Which of the following are price mechanism functions?

Rationing, Signalling, Incentives

What is Elasticity of Supply

Way suppliers respond to change in price.

The incidence of a tax:

the share of the tax paid by the buyer or the seller

helps allocate scarce resources

difference between how much consumers are willing to pay and what they pay

What is consumer surplus?

Difference between price the consumer is willing to pay & actually does

What is Elasticity of Supply in the long run.

When supply is elastic over time.

The incidence of a tax

refers to those who bear the most burden of taxation

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1.2 How Markets Work - Economics Revision

21 termsStudBud Administration406 plays

Flashcards21 cardsFPractice quizPHost liveL

Questions 21

Answers

1
Which of the following are price mechanism functions?
Incentives, Rationing, Specialisation
Signalling, Rationing, Marketing
Rationing, Signalling, Incentives
Marketing, Advertising, Signalling
2
What is the equation for PED?
% Change D / % Change P
% Change D X % Change P
% Change P / % Change D
% Change D + % Change P
3
A good with YED that is positive but less than one is a
Inferior good
Normal good
non-essential good
Luxury good
4
When demand is inelastic, the consumer pays more of the tax compared to the producer?
True
False
5
A vertical supply curve indicates an elasticity of supply that equals
infinity
-1
1
0
6
When demand is elastic, the consumer pays less of the tax compared to the producer?
False
True
7
What is Elasticity of Supply
How suppliers make products.
A Market Supply Curve.
When suppliers make rubber bands.
Way suppliers respond to change in price.
8
The incidence of a tax:
the share of the tax paid by the buyer or the seller
measures the deadweight loss from the tax
measures the price elasticity of the tax
measures how much the government receives from the tax
9
The price mechanism
limits how much people can buy
helps allocate scarce resources
is used by government to balance demand and supply
helps ensure firms make profits
10
Consumer Surplus is:
The Price of the good
The profit of the consumer
difference between how much consumers are willing to pay and what they pay
11
A luxury good would have a higher YED than a normal good (yes or no)
yes
no
12
If XED is negative the good is?
A substitute
A complement
13
What is consumer surplus?
Difference between price the consumer is willing to pay & actually does
Difference between price the consumer is willing to charge & actually does
Difference between price the producer is willing to charge & actually does
Difference between price the producer is willing to pay & actually does
14
Markets fail when the price mechanism causes an inefficient allocation of resources within a society.
False
True
15
Calculate consumer surplus
$32 Mill
$1600
$64 Mill
16
What is Elasticity of Supply in the long run.
When the pizza guy takes a long time to get to your house.
When supply is inelastic over time.
When supply is elastic over time.
When a supplier produces more goods.
17
When demand is inelastic, the consumer pays less of the tax compared to the producer?
True
False
18
When demand is elastic, the consumer pays more of the tax compared to the producer?
False
True
19
What is consumer surplus with the subsidy?
A + B + C
A + B
A + B + C + F + G
A + B + C + F
20
A close substitute would have a XED of...?
0.5
-0.5
2.5
-2.5
21
The incidence of a tax
refers to those who bear the most burden of taxation
is a benefit
is a special tax on individuals with high income
is a tax paid by self-employed workers

1.2 How Markets Work - Economics Revision Flashcards | StudBud

1.2 How Markets Work - Economics Revision

21 termsStudBud Administration406 plays

1.2 How Markets Work - Economics Revision

Flashcards21 cardsFPractice quizPHost liveL

Questions 21

Answers

1
Which of the following are price mechanism functions?
Incentives, Rationing, Specialisation
Signalling, Rationing, Marketing
Rationing, Signalling, Incentives
Marketing, Advertising, Signalling
2
What is the equation for PED?
% Change D / % Change P
% Change D X % Change P
% Change P / % Change D
% Change D + % Change P
3
A good with YED that is positive but less than one is a
Inferior good
Normal good
non-essential good
Luxury good
4
When demand is inelastic, the consumer pays more of the tax compared to the producer?
True
False
5
A vertical supply curve indicates an elasticity of supply that equals
infinity
-1
1
0
6
When demand is elastic, the consumer pays less of the tax compared to the producer?
False
True
7
What is Elasticity of Supply
How suppliers make products.
A Market Supply Curve.
When suppliers make rubber bands.
Way suppliers respond to change in price.
8
The incidence of a tax:
the share of the tax paid by the buyer or the seller
measures the deadweight loss from the tax
measures the price elasticity of the tax
measures how much the government receives from the tax
9
The price mechanism
limits how much people can buy
helps allocate scarce resources
is used by government to balance demand and supply
helps ensure firms make profits
10
Consumer Surplus is:
The Price of the good
The profit of the consumer
difference between how much consumers are willing to pay and what they pay
11
A luxury good would have a higher YED than a normal good (yes or no)
yes
no
12
If XED is negative the good is?
A substitute
A complement
13
What is consumer surplus?
Difference between price the consumer is willing to pay & actually does
Difference between price the consumer is willing to charge & actually does
Difference between price the producer is willing to charge & actually does
Difference between price the producer is willing to pay & actually does
14
Markets fail when the price mechanism causes an inefficient allocation of resources within a society.
False
True
15
Calculate consumer surplus
$32 Mill
$1600
$64 Mill
16
What is Elasticity of Supply in the long run.
When the pizza guy takes a long time to get to your house.
When supply is inelastic over time.
When supply is elastic over time.
When a supplier produces more goods.
17
When demand is inelastic, the consumer pays less of the tax compared to the producer?
True
False
18
When demand is elastic, the consumer pays more of the tax compared to the producer?
False
True
19
What is consumer surplus with the subsidy?
A + B + C
A + B
A + B + C + F + G
A + B + C + F
20
A close substitute would have a XED of...?
0.5
-0.5
2.5
-2.5
21
The incidence of a tax
refers to those who bear the most burden of taxation
is a benefit
is a special tax on individuals with high income
is a tax paid by self-employed workers