increase in the price of bus fares, a substitutes in consumption C. A decrease in the price of bicycle helmets, a complement in consumptin D. And increase in consumer incomes 4. If a minimum wage is introduced under the equilibrium wage A. Employment will be increased B. The demand curve will shift right C. Some people will lose their jobs D. Nothing will occur 5. Increase to the minimum wage will be most beneficial to workers when A. Supply is inelastic B. Supply is elastic C. Demand is inelastic D. Demand is elastic 6. Increase in the minimum wage will always A. Decrease employer surplus B. Decrease worker surplus C. Increase worker surplus D. Increase employer surplus 7. Increase in price ceiling will be good for consumers when A. Demand is inelastic B. Demand is elastic C. Supply is elastic D. Supply is inelastic 8. Decreases in a price ceiling will be good for consumers when A. Demand is inelastic B. Demand is elastic C. Supply is elastic D. Su
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