Price ceilings Select one: a. may decrease consumer surplus if demand is sufficiently inelastic. b. may decrease consumer surplus if demand is sufficiently elastic. C. cause quantity to be higher than in the market equilibrium. d. always decrease consumer surplus. e. always increase consumer surplus.
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Lesson 10 Question 7
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- SOLCE FOR D-E ONLYThe Demand curve for a good A is P = - 2Q+200 and the Supply curve is P=Q+10.A. Find the equilibrium Price and Quantity B. What is the level of total expenditure in this market?C. What is the price elasticity of demand at equilibrium? D. If there is a law that prevents you from consuming this good, how much should you be compensated by the government to accept it given the Consumer Surplus (CS)? Calculate.Demand shifts to P = - 2Q+260 due to an increase in the price of another good B from $20 to $25 E. Find the New Equilibrium, and Calculate the new Consumer Surplus and the Cross Price Elasticity of Demand. What type of goods are these?Demand for the desired quantity of a good that is backed by the ability to buy that good is known as: A. Effective Demand B. Derived DemandIdentify what happens to equilibrium price and quantity ineach of the following cases:a. Demand rises and supply is constant.b. Demand falls and supply is constant.c. Supply rises and demand is constant.d. Supply falls and demand is constant.e. Demand rises by the same amount that supply falls.f. Demand falls by the same amount that supply rises. g. Demand falls less than supply rises.h. Demand rises more than supply rises.i. Demand rises less than supply rises.j. Demand falls more than supply falls.k. Demand falls less than supply falls.
- A. Assume a market of a specific good. The demand and supply equation is as shown below: Pp = 70 – 3Qp Ps = 5+ 20s Assume that there is an advancement in technology that causes the input cost of the good to decrease. Thi cause the supply curve to shift rightwards by 2 units. 1. Find the new equilibrium price 2. Find the new equilibrium quantity 3. Find the new demand price elasticities at the equilibrium 4. Find the new supply price elasticities at the equilibrium 5. Find the new Consumer Surplus 6. Find the new Producer SurplusPrice elasticity of demand is calculated as: the percentage change in quantity demanded divided by the percentage change in price. the percentage change in price divided by the percentage change in quantity demanded. a. b. the responsiveness of equilibrium price to a shift in the demand curve. the responsiveness of equilibrium price to a shift in the supply curve. с. d.A change in the price of a product will cause: Select one: a. a shift in the supply curve b. a change in quantity supplied c. a change in demand for a product d. a change in consumer preferences Which of the following products is most likely to have an elastic demand? Select one: a. cigarettes b. toothpicks c. automobiles d. insulin Refer to the below information. Equilibrium price will be Select one: a. $2 b. $1 c. $4 d. $3
- The elasticity of supply measures the sensitivity of a. price to changes in supply. b. quantity supplied to quantity demanded. c. supply to changes in costs. d. quantity supplied to a change in price.6. Demand and supply for a product are given as Q = 100 - 2P, Q = 10 + P, respectively. a. Graph demand and supply on the same coordinate system. b. Find the equilibrium price and quantity. c. What is the surplus quantity when P = $35? d. What is the shortage quantity when P =$20? e. Find the price elasticity at the equilibrium point?Indicate the effect (increase, decrease or indeterminate) on the equilibrium price and quantity of each of these changes in demand and/or supply. A. Increase in demand, increase in supply 1. 2. B. Increase in demand, decrease in supply 3. 4. C. Decrease in demand, decrease in supply 5. 6.
- 1. The price elasticity of demand for bread A. is computed as the percentage change in quantity demanded of bread divided by the percentage change in price of bread. B. will be higher if there is a new product that is a close substitute for bread. C. will be higher if consumers consider bread to be a necessity. D. All of the above are correct. E. A and B, onlySuppose the demand of a product decreases. What will be the effect on the market equilibrium price and quantity if supply is perfectly inelastic? If supply is perfectly inelastic, then A. the equilibrium price will decrease and the equilibrium quantity will decrease. B. the equilibrium price will decrease and the equilibrium quantity will not change. C. the equilibrium price will not change and the equilibrium quantity will not change. D. the equilibrium price will increase and the equilibrium quantity will increase.A price fixed below the equilibrium price of a product will cause a shortage of that product. A.True B.False