FACC 300 Study Guide - Final Guide: Essential Products, Economic Equilibrium, Consumer Spending

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30 Nov 2017

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The price elasticity of essential products tends to be above unity. For given demand and supply schedules, the market equilibrium is always in a price interval in which demand is elastic because the total consumer expenditure in this price range decreases. What is going on at a price of 10: surplus of 50 units, shortage of 50 units, market equilibrium is reached, none of the above. How can you make the market equilibrium quantity increase while maintaining the market equilibrium price: increase the quantity demanded at all price levels, increase the quantity supplied at all price levels c) Increase both the quantity demanded and quantity supplied at all price levels: increase both the quantity demanded and quantity supplied at all price levels by an equal amount. The following five balance sheet accounts are considered sources of funds. Can be converted into cash with little or no loss in value. Generally earns a low interest rate a) b) c) d) e)

Related Questions

7) Indicate whether each of the following statements is true or false, and explain why.

A. Producer surplus tends to fall as the supply curve becomes more elastic.

B. Consumer surplus tends to rise as demand becomes more elastic.

C. The market demand curve indicates the minimum price buyers are willing to pay at each level of production.

D. The market supply curve indicates the minimum price required by sellers as a group to bring forth production.

E. Consumer surplus is the amount that consumers are willing to pay for a given good or service above and beyond the amount actually paid.

bronzeoyster264

A recent study determined the following elasticities for Volkswagen Beetles:

Price elasticity of demand = 2

Income elasticity of demand = 1.5

The supply of Beetles is elastic. Based on this information, are the following statements true or false? Explain your reasoning.

a. A 10% increase in the price of a Beetle will reduce the quantity demanded by 20%.

b. An increase in consumer income will increase the price and quantity of Beetles sold. Since the price elasticity of demand is greater than 1, total revenue will go down.

plumsardine837

Determine whether the following statements are true, false or uncertain. Give reasons for your answer.

i. The minimum wage is an example of a price ceiling.

ii. If demand decreases and supply increases, the equilibrium price will fall and the quantity will rise.

iii. If demand increases and supply increases, the equilibrium price will rise and the quantity will rise.

iv. Price ceilings generally help consumers by allowing them to purchase the amount they want at a low price.

v. Prices below the equilibrium level result in surplus, while prices above equilibrium result in a surplus.

vi. If demand is perfectly inelastic, then the own price elasticity of demand is infinite in absolute value.

vii. The elasticity of demand is constant along a linear demand curve.

viii. The demand for beverages is more elastic than the demand for orange juice.

ix. If a firm decreases the price of its product, its total revenue will fall.

x. When the price of gum was âlowâ, consumers in the US spent a total of $2 billion annually on gum consumption. When the price doubled, consumer expenditures actually increased to $3 billion annually. This indicates that the demand for gum is upward sloping.

blackbuffalo633

FACC 300 Study Guide - Final Guide: Essential Products, Economic Equilibrium, Consumer Spending

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