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Section 2 Review 19/20 Flashcards | StudBud
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Section 2 Review 19/20
Section 2 Review 19/20
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22 cards
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Questions
22
Answers
1
If both supply and demand increase, we know that ____ increases but the change in ____ is ambiguous
equilibrium quantity, nothing
equilibrium quantity, equilibrium price
nothing, equilibrium quantity
equilibrium price, equilibrium quantity
2
An increase in demand ____ equilibrium price and ___ equilibrium quantity
decreases, increases
increases, decreases
increases, increases
decreases, decreases
3
Equilibrium price is
a price at which an unlimited quantity is sold
a price at which quantity demanded is less than quantity supplied
the price at which at quantity demanded equals quantity supplied
a price at which quantity demanded is greater than quantity supplied
4
Total surplus is maximized when a market is in equilibrium
True
False
5
Deadweight loss
the value of missed opportunities
is a result of an effective/binding price or quantity control
Equal to value of lost total surplus when a market can't reach equilibrium
is the value of forgone mutually beneficial transactions
6
A change in demand is a_____ of the demand curve and a change in quantity demanded is a _______ _______ the demand curve
shift, movement along
movement along, movement along
movement along, shift
shift, shift
7
In the figure below, the area of total surplus is area
AB
D
AD
BC
8
Ceteris paribus, as price decreases,
Consumer surplus increases
Producer surplus decreases
Producer surplus increases
Consumer surplus decreases
9
A Quota established at Q2 would result in
Producer surplus F
Deadweight loss CD
Consumer surplus A
a quantity of QE goods sold in this market
10
An effective price floor could be established at
P1
PE
P2
None of these option
11
According to the law of supply
When price increases, supply decreases
When price increases, supply increases
When price increases, quantity supplied decreases
When price increases, quantity supplied increases
12
An inferior good is
a good for which demand decreases as income increases
a good for which demand does not change as income changes
a good for which demand increases as income increases
worse than other goods
13
The cost of obtaining a license in a market with an effective quota in place is
Equilibrium price
equal to the price buyers pay minus the price sellers receive
the quota rent
equal to the price sellers receive minus the price buyers pay
14
In the figure below, the area of producer surplus is area
B
C
A
D
15
A shift of the supply curve is caused by a change in
determinant of demand (TRIBE)
price
determinant of supply (TINTER)
determinant of supply (TRIBE)
16
a ___ results when price is greater than equilibrium price and a ___ results when price is less than equilibrium price
surplus, shortage
shortage, surplus
cleared market, shortage
shortage, cleared market
17
If a price ceiling were established at P1, the quantity of goods bought and sold in this market would be
Q1
0
Q2
QE
18
In the figure below, the area of consumer surplus is area
A
C
B
D
19
A Quota established at Q1 would result in
Producer surplus F
Government revenue BE
Deadweight loss CD
Consumer surplus A
20
According to the law of demand
When price increases, demand increases
When price increases, demand decreases
When price increases, quantity demanded increases
When price increases, quantity demanded decreases
21
If a price ceiling were established at P2, the quantity of goods bought and sold in this market would be
Q1
Q2
0
QE
22
An increase in supply ____ equilibrium price and ___ equilibrium quantity
increases, increases
increases, decreases
decreases, increases
decreases, decreases
