MGEA02H3 Lecture Notes - Lecture 2: Demand Curve

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lavenderdonkey6

1 Dec 2010

School

UTSC

Department

Economics for Management Studies

Course

MGEA02H3

Professor

Gordon Cleveland

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MGEA02H3 Full Course Notes

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Week 2: demand and supply in a competitive market. Our first midterm test will be written on saturday, october 17th at 5 pm (2 hour period with 90 minutes test) (less than 4 weeks away) Tentative date for next midterm at friday november 20th (3 to 5 pm) More parts of course handbook are up on the utsc intranet. Tutorials start this week schedule is on website, under ecma04/professor and tas. Office hours for help from t. a. s in mw-369 are also up on website in same place (if you need help go get it tas are paid to help you!) N maximizing a value (or utility) function along ppf calculating opportunity cost on ppf. N shifts in demand and supply: how they affect equilibrium. And our 6 new t. a. "s have office hours! Leslie, juan, lisa, zuoyi, sam and shoeb (check www. utsc. utoronto. ca/~cleveland for the time of office hours in mw-369 and the time and location of tutorials.

Related Questions

True or False:

1. Consumer surplus is the buyer's willingness-to-pay minus the seller's opportunity cost of production.

2. If your willingness-to-pay for a hamburger is $3 and you paid $2, then your consumer surplus is $5.00

3. The opportunity cost of production for a seller includes the implicit cost of the seller's time.

4. The height of the supply curve at a selected quantity is the seller's opportunity cost of producing that marginal unit.

5. Total surplus (total well-being) is the seller's cost of production minus the buyer's willingness-to-pay.

6. The competitive market equilibrium outcome is efficient because it allocates the produced output to the buyers who place the highest value on the good

7. Producer surplus is the area above the supply curve and below the price.

8. The competitive market equilibrium outcome maximizes total surplus (total well-being)

9. Producing and consuming more of a good will always increase the total surplus(total well-being).

redelephant805

Demand is elastic when the elasticity ofdemandis:
Select correct option:
Greater than 0
Greater than 1
Less than 1
Less than 0

The law of diminishing returns assumes:
Select correct option:
There are no fixed factors of production.
There are no variable factors of production.
Utility is maximised when marginal product falls.
Some factors of production are fixed.

The law of diminishing marginal utility states:
Select correct option:
The supply curve slopes upward.
Your utility grows at a slower and slower rate as you consumemoreand more units of a good.
The elasticity of demand is infinite.
None of the given options.

If there is a price ceiling, there will be:
Select correct option:
Shortages
Surpluses
Equilibrium
None of the given options.

A "Giffen good" is defined as one for which:
Select correct option:
Marginal utility is zero.
The demand curve is perfectly elastic.
The substitution effect is positive.
The demand curve is positively sloped.

The concave shape of the production possibilitiescurveillustrates:
Select correct option:
Increasing opportunity costs for both goods
Increasing opportunity cost for good X but not for good Y
Increasing opportunity cost for good Y but not for good X
Constant opportunity costs for both goods

Although there are many reasons why a market can benon-competitive,the principal economic difference between acompetitive and anon-competitive market is:
Select correct option:
The number of firms in the market.
The extent to which any firm can influence the price oftheproduct.
The size of the firms in the market.
The annual sales made by the largest firms in the market.

If marginal product is equal to average product:
Select correct option:
The total product will fall
The average product will not change
Average variable costs will fall
Total revenue will fall

The price elasticity of supply shows us:
Select correct option:
How steep the supply curve is
How fast supply responds to price
How much supply shifts when income changes
How much quantity supplied responds to price changes

Moving from left to right, the typical productionpossibilitiescurve:
Select correct option:
Has a constant negative slope
Has a constant positive slope
Illustrates increasing opportunity costs
Illustrates decreasing opportunity costs

fuchsiawoodchuck283

How will each of the following changes in demand and/or supply affect equilibrium price and equilibrium quantity in a competitive market; that is, do price and quantity rise, fall, or remain unchanged, or the answers indeterminate because they depend on the magnitudes of the shifts? Use supply and demand to verify the answers.

A. Supply decreases and demand is constant.

B. Demand decreases and supply is constant.

C. Supply increases and demand is constant.

D. Demand increases and supply increases.

ivoryllama613

MGEA02H3 Lecture Notes - Lecture 2: Demand Curve

MGEA02H3 Full Course Notes

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