EC 201 Lecture Notes - Lecture 2: Normal Good, Luxury Goods, Dodge Intrepid

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olivepig992

25 Apr 2016

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*demand for labor (down) - since the price goes up. *demand for goods and services (up) - since income goes up. *demand for goods and services (down) - since number of buyers might go down. *supply for labor (up) - since more people might want to work if the wage is high. *net effect hard to tell, still a lot of active research on these things. Perfect inelasticity: no matter how much people are willing to pay, a limited quantity exists ex- picasso painting. *people will buy as much of the good as you can sell them, but only for a very specific price. *corn grown is nebraska, participates in the global corn market. *can go to commodities market and sell as much as they can grow at going price. * when e^d < 1 we say demand is inelastic. * when e^d > 1 we say demand is elastic.

Related Questions

14. The demand curve for a typical good has A. a negative slope because some consumers switch to other goods as the price of the good rises. B. a negative slope because the supply of the good rises as demand rises. C. a negative slope because the good has less "snob appeal" as its price falls. D. an inverse slope because as the price goes up, the good has more profitability. E. a positive slope because the price is a clear indicator of need.

25. The demand for computers has risen dramatically at the same time that the unit cost of production has decreased. As a result, we can expect A. a decrease in price and no predictable impact on output. B. a definite decrease in price and increase in output. C. an increase in output with no predictable change in price. D. no predictable changes in either price or output.

39. The local symphony recently raised its price for tickets to their summer concerts in the park. At the end of the summer season, the symphony was surprised to see that total revenue had actually decreased. The reason was that the elasticity of demand for tickets was

		A. unit elastic.
		B. inelastic.
		C. elastic.
		D. Not enough information is given.

turquoisefish830

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: