What do price floors do to the market?

Set minimum price and this causes a surplus

What is deadweight loss?

Loss in economic efficiency when equilibrium is not achieved

What is absolute advantage?

One person can produce both goods more efficiently

What is consumer surplus?

Area below the demand curve/above price line

What is Marginal Utility?

The benefit gained from consuming one additional unit

What is comparative advantage?

A person is more efficient at producing one good

What is opportunity cost?

What you give up to make another choice

studbud

Test 1 Mircoeconomics KSU

19 termsStudBud Administration53 plays

Microeconomics- MU, CA, AA, supply and demand shifts, etc

Flashcards19 cardsFPractice quizPHost liveL

Questions 19

Answers

1
Which one is a shifter for demand?
Change in Price
Both a & b
Change in prices of substitute goods
Change in preferences
2
True or False? A change in price shifts the entire demand curve.
True
False
3
If the price of peanut butter (substitute good) goes up what happens to the demand of Nutella?
Both a & b
Stays the same
Goes down
Goes Up
4
True or False? A decrease of supply curve would be a right shift.
False
True
5
What do price floors do to the market?
Sets the minimum price and causes a shortage
Sets the maximum price and causes a surplus
Sets that maximum price and causes a shortage
Set minimum price and this causes a surplus
6
What is deadweight loss?
A surplus in resources
When the market is at equilibrium/no access in the market
Loss in economic efficiency when equilibrium is not achieved
When the market is suffering from a misallocation of supply
7
What is absolute advantage?
One person can produce both goods more efficiently
One person can produce one good
One person can produce both goods awfully
One person is better at producing one good over another
8
What is an example of complementary goods?
Cereal and Milk
Almond Milk and Soy milk
Coke and Pepsi
Chairs and stools
9
What is consumer surplus?
Area below the demand curve/ below price line
Area below the supply curve/below price line
Area below the demand curve/above price line
Area below the supply curve/above price line
10
Which point on the indifference curve is optimal?
D
B
A
C
11
True or False? If demand increase it shifts to the right.
True
False
12
What is Marginal Utility?
The benefit of producing one additional unit
The benefit gained from consuming every single option
The benefit of producing a good
The benefit gained from consuming one additional unit
13
What is the equation for calculating the Marginal Utility?
MU/P=MU/P
MU=P
MUx/Px=MUy/Py
MUx/Py=Muy/Px
14
If the price is below the equilibrium, what will occur?
Surplus
Shortage
Nash Equilibrium
Quantity
15
What is comparative advantage?
A person is more efficient at producing one good
A person that can produce less of one good
The opportunity ost of produce one good over another
A person able to produce all goods
16
True or false? Price Ceilings are above the equilibrium price.
True
False
17
What is an example of two substitute goods?
Ice cream and hot fudge
Popcorn and butter
Green apples and caramel
Peanut Butter and Nutella
18
If the price of Milk (complement good) goes down what happens to the demand of Cereal?
Goes Down
Affects quantity supplied
Does not shift
Goes Up
19
What is opportunity cost?
Buying anything
What you give up to make another choice
Choosing between two goods
Finding out the cost based on benefit

Test 1 Mircoeconomics KSU Flashcards | StudBud