ECON 1001 Lecture 3: Micro economics notes24

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rubyllama377

27 Mar 2018

School

Department

Economics

Course

ECON 1001

Professor

Erhardt

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Document Summary

It is the measure of change in supply of a commodity due to change in its price. It is a measurement of the percentage change in quantity supplied of a commodity in response to some percentage change in its price. The five degrees of elasticity of supply the five degrees of elasticity of supply are: elasticity of supply is equal to 1. When a straight line, positively sloped supply curve starts from the point of origin o. Qty supplied: elasticity of supply is greater than 1. When straight line positively sloped supply curve starts from y axis. Qty supplied: elasticity of supply is less than one. When a straight line positively sloped supply curve starts from x axis. It is perfectly inelastic supply where e s = 0: perfect inelastic supply curve. It refers to a vertical straight line supply curve showing constant supply no matter what the price is.

Related Questions

. When the percentage change in quantity demanded is larger thanthe percentage change in price, demand is said to be:
A) price inelastic.
B) unit price elastic.
C) price elastic.
D) perfectly inelastic.

38. If the price elasticity of demand is found to be -3/4, thendemand is:
A) price inelastic.
B) price elastic.
C) unit price elastic.
D) positively sloped.

39. If the price elasticity of demand is found to be -6, thendemand is:
A) price inelastic.
B) price elastic.
C) unit price elastic.
D) horizontal.

40. If the price of a good is increased by 15 percent and thequantity demanded falls by 20 percent, the price elasticity ofdemand is:
A) price elastic.
B) price inelastic.
C) unit price elastic.
D) normal.

41. If the absolute value of price elasticity is greater than 1,this means the demand curve in that region is:
A) price elastic.
B) price inelastic.
C) unit price elastic.
D) upward sloping

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47. When a public transit system (such as a subway or bus line)raises its fares, it may experience an increase in total revenue.This suggests that demand is:
A) unstable.
B) price inelastic.
C) price elastic.
D) unit price elastic.
45. If the quantity demanded of agricultural output is veryunresponsive to a fall in price, the demand for agricultural outputis:
A) price elastic.
B) price inelastic.
C) positively sloped.
D) horizontal.
48. A constant price elasticity of demand curve is one whose:
A) slope is the same at every point on the curve.
B) price elasticity of demand is the same at every point on thecurve.
C) quantity is the same at every point on the curve.
D) price elasticity of demand and slope are the same at every pointon the curve.

49. Whenever supply increases, the resulting market price willalways be lower except:
A) when demand is perfectly price elastic (when the demand curve ishorizontal).
B) when demand is completely price inelastic (when the demand curveis vertical).
C) when supply is perfectly price inelastic (when the supply curveis vertical).
D) in the case of demand having unit price elasticitythroughout.

50. A demand curve that is perfectly inelastic:
A) will be vertical.
B) will be horizontal.
C) will be upward sloping.
D) has an elasticity equal to 1 everywhere on the curve.

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1. In economics, the demand for a good refers to the amount of the good that people:
a. Will buy at alternative income levels
b. Need to achieve a minimum standard of living.
c. Will buy at various prices
d. Would like to have if the good were free
2. The term ceteris paribus means that:
a. What is for the individual is not necessarily true for the whole
b. All variables except those specified are constant
c. Everything is variable
d. No one knows which variables will change and which will remain constant.
3. When economist talk about supply, they are referring to a relationship between price received for each unit sold and the ____________________.
a. Quantity supplied
b. Demand schedule
c. Demand curve
d. Market price
4. But nearly all supply curves share a basic similarity: they slop______________.
a. Up from left to right
b. Down from left to right
c. Up from right to left
d. Down from right to left
5. The nature of demand indicates that as the price of a good increases:
a. Suppliers wish to sell less of it.
b. Buyers desire to purchase less of it
c. More of it is desired
d. More of it is produced
6. Any given demand or supply curve is based on the certeris paribus assumption that _______.
a. Everything is variable
b. All else is held equal
c. No one knows which variables will change and which will remain constant
d. What is true for the individual is not necessary true for the whole.
7. Economist refer to the relationship that a higher price leads to lower quantity demand as the ______________.
a. Price model
b. Law of demand
c. Market equilibrium
d. Income gap
8. A perfect elastic supply curve is:
a. Vertical
b. Downward sloping to the left
c. Horizontal
d. Upward sloping to the right
9. A 10 percent increase in the price of soda leads to a 20 percent increase in the quantity of iced tea demanded. It appears that:
a. Elasticity of demand for iced tea is 2 and is elastic
b. Cross-price elasticity of demand for iced tea is -2
c. Cross-price elasticity of demand for soda is -0.5
d. Elasticity of demand for soda 0.5 AND IS INELASTIC
10. ___________ is the change in what is on the horizontal axis (quantity) divided by the change in what is the vertical axis (price).
a. Elasticity
b. Supply
c. Demand
d. Revenue
11. A severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:
a. The supply curve and the rightward shift of the demand curve resulting in a higher equilibrium price
b. Both the supply and demand curves
c. The supply curve
d. The demand curve, as consumers try to economize because the shortage.
12. Got the answer.
13. A drought decreases the supply of agricultural products, which means that at any given price a lower quantity will be supplied; conversely, especially good weather would shift the _____________.
a. Demand curve to the right
b. Supply curve to the left
c. Supply curve to the right
d. Demand curve to the left
14. Interpret the following statements:

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ECON 1001 Lecture 3: Micro economics notes24

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