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FARE 1040 Study Guide - Final Guide: Government Failure, Public Choice, Jim Crow Laws

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School
University of Guelph
Department
Food, Agricultural and Resource Economics
Course
FARE 1040
Professor
Fox Glenn C.

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Document Summary

Arbitrage - simultaneous purchase and sale of an asset in order to profit from a difference in the price. Exploits different prices for same commodity or security in different markets or institutions. Change in quantity demanded - movement along demand curve. Change in quantity supplied - movement along supply curve. Comparative advantage - ability to produce a product or service at a lower opportunity cost than a competitor. Consumers surplus - difference between what consumers are willing and able to pay for a good/service and the total amount they actually do pay example. Demand function - (curve?, if it"s the same thing) an illustration of the inverse relationship between the price of a good and the quantity demanded, holding other variables constant. Within a given demand curve, a change in the price of good x leads only to a change in the quantity demanded of good x.

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Related Questions

: Do the following cause a change in demand (shift in demand curve), change in supply (shift in supply curve), change in quantity demanded (movement along demand curve) or change in quantity supplied (movement along supply curve)?

1) The market for Aquafina water. The price of Dasani increases.

2) The market for ground beef. The price of cow-feed increases

. 3) The market for hamburger patties. The price of hamburger buns decreases.

4) The market for pistols. Republicans fear that a democratic president will initiate new gun control laws making it more difficult to purchase guns.

The market demand curve

a. slopes upward.

b. is found by vertically adding the individual demand curves.

c. represents the sum of the quantities demanded by all the buyers at each price of the good.

d. represents the sum of the prices that all the buyers are willing to pay for a given quantity of the good.

When we move along a given demand curve,

a.

all nonprice determinants of demand are held constant.
b.

only price is held constant.
c.

all determinants of quantity demanded are held constant.

d. income and price are held constant.

When the price of a good or service changes,

a.

there is a movement along a given demand curve.
b.

the demand curve shifts in the opposite direction.
c.

the supply curve shifts in the opposite direction.
d.

the demand curve shifts in the same direction.

6. The primary difference between a change in supply and a change in the quantity supplied is that: A) a change in quantity supplied is a movement along the supply curve, while a change in supply is a shift in the supply curve. B) both a change in quantity supplied and a change in supply are movements along the supply curve, only in different directions. C) a change in supply is related to the supply curve, while a change in quantity supplied is related to shifts in the demand curve that elicit a change in supply. D) a change in supply is a movement along the supply curve, while a change in quantity supplied is a shift in the supply curve.